Fuel Tax Credits

Fuel rebates for power generation and on road transport

Fuel tax credits commenced on 1 July 2006 as part of the Government’s major programme of reform to modernise and simplify the fuel taxation system.

Under these reforms, the previous system of fuel grants, rebates and remissions (including the energy grants credits scheme) has been substantially replaced with a single fuel tax credit.

Fuel tax credits help to cut fuel costs by providing a credit for the fuel tax (excise duty) included in the price of fuel, when used for specified activities.

Generating Electricity (Business or Commercial)

You can claim eligible fuel used to generate electricity in your business. This electricity can be generated by a commercial power generation plant, by a stationary generator or a portable generator.

Operating machinery and portable equipment is an eligible business use.

Registering

All businesses need to be registered for both GST and fuel tax credits before they can claim.

Your fuel tax credit period will be the same as the GST tax period that applies to you (for example, monthly, quarterly or annual). Your GST tax period will not change because you register for fuel tax credits.

If you are registered for GST and were previously registered for the EGCS, we automatically registered you for fuel tax credits.

If you are registered for GST and not previously registered for the EGCS, you can register for tax credits by:

• Phoning 13 72 26 anytime and providing your details using interactive voice recognition (IVR)
• Completing the form Add a new business account (NAT2954) or
• Phoning 13 28 66 between 8.00am and 6.00pm, Monday to Friday.

Calculating Your Fuel Tax Credit

Before you can claim your fuel tax credits on your business activity statement, you must calculate the amount of your entitlement. You need to:

• Calculate your eligible litres for each fuel type and for each activity, and
• Work out the amount of your fuel tax credit in dollars.

You are entitled to claim a fuel tax credit at the time you acquire, manufacture or import the fuel into Australia (intended use). However, you may wish to make your fuel tax credit claim after you have used the fuel (actual use).

1. The entitlement to a fuel tax credit for biodiesel, ethanol, LPG, LNG and CNG does not commence until 1 July 2011 because no fuel tax (Excise or Customs Duty) is charged on these fuels until this date.
2. Those fuels where there was an entitlement to 50% of the effective fuel tax paid on the fuel from 1 July 2008 will be entitled to a full credit from 1 July 2012.
3. Diesel includes blends that meet the Diesel Fuel Standard.
4. This rate may be subject to change.

Calculating Eligible Litres—Basic Calculation Methods

You will need to self-assess your claims. This means that you are responsible for assessing your own eligibility, for calculating the dollar amount and for keeping records that support your fuel tax credit claims. You may be penalised if you can’t demonstrate that a claim is correct.

The following calculation methods are considered by the Commissioner to be fair and reasonable.

There are two basic calculation methods to determine the number of eligible litres. They are:

• The constructive method—add up the litres of each eligible fuel type intended for use in eligible activities, or
• The deductive method—subtract the litres of ineligible fuel (for example, intended for used in cars the business uses on-road) from total fuel acquisitions.

If your business operations allow it, you can elect to use one of the following variations to the basic calculation methods to calculate eligible fuel.

You may also use these methods if you acquire fuel for use in generating electricity for domestic use:

• Small claimants method (estimated use)—if you operate a small business or use eligible fuel on a small scale or seasonal basis, you may be able to use the estimated use method to calculate your eligible fuel.
• The percentage use calculate method—if the ratio of your eligible use remains consistent over time, you can use the percentage use method to calculate your eligible fuel.

Record Keeping

To support your claims for a fuel tax credit, you must keep records that show that the fuel you acquired, manufactured or imported into Australia was for using in carrying on your business.

You must keep these records for five years after you make the claim. You do not need to send these records to us unless requested.

Information supplied by Australian Taxation Office: www.ato.gov.au
Contact the CMPA for a copy of the full ‘Fuel Tax Credit Guide for Businesses’

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