Fuel tax: vehicle's travel on a public road that is incidental to the vehicle's main use and the road user charge

This Ruling explains when a vehicle's travel on a public road is 'incidental to the vehicle's main use' for the purposes of subsection 43-10(4) of the Fuel Tax Act 2006 (FT Act).

This Ruling also explains the road user charge, and the meaning of the terms 'vehicle', 'travel', 'for travelling', 'public road', 'main use' and 'incidental to' for the purposes of subsections 43-10(3) and (4) of the FT Act.

To the extent that you acquire, manufacture in, or import into, Australia taxable fuel for use in a vehicle travelling on a public road in carrying on your enterprise, you are entitled to a fuel tax credit under section 41-5 of the FT Act.

However, under subsection 43-10(3) of the FT Act, the amount of the fuel tax credit to which you are entitled is reduced by the road user charge. Subsection 43-10(3) of the FT Act provides: To the extent that you acquire, manufacture or import taxable fuel to use, in a vehicle, for travelling on a public road, the amount of your fuel tax credit for the fuel is reduced by the amount of the road user charge for the fuel. Note : Only certain motor vehicles whose gross vehicle mass is more than 4.5 tonnes are entitled to any credit (see sections 41-20 and 41-25).

Subsection 43-10(4) of the FT Act provides a carve-out from the application of the road user charge in the calculation of the amount of the fuel tax credit to which an entity is entitled. The subsection states: However, the amount is not reduced under subsection (3) if the vehicle's travel on a public road is incidental to the vehicle's main use.

Unless otherwise stated, all legislative references in this Ruling are to the FT Act.

In this Ruling, unless otherwise stated: • a reference to: • 'acquire' or 'acquired' in relation to taxable fuel should be read as including the manufacture in or importation into Australia of taxable fuel; • the 'carve-out' is a reference to the effect of subsection 43-10(4) in not requiring an entity to reduce the amount of a fuel tax credit by the road user charge; • 'Energy Grants Act' is a reference to the Energy Grants (Credits) Scheme Act 2003 ; • 'entity' refers to an entity that is registered or required to be registered for GST or is a non-profit body that provides emergency services in a clearly identifiable emergency services vehicle; [1] • 'fuel' is a reference to 'taxable fuel' as defined in section 110-5; • 'GST Act' is a reference to the A New Tax System (Goods and Services Tax) Act 1999 ; • 'GVM' (gross vehicle mass) of a vehicle means the maximum loaded mass of a vehicle: (a) as specified by the manufacturer; or (b) as specified by the vehicle registration authority if: (i) the manufacturer has not specified a maximum loaded mass; or (ii) the manufacturer cannot be identified; or (iii) the vehicle has been modified to the extent that the manufacturer's specification is no longer appropriate; [2] • 'heavy vehicle' means: (a) a vehicle of more than 4.5 tonnes GVM; or (b) a vehicle of 4.5 tonnes GVM acquired before 1 July 2006 that uses on-road diesel fuel acquired, manufactured or imported on or after that date for travelling on a public road; [3] • 'Revised EM' is a reference to the Revised Explanatory Memorandum to the Fuel Tax Bill 2006 and the Fuel Tax (Consequential and Transitional Provisions) Bill 2006; • 'Transitional Act' is a reference to the Fuel Tax (Consequential and Transitional Provisions) Act 2006 ; and • 'you' in relation to provisions applies to entities generally unless its application is expressly limited; [4] • it is assumed that: • if you are entitled to a fuel tax credit you meet the requirements that entitle you to the credit and are not disentitled by the disentitlement rules [5] in the FT Act; • if you are entitled to a fuel tax credit the requirements of either item 10 or 11 of Schedule 3 to the Transitional Act are met; and • if you are claiming more than $3 million each financial year in fuel tax credits you meet the requirements of the Greenhouse Challenge Plus Programme or another programme determined, by legislative instrument, by the Environment Minister for the purposes of section 45-5.

This Ruling applies to the class of entities who acquire or manufacture in, or import into, Australia taxable fuel for use in carrying on an enterprise. [6]

In working out the amount of your fuel tax credit, to the extent that you acquire fuel for use in your enterprise in a vehicle for travelling on a public road, you must reduce the amount by the road user charge. [7]

However, you do not reduce the amount of your fuel tax credit by the road user charge if the vehicle's travel on a public road is incidental to the vehicle's main use. [8]

In subsections 43-10(3) and (4) 'vehicle' includes any vehicle that is capable of being authorised to travel on a public road by a relevant road traffic authority, whether or not the vehicle is designed for road travel or ordinarily travels on a public road.

The term 'vehicle' is not restricted in meaning to a conveyance for the carriage of passengers or goods. Nor is the term 'vehicle' confined to a self-propelled vehicle.

The term 'vehicle' includes any plant, machinery or equipment that is capable of locomotion and which may be authorised to travel on a public road by a relevant road traffic authority.

In subsections 43-10(3) and (4), the terms 'travelling' and 'travel' [9] mean to go from one place to another place or to move from one point to another point.

A vehicle's travel begins when it commences to move and ends when it arrives at a destination, regardless of the distance.

Travel or travelling on a public road includes all the ordinary incidents of a journey undertaken by a vehicle, including stopping and idling while stationary in the course of a journey.

[Omitted.]

You are entitled to a partial fuel tax credit (full fuel tax credit minus the road user charge) from 1 July 2006 for fuel acquired to use in a vehicle for travelling on a public road.

If the movement of your vehicle on a public road does not constitute 'travelling on a public road' and you would not have been entitled to an on-road credit under the Energy Grants Act for the fuel acquired for this movement you are entitled to: • a half fuel tax credit from 1 July 2008 to 30 June 2012; and • the full fuel tax credit from 1 July 2012. [9B]

However, if the movement of your vehicle on a public road does not constitute 'travelling on a public road' and you would have been entitled to an on-road credit under the Energy Grants Act for the fuel acquired for this movement you are entitled to: • a partial fuel tax credit from 1 July 2006 to 30 June 2012; and • the full fuel tax credit from 1 July 2012. [9C]

The movement of a vehicle engaged in road construction, repair or maintenance to and from a road works site is 'travelling' for the purposes of subsection 43-10(3).

However, 'travelling' in the sense contemplated by subsection 43-10(3) does not include the movement of a vehicle on a public road or portion of a public road where: • the vehicle is engaged in the construction, repair or maintenance of the road; and • that road or portion of that road is under construction, repair or maintenance.

The movement of a vehicle engaged in the construction, repair or maintenance of a road, for example, a grader, bulldozer, water cart or street sweeper which occurs on the road or portion of the road that is under construction, repair or maintenance is not 'travelling' for the purposes of subsection 43-10(3).

The expression 'for travelling' in subsection 43-10(3) refers to the purpose for which taxable fuel is acquired. The amount of fuel tax credit for taxable fuel that is acquired to use, in a vehicle, for travelling on a public road, is reduced by the amount of road user charge.

Fuel to use 'for travelling', in the context of subsection 43-10(3), encompasses not only fuel for propulsion, but also fuel for aspects of the vehicle's function and operation that are for the purpose of travelling on a public road. Fuel for travelling would include fuel used for stopping and idling while stationary in the course of a journey as well as the use of lights, brakes, power-steering and windscreen wipers. It would also include the use of fuel to power the air-conditioning unit of the cabin of a vehicle and passenger air-conditioning in a bus.

Determining whether an aspect of the vehicle's function or operation has this character requires a practical assessment of its connection with travelling, as distinct from some other function of the vehicle.

In assessing this connection, where the relevant machinery or source of the fuel is located is not determinative. Similarly, the design of the engine is not determinative of the connection between the vehicle's function or operation and travel.

The expression 'for travelling' does not include fuel used for a purpose unrelated to a vehicle's movement on a public road.

A truck delivers goods by public roads from its depot in Adelaide to a warehouse in Melbourne. The driver stops to have a meal en route to the warehouse .

The truck's travel begins when it leaves the depot and ends when it arrives at the warehouse .

A mobile crane moves from its depot to a building site to carry out construction activities. The mobile crane uses a public road to relocate from the depot to the building site .

The mobile crane's travel begins when it leaves the depot and ends when it is positioned for lifting at the building site .

A cherry picker is used for power line maintenance along a public road. The cherry picker moves along the road and stops at power poles to allow workers to replace electricity conductors. Sometimes the main engine is switched off while the maintenance is carried out, at other times it is left idling. The cherry picker uses the public road to move from one point to another .

The cherry picker's travel begins when it leaves its depot and ends when it stops at a point to carry out repairs, and recommences when it moves from that point to the next point along the road. The vehicle's travel does not include standing on the road while the maintenance functions are carried out .

A garbage truck collects rubbish from rubbish bins along a public road. The garbage truck moves along the road to a bin, momentarily stops to empty the contents of the bin into its enclosed rubbish container using an automated side lift, and then moves to the next bin. A compacting mechanism compacts the rubbish inside the enclosed rubbish container. The garbage truck deposits the collected rubbish at a council landfill site. The garbage truck is using the public road to collect rubbish and transport the rubbish collected to a landfill site .

The garbage truck's travel begins when it leaves its depot and ends when it arrives back at the depot. The fuel used for the vehicle to travel along the public road is subject to the road user charge. The fuel used to operate the bin lift and the compacting mechanism is unrelated to the vehicle's movement along the public road. Hence, the fuel used to operate the bin lift and the compacting mechanism is not subject to the road user charge .

The Shahani Shire Council (Shahani) uses a diesel powered street sweeper with a GVM of 7 tonnes to wash and vacuum public roads managed by the shire .

The street sweeper uses a public road to move from its depot to the point where it commences washing and vacuuming (cleaning) the road. Upon cleaning the road, it transports collected rubbish to a waste collection site and returns to its depot .

The street sweeper's travel begins when it leaves its depot and ends when it stops at a point to commence cleaning the road, and recommences when it completes cleaning the road and ends when it arrives back at the depot. This travel includes the transportation of collected rubbish to the waste collection site .

Following on from Example 5, the street sweeper carries out maintenance work on the public road by washing and vacuuming the road .

The street sweeper's movement on the public road when it is washing and vacuuming the road does not constitute travel as contemplated by subsections 43-10(3) and (4 ). The street sweeper is engaged in the maintenance of the road .

The Boilabilly Shire Council (Boilabilly) uses a grader to patrol and maintain public roads controlled by the shire, and to construct roads .

The grader uses the public road to move from its depot to the point where it commences inspecting the road to carry out maintenance work as required, or to construct roads. After inspecting the road or constructing the road, it returns to its depot .

The travel begins when it leaves its depot and ends when it stops at a point to commence inspecting the road or constructing the road, and recommences when it completes inspecting the road or constructing the road and ends when it arrives back at the depot .

Following on from Example 7, the grader patrols, that is, moves slowly along a public road while the driver inspects the road. As necessary, the grader carries out maintenance work on the road surface .

The grader's movement on the public road in the course of inspecting the road does not constitute travel as contemplated by subsections 43-10(3) and (4 ). The stretch of road being patrolled is considered to be under maintenance and the grader is engaged in the maintenance of the road .

Following on from Example 7, the grader carries out road construction and maintenance activities on a public road by grading the road surface and spreading road material. To do this work, the grader moves along the road .

The grader's movement in the road construction and maintenance activity on the public road does not constitute travel as contemplated by subsections 43-10(3) and (4 ). The road is under construction and maintenance and the grader is engaged in the construction and maintenance of the road .

A refrigerated vehicle transports temperature sensitive goods and travels on a public road. The goods are cooled by a refrigeration unit that is powered by fuel stored in a tank separate to that which supplies the main engine. The fuel that powers the refrigeration unit is not ' for travelling'. The fuel is used for the purpose of refrigeration. The location of the fuel is not determinative .

[Omitted.]

A truck used for long distance travel is fitted with a sleeper cab where the driver can take rest breaks as required by the relevant state legislation. While the truck is stationary and the engine is turned off, the sleeper cab is cooled by an air-conditioner that is powered by an auxiliary engine, which draws fuel from the fuel tank that supplies the truck's main engine. The fuel that powers the auxiliary engine for the sleeper cab air-conditioner is not ' for travelling'. The fuel is used for the purpose of cooling the sleeper cab. The design of the sleeper cab air-conditioning is not determinative .

The term 'public road' is not defined in the FT Act and therefore it takes its ordinary meaning.

For the purposes of subsections 43-10(3) and 43-10(4), examples of a 'public road' include, a road: • opened, declared or dedicated as a public road under a statute; • vested in a government authority having statutory responsibility for the control and management of public road infrastructure; or • dedicated as a public road at common law.

For the purposes of subsections 43-10(3) and (4) a public road encompasses any shoulder of the road and auxiliary lanes, for example emergency lanes.

For roads that do not otherwise fall within the ordinary meaning of the term public road, examples of roads that are not public roads for the purposes of subsections 43-10(3) and 43-10(4) include: • a road constructed or maintained under a statutory regime by a public authority that is not an authority responsible for the provision of road transport infrastructure, in circumstances where the statutory regime provides that public use of, or access to, the road is subordinate to the primary objects of the statutory regime; • forestry roads; • private access roads for use in mining operations; or • a road that has not been dedicated as a public road over privately owned land.

For the purposes of subsection 43-10(4), a vehicle's 'main use' is the vehicle's primary or principal use.

A vehicle's 'main use' is a question of fact, to be decided on the facts and circumstances of each case by a process of evaluation and after weighing a range of factors including: • the purpose for which the vehicle is designed; • any specific alterations or modifications which makes the vehicle's use different from the use for which it was originally designed; • the ordinary pattern of use of the vehicle; • time spent or distance travelled (as appropriate) by the vehicle in carrying out a particular operation, compared to the time or distance spent in carrying out other operations; and • the nature of the entity's enterprise.

Where a vehicle is purpose-built or permanently modified to carry out a specialised function and it is used to carry out that function, the main use of that vehicle can be characterised as that specialised function even though the vehicle may not carry out that function for the majority of its operating time.

You must identify a vehicle's main use so that it is clear what relationship the vehicle's travel on a public road bears to the vehicle's main use. The description of the vehicle's main use must be capable of indicating the relationship it bears to travel on a public road.

Restless Moon Enterprises Ltd (Restless Moon) owns a tray truck with a GVM of more than 4.5 tonnes which is used to transport goods on its farm and on a public road to transport produce to market. A tray truck is a vehicle designed for the transportation of goods on a road .

Having regard to the design and use of the vehicle, the main use of Restless Moon's tray truck is to transport goods .

Wishy Washy Pty Ltd (Wishy Washy) uses a water cart to suppress dust and facilitate the compaction of road material at a road construction site. A water cart is purpose-built to transport and spray water. Wishy Washy's vehicle is engaged in actually spraying water for less than half of its operating time .

Having regard to the design and use of the vehicle, the main use of Wishy Washy's water cart is to transport and spray water .

Liftaloft Co (Liftaloft) uses a mobile crane to carry out lifting and positioning of heavy objects across a range of sites. A heavy mobile crane is designed to lift and position heavy objects while stationary. Liftaloft's mobile crane travels to and from work sites under its own power and may spend hours or days at a work site .

Having regard to the design and use of the vehicle, the main use of Liftaloft's mobile crane is to lift and position heavy objects while stationary .

Marvin's Enterprises Ltd (Marvin) uses a concrete truck to transport and deliver concrete in its plastic state to construction sites. A concrete truck is designed to transport and deliver concrete in its plastic state .

Having regard to the design and use of the vehicle, the main use of Marvin's concrete truck is to transport concrete .

The Lucinup Shire Council (Lucinup) uses a grader to construct and maintain roads in the shire. A grader is designed to cut, move and spread material on roads and road-related areas .

Having regard to the design and use of the vehicle, the main use of Lucinup's grader is to undertake grading in road construction and maintenance .

For the purposes of subsection 43-10(4), the expression 'incidental to' means: • not essential, not necessary or not integral to; and/or • minor or subordinate to.

Travel on a public road by a vehicle whose main use involves the use of a public road for the transportation of passengers or goods is not travel incidental to the vehicle's main use. Travel by such a vehicle on a public road is always integral to the main use of the vehicle. Subsection 43-10(4) has no application to travel by a vehicle engaged in the transportation of passengers or goods by public road.

Travel on a public road by a special purpose vehicle that is designed for road travel and ordinarily travels on a public road [10] is not travel incidental to the vehicle's main use if the travel is integral to that main use, for example, travel to and from a work site for any vehicle will not be incidental.

Travel by a vehicle that is designed primarily for off-road use [11] and which is used mainly in off-road activities is incidental where it occurs in the course of the vehicle's off-road use and: • is insubstantial in extent; or • is so interspersed with the vehicle's off-road use (its main use) so as to be part of that off-road use.

The determination of whether travel is incidental to a vehicle's main use turns on the particular facts of each case and requires a process of evaluation, after weighing all the relevant factors.

Where a vehicle is at the work site and commences its off-road activity, for example grading or spraying water, travel on a public road during the course of this activity is incidental to its main use where it is insubstantial in extent or is so interspersed with its main off-road use so as to be part of that off-road use.

Roo Minate Enterprises Ltd (Roo Minate) carries on a primary production business on an agricultural property. Parts of the property are separated by a public road. Roo Minate uses a harvester it owns to harvest crops on its farm. In the course of harvesting, the harvester travels 2 kilometres on the public road to get from one part of the property to another .

The harvester's main use is to harvest crops. The harvester only travels on the road to go from one part of the farm to another during the course of harvesting. The travel on the public roads is insubstantial in extent, and occurs in the course of the harvester's off-road use. The travel on the public road is incidental to the harvester's main use .

In the course of carrying on its enterprise, Waterwize Enterprises (Waterwize) uses a water cart on a construction site that straddles a public road. To move between parts of the construction site, the water cart has to travel along or across the public road. The distance travelled along the public road is no more than 500 metres .

The water cart travels along or across the public road on several occasions during the day. The water cart's main use is off road to transport and spray water within the construction site for dust suppression .

The water cart's travel on the public road occurs in the course of its off-road use. The travel on the public road is incidental to the water cart's main use as it is so interspersed with its off-road use so as to be part of that vehicle's off-road use (main use ).

Following on from Example 16, the water cart is garaged overnight at Waterwize's depot. At the beginning of each day the water cart travels from the depot to the construction site and returns to the depot at the end of the day .

This travel is not in the course of the water cart's off-road use and is not incidental to the cart's main use .

Joshua's Enterprises Ltd (Joshua) transports concrete in its plastic state to construction sites. Joshua uses a concrete truck to maintain the concrete in its plastic state by agitation while the concrete is transported from a concrete plant to building construction sites .

The main use of the concrete truck involves using public roads to transport concrete in its plastic state. The travel that the truck undertakes in transporting the concrete is not incidental to the vehicle's main use. This travel is integral to the main use of the vehicle .

Reapers Grim Co (Reapers) carries on a contract harvesting enterprise. Reapers uses its harvester to provide harvesting services to a number of farms located across a district. The harvester is not floated and needs to travel on a public road to relocate from one job to another .

The harvester's main use is to harvest crops. However, the harvester uses the public road to travel from one property to another. The travel on the public roads does not occur in the course of the harvester's off-road use. The travel on the public road is not incidental to the harvester's main use .

This Ruling applies from 1 July 2006.

However, the Ruling does not apply to taxpayers to the extent that it conflicts with the terms of a settlement of a dispute agreed to before the date of issue of the Ruling (see paragraphs 75 to 76 of Taxation Ruling TR 2006/10).

Subsection 43-10(3) is the legislative mechanism for reducing, by the amount of the road user charge, the amount of an entity's fuel tax credit for taxable fuel acquired for use in its enterprise in a vehicle for travelling on a public road. This means that the entity is entitled to a partial fuel tax credit in respect of fuel used in that travel.

The road user charge is a key element of the national heavy vehicle charges system to recover heavy vehicles' share of costs of providing and maintaining the public road network. The road user charge is a non-hypothecated charge raised as a portion of the tax on fuel. The remaining part of cost recovery is collected by State and Territory governments as heavy vehicle registration charges. [12]

The rate of the road user charge is determined by the Federal Minister for Transport in accordance with the National Transport Commission's (NTC) heavy vehicle charges determination process and is subject to periodic review. [13]

The road user charge applies generally to travel by heavy vehicles on public roads. The Explanatory Statement to the Road User Charge Determination 2006 (No. 1) states: The Fuel Tax Act 2006 (the Act) establishes a mechanism to reduce the fuel tax credit provided to eligible businesses and non-profit bodies for fuel used on a public road in vehicles with a gross vehicle mass of more than 4.5 tonnes for business purposes.

This understanding of the policy intent of the road user charge is consistent with the approach taken by the NTC in determining heavy vehicle registration charges.

The NTC determines registration charges for all heavy vehicles using public roads. In determining what level of registration charge is appropriate for a particular class of vehicle, the NTC takes into account the rate of fuel consumption of the class of vehicle on a public road and therefore the extent to which costs are recovered through the road user charge. [14]

Subsection 43-10(4) provides a carve-out [15] from the application of the road user charge in the calculation of the amount of the fuel tax credit to which an entity is entitled. The application of this subsection means that an entity's fuel tax credit is not reduced by the road user charge under subsection 43-10(3).

Having regard to the legislative and broader policy context, the purpose of the carve-out is to moderate the strict application of subsection 43-10(3) so that an entity does not need to take the road user charge into account for minor and relatively insignificant travel on a public road associated with off-road operations.

The term 'vehicle' is not defined for the purposes of subsections 43-10(3) and (4). The Revised EM provides no guidance on the meaning of 'vehicle'.

Therefore, the ordinary meaning of the term 'vehicle' is relevant in determining its meaning in the context of the two provisions.

The Macquarie Dictionary [16] relevantly defines 'vehicle' to mean: 1 . any receptacle, or means of transport, in which something is carried or conveyed, or travels. 2 . a carriage or conveyance moving on wheels or runners.

A number of cases have discussed the ordinary meaning of 'vehicle', and observed that the meaning is broader than the traditional dictionary definitions of a vehicle as a conveyance on wheels or runners for the transportation of persons or goods. [17]

R v. Pratt [18] ( Pratt ) considered the ordinary meaning of 'vehicle'. In the course of determining whether a road roller was a vehicle for the purposes of the Crimes Act 1961 (NZ), McMullin J considered a submission that the dictionary definitions of vehicles indicate that 'it is of the essence of a vehicle that its purpose is to carry passengers or some other load.' [19] In rejecting this submission, McMullin J observed: While the dictionary meanings of vehicle seem to give some emphasis to a means of conveyance used for the carriage of passengers or goods, it is noteworthy that this definition is founded on the early usage of the appliance when mechanical appliances such as tractors, road graders, bulldozers, mobile cranes were not much in vogue or had not even been developed. All these appliances are now commonly regarded as vehicles. Although not used for the carriage of goods or passengers they require to be driven by an operator who sits on or in them. It is noteworthy that a shift in meaning away from the carriage of passengers or other loads is indicated in other dictionary meanings. Hence Chambers 20th Century Dictionary defines vehicle as 'a means of conveyance or transmission' and Heinemann's New Zealand Dictionary as 'any device for moving or carrying, especially one on wheels'...The need to modify the traditional meaning to meet modern technology was mentioned in Sugar City Municipal District No. 5 v. Bennett & White (Calgary) Ltd [1950] 3 DLR 81 by Rand J at p 93: The word 'vehicle' in its original sense conveys the meaning of a structure on wheels for carrying persons or goods. We have generally distinguished carriage from haulage, and mechanical units whose chief function it is to haul other units, to do other kinds of work than carrying, are not usually looked upon as vehicles. But that meaning has, no doubt, been weakened by the multiplied forms in which wheeled bodies have appeared with the common feature of self propulsion by motor. [20]

In Anderson v. Chigwidden [21] ( Anderson ), Adam J considered whether a caravan fell within the ambit of 'other vehicle' in the Motor Car Regulations 1952 (Vic). The defendant contended that a caravan was not a vehicle, based on the 'dictionary and etymological meaning of 'vehicle' as a conveyance for the carriage of passengers or goods'. [22]

In the course of his decision, Adam J indicated that he considered that the word 'vehicle' is one 'capable of a more extended meaning should this be required by the context'. [23] He referred to Hewart CJ's comments in Garner v. Burr [1951] 1 KB 31 at page 33: Hewart CJ, said... 'It is true that, according to the dictionary definition, a 'vehicle' is primarily to be regarded as a means of conveyance provided with wheels or runners and used for the carriage of persons or goods...but I think that the Act is clearly aimed at anything that will run on wheels which is being drawn by a tractor or another motor vehicle'. Hilbery, J, said, at p. 34: 'Having regard to the purpose of the Act to which my lord has called attention, I am satisfied that we ought to give a generous construction to the material words in the Road Traffic Act 1930. I am satisfied that, for the purposes of the Act, this poultry house on wheels being drawn along the highway was a vehicle'. [24]

Although decided in the context of different legislations in other jurisdictions, the observations in Pratt and Anderson in relation to the extended meanings of 'vehicle' are relevant to the meaning of the term in subsections 43-10(3) and (4). The Commissioner considers that the term 'vehicle' in those provisions is not restricted to a conveyance for the carriage of passengers or goods. Nor is the term 'vehicle' confined to self-propelled vehicles, that is, it includes anything that will run on wheels that is drawn by another vehicle.

Based on the modern ordinary usage of 'vehicle' as expounded in the courts, it is clear that the term 'vehicle' is broader than 'motor vehicle' and should not be construed as referring only to a conveyance for the carriage of persons or goods.

This is consistent with the policy intent of the road user charge under subsection 43-10(3) of the FT Act, which is intended to apply to heavy vehicles generally. Therefore, the term 'vehicle' should not be read restrictively to mean only vehicles that convey passengers or goods. This interpretation is consistent with the observations of the courts as well as the generality of the term in comparison with the more restrictive terms 'road vehicle' in the Energy Grants Act [25] or 'motor vehicle' in section 41-25 of the FT Act.

Therefore, the term 'vehicle' should be construed in a broad, rather than a narrow sense to include any vehicle that can be authorised to travel on a public road by the relevant road traffic authority and is not restricted to registered vehicles. [26] This includes plant, equipment or machinery that is capable of locomotion and which may be authorised to travel on a public road by the relevant road traffic authority.

Since an entitlement to a fuel tax credit in the context of travelling on a public road can only arise for a heavy vehicle, the term 'vehicle' in subsections 43-10(3) and (4) necessarily refers only to a heavy vehicle.

The table below lists examples of heavy vehicles for the purposes of subsections 43-10(3) and (4). prime mover trailer semi-trailer B-double road train truck grader backhoe loader front-end loader wheeled excavator mobile crane mobile elevated working platform (travel tower, cherry picker) mobile concrete pump truck-mounted drilling rig forklift wheeled bulldozer fertiliser spreader harvester combine harvester cane transporter tractor street sweeper garbage truck

The terms 'travelling' and 'travel' are not defined in the FT Act. Furthermore, the Revised EM provides no guidance as to the meaning of 'travelling' and 'travel' for the purposes of subsections 43-10(3) and (4).

Therefore, the ordinary meaning of the terms is relevant in determining its meaning in the context of the two provisions.

The Macquarie Dictionary [27] relevantly defines 'travel' to mean: verb (i ) 1 . to go from one place to another; make a journey: to travel for pleasure . 2 . to move or go from one place or point to another. ... noun 11 . the act of travelling; journeying, especially in distant or foreign places. ... 15 . movement or passage in general.

The ordinary meaning of the term 'travelling' was considered in Prospect District Council, Re By-law ; Hill, Exp [28] ( Prospect District Council ). In the course of discussing a district council's power, through by-law, to regulate and control passing or travelling of certain vehicles in or along streets and roads, and to regulate the traffic and standing of vehicles in streets and roads, Murray CJ observed that: The words 'passing', 'travelling' and 'standing' are used, but the word 'stopping' is not...If it is not included in 'standing', I cannot doubt that it comes within 'travelling.' 'Stopping,' I should say, is the beginning of 'standing,' and is an ordinary incident of 'travelling.' [29]

The observation in Prospect District Council in relation to the ordinary meaning of 'travelling' is relevant to the meaning of the term in subsections 43-10(3) and (4). As such, the term 'travelling' does not require a continuous movement in going by road from one place or point to another. When read in context, the term 'travelling' in subsection 43-10(3) is intended to cover all the ordinary incidents of road travel, which includes stopping and idling while stationary in the course of travelling.

Having regard to the purpose of subsection 43-10(3) in relation to the recovery of the cost of public road infrastructure, the terms 'travelling' and 'travel' in subsections 43-10(3) and (4) mean movement from one place to another using a road.

Travel relates directly to road use. It is an apt concept for applying the road user charge to heavy vehicles, as the charge is linked to the wear and tear caused by heavy vehicles using public roads and the added cost of providing public road infrastructure capable of carrying heavy vehicle traffic.

Travel begins when a vehicle commences a journey from the starting point and finishes when it arrives at the point of destination, regardless of the length of the journey.

[Omitted.]

[Omitted.]

[Omitted.]

[Omitted.]

[Omitted.]

[Omitted.]

[Omitted.]

[Omitted.]

However, not every movement of a vehicle on a road is travel. Where a vehicle is engaged in road construction, repair or maintenance and moves on the road or portion of the road that is under construction, repair or maintenance in the course of carrying out this work, the vehicle does not 'travel' on the road in the sense contemplated by subsections 43-10(3) and (4). The purpose of this movement is to benefit the road, not to use the road to relocate the vehicle.

However, if such a vehicle is driven to a new location to carry out road construction, repair or maintenance, it uses the road to travel to that new location.

The Commissioner considers that, having regard to the policy context of subsection 43-10(3), it would be inconsistent with that policy intent to impose the road user charge on a vehicle in the course of undertaking road construction, repair or maintenance, as the vehicle is not contributing to wear and tear on the road.

Having regard to the Transitional Act and the Energy Grants Act, it is clear that an entitlement to a fuel tax credit for a vehicle undertaking these functions is intended to be phased in up to 30 June 2012 and will not be subject to the road user charge when fully implemented. [30]

The expression 'for travelling' in subsection 43-10(3) refers to the purpose for which taxable fuel is acquired. The amount of fuel tax credit for taxable fuel that is acquired to use, in a vehicle, for travelling on a public road, is reduced by the amount of road user charge. Therefore, the purpose for which fuel is acquired determines whether the amount of fuel tax credit is reduced by the road user charge.

The term 'travelling' has particular application in subsection 43-10(3).

In Linfox Pty Ltd v. Commissioner of Taxation [30A] the Administrative Appeals Tribunal considered the meaning of the phrase 'to use, in a vehicle, for travelling on a public road'. It said: ...[A]s the provision is expressed, it is clear that two conditions must be satisfied before s 43-10(3) is triggered: first, the fuel must be acquired to use in a vehicle; and second, the fuel must be acquired to use for travelling on a public road. ... ...[W]e consider that the only circumstance in which the second condition is s 43-10(3) is met, is the circumstance where fuel is acquired to use for the purpose of travelling on a public road.

Fuel in a vehicle can be said to serve several purposes, such as powering mechanical propulsion and auxiliary equipment. Travelling, in the context of fuel use in subsection 43-10(3), encompasses all aspects of vehicle function and operation that are for the purpose of travelling on a public road. Fuel for travelling would include fuel used for stopping and idling while stationary in the course of a journey as well as the use of lights, brakes, power-steering and windscreen wipers. It would also include the use of fuel to power the air-conditioning unit of the cabin of a vehicle and passenger air-conditioning in a bus.

Determining whether an aspect of the vehicle's function or operation has this character requires a practical assessment of its connection with travelling, as distinct from some other function of the vehicle.

The location of the relevant machinery or source of the fuel associated with a vehicle's function or operation is not determinative of whether fuel is for use in travel. The design of the engine, or how the vehicle operates, is also not determinative of this. Provided fuel directly or indirectly powers machinery sufficiently connected with the travel the fuel is to use, in a vehicle, for travelling.

The term 'public road' is not defined in the FT Act and therefore it takes its ordinary meaning [31] . A public road is a road that is available for use by members of the public.

At the time that the Fuel Tax law was introduced, the relevant Explanatory Memorandum [32] provided a non-exhaustive list of some examples of roads that are public roads and by contrast, those that are not public roads.

For the purposes of subsections 43-10(3) and 43-10(4), examples of public roads, include a road that is: • opened, declared or dedicated as a public road under a statute; • vested in a government authority having statutory responsibility for the control and management of public road infrastructure; or • dedicated as a public road at common law.

In Australia, the vast majority of public roads are constructed by government. There are statutory authorities in each state and territory which are responsible for the construction, management and maintenance of the public road transport infrastructure within their own jurisdictions. Roads which are constructed, managed or maintained by these authorities are public roads. These roads fall into three main categories, being: • national highways; • state and territory highways and main roads; and • local roads and streets.

The Commissioner considers, that having regard to the road user charge system, [32A] a public road for the purposes of subsections 43-10(3) and (4) includes any shoulder of the road and auxiliary lanes, for example emergency lanes.

If a road is not under the control and management of a state or territory authority which is responsible for the provision of road infrastructure to the public, it may nevertheless have been opened, declared or dedicated as a public road under a statute.

A road may also be dedicated a 'public road' by virtue of common law. In order to establish that a road has been dedicated as a public road at common law, there must be established an unequivocal indication of the intention of the owner of the land to dedicate it to the public as a road. [33]

To establish whether a land owner has dedicated a road as a public road under the common law, some of the matters to be considered are: • whether there has been a declaration of an intention to dedicate; • delineation on maps or plans of roads set apart for public use; • use by the public; • whether vehicles must be registered to use the road and state or territory traffic laws are applicable while the vehicles use the road; or • the expenditure of money by public bodies in forming or maintaining the land as a road.

When considered with all the relevant evidence, the above matters may amount to an unequivocal indication of the intention of the owner of the land to dedicate it to the public as a road. Where the public has accepted this dedication (as evidenced by their use of the road as a public road), the road is a public road.

For roads that do not otherwise fall within the ordinary meaning of the term public road, examples of roads that are not public roads for the purposes of subsections 43-10(3) and 43-10(4) include a: • road constructed or maintained under a statutory regime by a public authority that is not an authority responsible for the provision of road transport infrastructure, in circumstances where the statutory regime provides that public use of, or access to, the road is subordinate to the primary objects of the statutory regime; • forestry road; • private access road for use in a mining operation; or • road that has not been dedicated as a public road over privately owned land. [36]

If a statutory scheme confers a limited right of public access, which is subordinate to the main objects of the statute, then members of the public have a lesser entitlement to that access than the entitlement they have to use public highways, main roads, local roads and suburban streets. Such roads cannot be characterised as public roads.

Whilst members of the public may use these roads, their use is subordinate to the use of the authority, which may deny, without any notice, access to the road by members of the public.

A forestry road is a road within a forest or plantation which is constructed and maintaind primarily and principally for the purposes of providing access to an area to facilitate forestry activities (for example, to facilitate trees to be planted or tended in the area, or timber felled in the area to be removed) and for related forestry management activities. [37]

The Commissioner takes the view that forestry roads are not public roads even if public access is allowed. The use of forestry roads for purposes not related to the primary objects of forestry management and the production and harvesting of timber does not make these roads public roads.

On occasions, responsibility for a forestry road is formally passed from the forestry authority to a local government authority or to a state or territory authority having responsibility for highways and main roads. In such cases, the affected road will thereafter be a public road even if, after the transfer, it is formally declared by the state or territory main road authority or local government authority to be a 'forest road'. The transfer of control and management of the road to the authority having responsibility for highways and main roads results in the road being declared or dedicated as a public road.

A private access road for use in mining operations is a private road which is constructed and maintained by a person who carries on a mining operation for the purposes of providing access to, or from, either a mining operation or a place at which beneficiation of minerals or mineral ores occurs. [38]

On occasions, responsibility for a mining road is formally passed from the mining operator to a local government authority or a state of territory authority having responsibility for highways and main roads. In such cases, the affected road will thereafter be a public road even if, after the transfer, it is formally declared by the state or territory main road authority or local government authority to be a 'mining road'. The transfer of control and management of the road to the authority having responsibility for highways and main roads results in the road being declared or dedicated as a public road.

For roads over privately owned property an owner may permit members of the public to pass over the property. A person may lawfully enter private land where the person has an express or implied invitation, licence, permission, lawful authority or consent of the person in possession of the land.38A

The use of a road over private land by members of the public does not create a public road, notwithstanding that the owner of the land does not hinder the use of the road by the public. Private land cannot become a public road without an effective act of dedication by the owner. [38B]

The expression 'main use' is not defined in the FT Act.

The term 'main' is relevantly defined in the Macquarie Dictionary [39] as 'chief; principal; leading' and in the Australian Oxford Dictionary [40] as 'chief in size, importance, extent, etc.; principal'.

While in some contexts the term 'main' may be taken to mean 'more than half', [41] this interpretation is not always useful when considering the main use of a heavy vehicle. Necessarily, the context is relevant in determining what the expression 'main use' means. [42]

The concept of main use applies to 'the vehicle'. This suggests it applies to a particular vehicle, not the class of vehicle to which the vehicle belongs, and looks at this particular vehicle's typical pattern of use. The singular expression 'main use' also implies that a vehicle has a particular use that can be identified as its main use.

A vehicle's main use may change if the vehicle's pattern of use changes.

Subsection 43-10(4) requires an entity to identify a vehicle's main use for the purpose of determining if travel on a public road is incidental to that main use. The way in which main use is defined, then, must be sufficiently specific to clearly indicate the relationship that the vehicle's main use bears to travel on a public road.

A vehicle's 'main use' is a question of fact, to be decided on the facts and circumstances of each case by a process of evaluation and after weighing a range of factors including: • the purpose for which the vehicle is designed; • any specific alterations or modifications which make the vehicle's use different from the use for which it was originally designed; • the ordinary pattern of use of the vehicle; • time spent or distance travelled (as appropriate) by the vehicle in carrying out a particular operation, compared to the time or distance spent in carrying out other operations; and • the nature of the entity's enterprise.

The main use of a vehicle will usually be self-evident and indicated by the vehicle's design. However, it is also necessary to consider the way in which the vehicle is actually used.

Where a vehicle is purpose-built or permanently modified to carry out a specialised function and is used to carry out that function, the main use of that vehicle may be that specialised function even though the vehicle does not spend the majority of its operating time carrying out that function. This is because other activities that the vehicle carries out, such as travelling to and from work sites, serve that specialised function rather than dictate the vehicle's main use.

The expression 'incidental to' is not defined for the purposes of subsection 43-10(4).

The Macquarie Dictionary [43] relevantly defines 'incidental' as: 1 . happening or likely to happen in fortuitous or subordinate conjunction with something else. 2 . incurred casually and in addition to the regular or main amount: incidental expenses'. ... 5. incidental to , liable to happen in connection with; naturally appertaining to.

The Australian Oxford Dictionary [44] relevantly defines 'incidental' as: 1 . (often foll. by to ) a having a minor role in relation to a more important thing, event, etc. b not essential; 2 . (foll. by to ) liable to happen.

From these definitions it is clear that the ordinary meaning of 'incidental' encompasses various shades of meaning. Something is 'incidental' only in relation to something else that is principal, yet the incidental thing is not essential or integral to the principal thing, even though it may usually or always be associated with it. Another element of the meaning is that an incidental thing is minor in extent or in importance relative to, or subordinate to, the principal thing.

As noted by Rushing PJ in the Californian case People v. Dominguez , [45] there is an inherent tension in the concept of 'incidental', where a thing tends to accompany something else but is not essential to it. Something that tends to accompany something else is often - depending on the context - characteristic, significant or essential. [46] Rushing PJ observed: ... 'incidental' is widely used throughout the law, with context generally determining which of its two aspects dominates its application. In many if not most settings, it is given the meaning of secondary, inessential, or minor. In some contexts, however, emphasis is placed on the relational aspect of the term. [47]

Having regard to the object or purpose of subsection 43-10(4), the phrase 'incidental to' means: • not essential, not necessary or not integral to; and/or • minor, or subordinate to.

The expression 'incidental to' in the context of subsection 43-10(4) has a relational aspect and a comparative aspect. The relational aspect considers whether or not something is inessential to or separable from the principal thing. The comparative aspect looks at the thing's significance from a quantitative point of view. Both of these aspects have a role to play in determining whether travel is incidental to a vehicle's main use.

Subsection 43-10(4) is expressed broadly, so that it could be interpreted to apply to travel that falls outside the intended scope of the provision as indicated by the extrinsic material.

The Revised EM indicates that the carve-out is intended to apply only to vehicles primarily designed for an off-road use but which may travel on a public road in the course of their operations.

In determining whether a vehicle's travel is incidental to its main use, a practical commonsense approach needs to be taken in weighing and evaluating a range of factors having regard to the facts and circumstances of each case.

Taking into account the object of the provision, it is the Commissioner's view that the carve-out does not apply to travel on a public road by a vehicle whose main use involves the use of a public road for travelling. Thus the carve-out has no application for vehicles engaged in the transportation of persons or goods by public road.

In addition, the carve-out does not apply where a special purpose vehicle, such as a mobile crane, concrete pump, mobile elevated working platform or drilling rig, uses a public road to travel, for example, to or from a work site. Such vehicles are designed to travel on a public road and are often overmass vehicles having a substantial impact on roads. Travel by such a vehicle in the course of its relocation from one site (for example, depot) to another (for example, work site) is similar in nature to road transportation.

In both these cases, it is reasonable to hold that travel on a public road is never incidental because it is so integral to the use of the vehicle so as to become part of or inseparable from its main use.

Travel on a public road by a vehicle that is designed primarily for off-road use [48] and which is used mainly in off-road activities is incidental where it occurs in the course of the vehicle's off-road use and: • is insubstantial in extent; or • is so interspersed with the vehicle's off-road use (its main use) so as to be part of that off-road use.

Incidental travel by these vehicles occurs fortuitously or casually in conjunction with their off-road use and is minor in extent.

Travel on a public road by a vehicle of this kind is not incidental where: • it is substantial in extent; or • the vehicle uses the road to travel to or from an off-road work site.

The movement by a vehicle engaged in road construction, repair or maintenance on a road works site is not travel. [49] However, in the course of working in road construction, repair or maintenance (its main use) the vehicle may travel on a public road off the road works site in a way that is incidental to its main use. In determining whether the travel is incidental, the principles explained in paragraphs 152 to 154 of this Ruling apply.

The following is a detailed contents list for this Ruling: Paragraph What this Ruling is about 1 Legislative context 3 Interpretation 6 Class of entities 8 Ruling 9 Meaning of 'vehicle' 11 Meaning of 'travel' 14 Movement by a vehicle engaged in road construction, repair or maintenance 21 Meaning of 'taxable fuel to use, in a vehicle, for travelling on a public road' 23A Example 1: travel - truck 24 Example 2: travel - mobile crane 26 Example 3: travel - cherry picker 28 Example 4: travel - garbage truck 30 Example 5: travel - street sweeper 32 Example 6: movement that does not constitute travel - street sweeper when maintaining the road 35 Example 7: travel - grader 37 Example 8: movement that does not constitute travel - grader 40 Example 9: movement that does not constitute travel - grader 42 Example 9A: fuel that is not 'for travelling' - refrigerated vehicle 43A Example 9C: fuel that is not 'for travelling' - sleeper cab 43C Meaning of 'public road' 44 Roads that are public roads 44 Roads that are not public roads 46 Meaning of 'main use' in relation to a vehicle 47 Example 10: main use - tray truck 51 Example 11: main use - water cart 53 Example 12: main use - mobile crane 55 Example 13: main use - concrete truck 57 Example 14: main use - grader 59 Travel 'incidental to' a vehicle's main use 61 Road transport 62 Vehicles for off-road use 64 Example 15: travel on a public road that is incidental to the vehicle's main use - harvester 67 Example 16: travel on a public road that is incidental to the vehicle's main use - water cart 69 Example 17: travel on a public road that is not incidental to the vehicle's main use - water cart 72 Example 18: travel on a public road that is not incidental to a vehicle's main use - concrete truck 74 Example 19: travel on a public road that is not incidental to the vehicle's main use - harvester 76 Date of effect 78 Appendix 1 - Explanation 80 The road user charge 80 The purpose or object of subsection 43-10(4) 86 Meaning of 'vehicle' 88 Meaning of 'travel' 101 Movement by a vehicle engaged in road construction, repair or maintenance 117 Meaning of 'taxable fuel to use, in a vehicle, for travelling on a public road' 120A Meaning of 'public road' 121 Roads that are public roads 122 Roads that are not public roads 127 Roads managed by statutory authority not having responsibility for highways, main roads and local roads 127A Forestry roads 128 Private access roads for mining operations 129 Road that has not been dedicated as a public road over privately owned land 129B Meaning of 'main use' in relation to a vehicle 130 Meaning of 'incidental to' 139 Travel 'incidental to' a vehicle's main use 144 Road transport 149 Vehicles for off-road use 152 Road construction, repair or maintenance 155 Appendix 2 - Detailed contents list 156