Fuel Tax (Road User Charge—Gaseous Fuels) Determination 2021

Overview

The Fuel Tax Act 2006, enacted by the Parliament of Australia, was designed to address the gap in cost recovery for road construction and maintenance attributable to heavy vehicles. This was achieved through a combination of a fuel-based road user charge administered by the Commonwealth and registration charges collected by the states and territories. The Act provides a mechanism for the collection of the road user charge by reducing the fuel tax credit provided to eligible businesses and non-profit bodies that use heavy vehicles for business purposes. The Fuel Tax (Road User Charge—Gaseous Fuels) Determination 2021, issued under the authority of the Minister for Infrastructure, Transport and Regional Development, sets the rate of road user charge for taxable fuels at 35.3 cents per kilogram, reflecting a 2.5 per cent increase from the previous rate. This increase is a step towards achieving full cost recovery for heavy vehicle use on public roads, as determined by Infrastructure and Transport Ministers, following public consultation with industry stakeholders.

Scope and Application

The Fuel Tax Act 2006, supplemented by the Fuel Tax (Road User Charge—Gaseous Fuels) Determination 2021, governs the collection of road user charges from heavy vehicles with a gross vehicle mass exceeding 4.5 tonnes used on public roads for business purposes. This legislation aims to recover the portion of road construction and maintenance costs attributable to heavy vehicles through a combination of fuel-based road user charges collected by the Commonwealth and registration charges collected by states and territories. The Act applies to businesses registered or required to be registered for Goods and Services Tax and non-profit bodies, providing a partial fuel tax credit for fuel used on public roads for business purposes in registered vehicles with a gross mass over 4.5 tonnes. The fuel tax credit is equal to the amount of the effective fuel tax (excise) minus the road user charge, with the rates of road user charge determined by legislative instrument. The Determination sets the rate of road user charge at 35.3 cents per kilogram of fuel, a 2.5 per cent increase from the previous rate, and aligns with the broader objective of returning to cost recovery for heavy vehicle road expenditure. This legislative instrument is applicable nationally, covering all heavy vehicles meeting the specified criteria across Australia.

Key Provisions

The main operative sections of the Fuel Tax (Road User Charge—Gaseous Fuels) Determination 2021 are found under subsection 43-10(8) of the Fuel Tax Act 2006, which permits the Transport Minister to determine the rates of road user charge by legislative instrument. This Determination sets the rate of road user charge for taxable gaseous fuels used on public roads for business purposes in heavy vehicles, defined as those with a gross mass exceeding 4.5 tonnes. The Determination sets this rate at 35.3 cents per kilogram of fuel, reflecting a 2.5 per cent increase from the previous rate. This charge is designed to contribute to the recovery of road construction and maintenance costs attributable to heavy vehicles, with part of these costs being recovered by the Commonwealth and the other part by the states and territories through registration charges. The obligations and requirements imposed by this Determination on the parties it governs primarily concern businesses and non-profit bodies that use heavy vehicles for business purposes. These entities are required to account for the road user charge in their calculations of the fuel tax credit they are entitled to claim under Divisions 41 and 43 of the Fuel Tax Act 2006. The fuel tax credit is equal to the effective fuel tax (excise) payable on the fuel minus the road user charge. Given that the rate of road user charge is higher than the excise rates for certain gaseous fuels such as compressed natural gas and liquefied natural gas, the fuel tax credit for these fuels remains zero. Businesses and non-profit bodies must therefore ensure they correctly apply the road user charge in their financial and tax reporting to comply with the Act. The Determination also outlines potential consequences for non-compliance with the road user charge requirements. While specific offences and penalties are not detailed within the Determination itself, the broader legislative framework under the Fuel Tax Act 2006 and associated regulations typically includes provisions for penalties and enforcement measures. These may include fines, interest on unpaid charges, and legal action for non-payment or incorrect reporting of the road user charge. The exact penalties would be in accordance with the applicable tax and administrative laws, which could vary based on the severity and intent of the breach.