Businesses are entitled to claim tax credits based on the set rates on the fuel which is bought, produced, or imported for business use. This credit is called Fuel Tax Credit (FTC) which is available only on the fuel which is used in machinery, equipment, heavy vehicles (with GVM* of more than 4.5 tons), plant, and light vehicles driven on private roads only.
*GVM: Gross Vehicle Mass
Requirements To Claim FTC:
Only GST registered businesses who also register for FTC are allowed to claim FTC on their BAS.
Moreover, the time that fuel is acquired must be taken into consideration because only the purchased or manufactured fuel from the last four years from the claim are subject to FTC.
Having all these conditions, it is still important and necessary to check your eligibility via FTC entitlement tool.
You can register for FTC via registered tax agents, calling to ATO, or submitting FTC registration form (NAT 2954) to ATO.
Same ways used for registration is available to cancel FTC with the difference of filling up form NAT 2955 and lodge it with ATO.
Variables such as fuel consumption timing, fuel type, and usage purpose determine the applicable FTC rates. In addition, the rates are not taken to be granted since government adjust FTC rates with one of the economic variables, consumer price index (CPI), every February and August.
The FTC rates can be checked here.
Since FTC rates are subject to many modifications, we suggest calculating your FTC amounts by either consulting with a registered tax agent or use the online calculator.
Upon calculation of FTC, part 7D of your BAS must be filled up with this amount. All changes to FTC must be recorded in part 7C of your BAS to reverse your extra FTC amount claimed before.
The cases in which FTC is over claimed is when the fuel is purchased by a third party before consumption or the fuel is used for other usages which are not listed in FTC requirements.
Businesses with FTC less than $10,000 per annum are allowed to use the following two ways to ease their FTC calculation:
Note: It is highly important to keep sufficient records related to fuel so as to present it whenever required by ATO.