Date posted: 26/08/2019 3 min read

Linfox Australia v Commissioner of Taxation – fuel tax credit entitlement

This Full Federal Court case considers the applicability of the road user charge and whether the fuel tax credit entitlement ceases.

In brief

  • The Full Federal Court considered the applicability of the road user charge and the meaning of ‘public road’ under the Fuel Tax Act 2006 (Cth)
  • The Court’s decision in respect of whether the taxpayer ceased to be entitled to a fuel tax credit to the extent that it has not been taken into account in an assessment of a net fuel amount for a certain period may have wider implications for indirect taxes

In Linfox Australia Pty Ltd v Commissioner of Taxation of the Commonwealth of Australia [2019] FCAFC 131, the Full Federal Court considered two issues.

The first concerned whether a toll road operated and maintained by a private operator was a “public road” for the purposes of the road user charge in s43-10(3) of the Fuel Tax Act 2006 (Cth). 

The second issue was whether the inclusion of part of a fuel tax credit in an assessment of a net fuel amount results in the whole fuel tax credit being “taken into account, in an assessment of a net fuel amount of yours for the purposes of s47-5 of the Fuel Tax Act”.

The Court decided in favour of the taxpayer on the second issue but against the taxpayer on the first issue, thereby affirming the Commissioner’s objection decision.

Broadly under s47-5(1), you ceased to be entitled to a fuel tax credit to the extent that it has not been taken into account, in an assessment of a net fuel amount of yours, during the period of four years after the day on which you were required to give the Commissioner a return for the tax period to which the fuel tax credit would be attributable. 

The Court did not accept the Commissioner’s argument that the non-inclusion of amounts referable to the road user charge in the taxpayer’s BAS had the result that those amounts were not taken into account in an assessment. Put simply, it was enough that the amount of road user charge was considered in calculations in reaching the assessment of the net fuel amount.

Given the first issue was decided against the taxpayer, it was not necessary for the Full Federal Court to decide on the second issue. However, each party agreed that the Court should decide on the second issue and the Court said it may be of wider importance as bearing on the administration of the Fuel Tax Act or the indirect tax system more generally.

The CA ANZ Tax Team notes similar wording to section 47-5(1) is used under section 93-5 of the A New Tax System (Goods and Services Tax) Act 1999). Therefore, this decision may be of relevance in the situation where a taxpayer seeks to claim an additional input tax credit out of the four-year time limit period 

Related case information

Linfox Australia Pty Ltd v Commissioner of Taxation of the Commonwealth of Australia [2019] FCAFC 131

Read the decision

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