This is additional to the end of the temporary halving of the fuel excise for petrol and diesel, from 44.2 cents/litre to 22.1 cents.
For businesses entitled to claim FTCs, this will impact their September 2022 activity statement, as the FTC rates will change for the last two days of the period.
Generally, GST-registered businesses are entitled to a credit for most types of fuels including for vehicles and certain non-vehicle uses, such as for plant and machinery. Exclusions include aviation fuel and fuel used by vehicles weighing 4.5 tonnes or less travelling on public roads.
The exclusion means, for example, that no credit is available for fuel used by an ordinary car travelling on public roads. However, a credit is available for fuel used by such vehicles when off a public road.
After the benefit of the FTC, the remainder fuel excise borne is referred to as the Road User Charge (RUC). There are two broad categories of fuel use: 1) Vehicles >4.5 tonnes used on public roads, and 2) All other eligible business use. The first category has a partial or nil FTC, and thus there is a RUC impost. The second category has a full FTC, and thus the RUC impost is nil.
In line with the temporary halving of fuel excise rates coming to an end from 29 September, FTC rates will also return to normal levels. There was also the usual indexation of the rates during this period, with effect from 1 August. Here is a summary of the changes for the main types of fuels used.
Businesses using petrol and diesel in heavy vehicles on public roads will experienced three different per-litre RUC net impost amounts during the March-September period – 22.1 cents, 23.0 cents, and increasing to 27.2 cents from 29 September 2022.
No FTC is available for other types of fuels, and so the fuel excise amount itself is the RUC impost borne. Thus, the end of the temporary halving of the fuel excise rates means the per-litre RUC impost will rise from 29 September. Specifically, the RUC impost will increase from 7.5 cents to 15.0 cents for LPG, and from 15.8 cents to 31.5 cents for LNG/CNG.
Other eligible business fuel uses include for plant and machinery, and off-public road travel by vehicles of any weight (tractors, regular cars on farms and mine sites, as well as vehicles >4.5 tonnes). This category also includes the portion of fuel used by a >4.5 tonne vehicle for auxiliary power (powering refrigeration) while travelling on a public road.
The FTC rate here is equal to the fuel excise rate, leaving a RUC impost of nil. The FTC rates will increase to match the back-to-normal fuel excise rates. Accordingly, the RUC impost remains unchanged at nil.
The change in FTC rates takes effect for the last two days of the September activity statement period (29 and 30 September). This comes after the change in rates from 1 August. Accordingly, monthly lodgers will have two sets of FTC rates to contend with, whereas quarterly lodgers will have three sets of FTC rates covered by the one activity statement.
The correct FTC rates are determined by the day on which you acquire the fuel (to match the fuel excise included). Accordingly, it is important to correctly distinguish fuel acquired up to 31 July, 1 August to 28 September, and on 29 and 30 September, as the FTC rates will be different per the above table. The change in FTC rates for those last two days is significant, and so correct cut-off is important for any business that acquires significant quantities of fuel.
More broadly, a number of GPS-based software applications are available to efficiently capture fuel use data and document FTC supporting calculations.
