Fuel Tax Credits – Can You Claim?

Fuel tax credits provide businesses with a credit for the fuel tax (excise or customs duty) included in the price of fuel used in:

  • business activities,
  • machinery, plant and equipment, and
  • heavy vehicles

Therefore, most businesses can access fuel tax credits;  it is just the rate that varies (18.51c to 38.143c per litre), depending on the business activity.

The only fuels that are not eligible are aviation fuels, alternative fuels, or fuels used in light vehicles (4.5 tonne gross vehicle mass or less) travelling on a public road.

You must be registered for both GST and Fuel Tax Credits before you can make a claim which is made on business activity statements.

From 1 July 2008, the eligibility criteria for fuel tax credits was expanded, meaning most fuels used in business will be eligible for fuel tax credits.

Under the new criteria, fuel tax credits can be claimable for petrol and diesel used in vehicles travelling on public roads with a gross vehicle mass (GVM) greater than 4.5 tonnes. Diesel vehicles acquired before 1 July 2006, with a GVM of 4.5 tonnes are also eligible, as well as companies which use petrol and diesel in generating electricity. However, businesses are required to fulfil at least one of four criteria available to be eligible to claim credits prior to 1 July 2006.

Other areas where tax credit claims for fuel can be made are:

  • Diesel used in activities other than road transport that were previously eligible under the energy grants credits scheme, such as rail or marine transport, and some primary production activities including agriculture, mining, fishing and forestry.
  • Where fuels (such as diesel, petrol, kerosene, heating oil or toluene) are used in burner applications, such as heating, or for any other non-fuel use, including as a solvent or as an ingredient in the manufacture of other products (for example paint or plastic).
  • Specified fuel (including kerosene, mineral turpentine, white spirit and certain fuel blends) that is packaged in containers of 20 litres or less and sold for non-internal combustion engine use.

The above advice is intended as a guide only. Please contact Eclipse Accounting Group if you require additional information or clarification on any issues or rules.