Fuel tax credits provide businesses with a credit for the fuel tax (excise or customs duty) that’s included in the price of fuel used in:
- machinery
- plant
- equipment
- heavy vehicles
- light vehicles travelling off public roads or on private roads.
The amount depends on when you acquire the fuel, what fuel you use and the activity you use it in. Fuel tax credits rates also change regularly so it’s important to check the rates each time you do your business activity statement (BAS).
Some fuels and activities are not eligible including fuel you use in light vehicles of 4.5 tonnes gross vehicle mass (GVM) or less, travelling on public roads.
On public roads
A public road is a road that is available for use by members of the public. This includes toll roads, bus lanes and busways.
You can claim fuel tax credits for fuel you use in a heavy vehicle on public roads. This includes using fuel for:
- travelling on public roads
- movement along public roads – which is not considered travel.
If you use diesel in your heavy vehicle for travelling on public roads and it was manufactured before 1 January 1996, you need to meet an environmental criterion before you can claim fuel tax credits.
For travelling on public roads
Travelling begins when a vehicle starts to move and ends when it arrives at a destination, regardless of the distance. Fuel is used for travelling when it is used for:
- propelling the vehicle along public roads, including stopping or idling (such as idling to keep within a schedule or at a layover on a public road) in the course of the journey
- all aspects of the vehicle’s function that are for the vehicle’s operation, such as the use of lights, brakes, power-steering, windscreen wipers and powering the air-conditioning unit of the vehicle’s main cabin when travelling.
The fuel tax credit rate for fuel used in heavy vehicles for travelling on public roads is reduced by the road user charge (which is subject to change). The road user charge currently reduces any fuel tax credits to nil for gaseous fuels.
When calculating fuel tax credits for fuel used when travelling on public roads, use the ‘used in heavy vehicles for travelling on public roads’ rate.
Records you need to keep
If your heavy vehicle was manufactured before 1 January 1996 you must be able to show that it has met an environmental criterion.
Acceptable records include vehicle use and maintenance records, such as:
- receipts or dockets for oil and replacement parts
- mechanical invoices for servicing/repairs
- maintenance schedule documentation
- a DT80 test report from a registered test facility
- a membership certificate or equivalent from an accredited audited maintenance program.
If your vehicle is manufactured on or after 1 January 1996 you must be able to demonstrate this.
If your vehicle is manufactured on or after 1 January 1996 you must be able to demonstrate this.
Movement along public roads
Travelling does not include the movement of a vehicle undertaking road construction, maintenance or repair on the part of the road being constructed, maintained or repaired, such as by a grader or bulldozer.
The fuel tax credit rate for this activity is not reduced by the road user charge. Use the rate for ‘All other business uses’ in the rates table.
Vehicles are often engaged in both travel and other movement or activities as part of their operations. When claiming fuel tax credits, it is important you use the correct rate for each type of activity.