Who can claim the Fuel Tax Credits:
– Businesses registered for fuel tax credits
– The registered business must use fuel to undertake a business activity such as Primary production: Agriculture, fishing, forestry and Non-primary production: Road transport, marine transport, rail transport, generation of electricity, mining, non-fuel use, nursing or medical.
There are two types of fuel:
– Gaseous fuels – are liquefied petroleum gas (LPG), liquefied natural gas (LNG) and compressed natural gas (CNG).
Methods to calculate the eligible litres for Fuel Tax Credits:
– Basic methods
– Percentage use calculation method, and
– Small claimants method
– Approaches: constructive calculation or a deductive calculation
– Constructive method: Involves adding up the litres of each eligible fuel type intended for use in eligible activities.
– Deductive method: Involves subtracting the litres of non business use fuel from total fuel acquired to determine the suitable litres
Percentage use calculation method
– Relies upon a consistent usage pattern over time.
– Businesses must maintain a detailed record of fuel usage for at least 12 weeks (using either constructive or the deductive basic methods)
– Separate percentages are calculated for activities entitled to different fuel tax credit rates
– The percentage method can be used for five years provided the pattern of use remains reasonable the same. And the fuel tax credit entitlement is less than $10,000 in any financial year.
Small claimants method
– Small business operators or taxpayers that only use a small scale of eligible fuel may estimate the fuel tax credit using the small claimants method.
– However, the estimate must be reasonable and the claimant must be able to demonstrate how the estimate was established.