During your business activities, you may have used:
- both eligible and ineligible fuels
- fuel in different activities that have different fuel tax credit rates
- fuel in some business activities that are eligible, and in some activities that aren’t.
To work out how much you can claim, you need to apportion the fuel based on eligible and ineligible uses and different fuel tax credit rates. You can use any apportionment method considered fair and reasonable for your circumstances.
Commonly used apportionment methods are the:
- constructive method
- deductive method
- percentage use method
- estimated use method.
You should exclude any fuel:
- that is not eligible – for example, where excise or customs duty is not payable on the fuel
- used in an activity that is not eligible – for example, light vehicles travelling on public roads
- if the fuel tax credits have already been claimed earlier in the supply chain – for example, they were claimed by the packager of the fuel
- used for private purposes
- you acquired but didn't use because it was lost, stolen or otherwise disposed of.
The easiest way to get your claims right when apportioning fuel tax credits is to use:
- the ATO simplified methods (where applicable) which may help you claim more fuel tax credits, make your calculations easier, and reduce record-keeping requirements
- results from a Global Positioning System (GPS) or telematics technology product that has a current Product or Class Ruling and where the results have not been distorted or altered.
If you’re a business that is covered by a Product Ruling for the GPS or telematics technology product then the ruling will provide you with certainty, regardless of the size of the claim, provided you use the product as set out in the product ruling and you have the documentary evidence to support any fuel tax credit claim.
A Class Ruling on a GPS or telematics technology product is limited in scope and only relates to whether the report can be used as a record (but not the only record) for record keeping purposes.
There are a number of GPS and telematic providers in the market that have approved Product or Class Rulings. The ATO legal database has a list of Product and Class Rulings. Also review Taxpayer Alert TA 2021/3.
