Issue
Where an entity did not claim a fuel tax credit entitlement in an earlier activity statement, can the entity choose between revising its earlier activity statement under subsection 65-5(1) of the Fuel Tax Act 2006 (FTA), or including the fuel tax credit in a subsequent activity statement under subsection 65-5(4) of the FTA?
Decision
Yes, the entity has a choice. It can either revise its earlier activity statement to include the fuel tax credit, or include the fuel tax credit in a subsequent activity statement.
Facts
The entity is registered for goods and services tax (GST).
The entity acquired fuel in a tax period.
The entity had an entitlement to an input tax credit for the purposes of GST in relation to the acquisition of the fuel.
The input tax credit was attributable to the same tax period.
The entity is entitled to a fuel tax credit in respect of the acquisition.
The entity realises in a subsequent tax period that it has not claimed the fuel tax credit.
Reasons for Decision
Pursuant to section 41-5 of the FTA, an entity is entitled to a fuel tax credit if it acquires, manufactures, or imports taxable fuel for use in carrying on its enterprise.
Division 65 of the FTA sets out the attribution rules for fuel tax credits and fuel tax adjustments.
Subsection 65-5(1) of the FTA provides that a fuel tax credit is attributable to the same tax period to which the input tax credit for the fuel is attributable under the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).
The entity's input tax credit was attributable to an earlier tax period, and therefore their fuel tax credit is also attributable to the earlier tax period.
However, subsection 65-5(4) of the FTA provides for the later attribution of a fuel tax credit in certain circumstances and states:
If your return for a *tax period or *fuel tax return period does not take into account a fuel tax credit that is attributable to the period mentioned in subsection (1), (2) or (3), then the credit: (a) ceases to be attributable to that period; and (b) becomes attributable to the first period for which you give the Commissioner a return that does take it into account.
The effect of this subsection is that, if an entity does not claim their fuel tax credit in an activity statement for the tax period to which the fuel tax credit is originally attributable and chooses to claim the fuel tax credit in an activity statement for a subsequent tax period, the fuel tax credit ceases to be attributable to the earlier tax period and instead becomes attributable to the tax period in which the entity ultimately lodges an activity statement that includes the fuel tax credit. Therefore, an entity can choose to include a fuel tax credit in a subsequent activity statement in which case the fuel tax credit will become attributable to that tax period.
However, subsection 65-5(4) of the FTA does not prevent an entity from revising an earlier activity statement to include the fuel tax credit. In that case, the fuel tax credit will have been taken into account for the tax period by virtue of the revised activity statement so it does not cease to be attributable to that period.
Accordingly, where an entity has omitted to claim a fuel tax credit, they can choose to either: • revise their activity statement for the tax period in which the fuel was originally attributable under subsection 65-5(1) of the FTA, or • include the fuel tax credit in an activity statement for a subsequent tax period under subsection 65-5(4) of the FTA.
Note: claims for fuel tax credits are subject to time limits set out in section 47-5 of the FTA and section 155-35 of Schedule 1 to the Taxation Administration Act 1953 in relation to the period of review.