This was the subject of a recent test case – Linfox v Commissioner of Taxation – considered by the Administrative Appeals Tribunal. Mark Richmond SC, instructed by Deloitte, acted for Linfox.
The case will determine whether trucking operators can claim, using current rates, 38.143 cents per litre in fuel tax credits on the fuel used to run fridge plants on trailers or 15.043 cents per litre (decreasing from July 1 to 12.643 cents per litre).
“The taxpayer argued that the road user charge should not apply because the fuel is used for refrigeration, said Peter Gibson, an indirect tax consultant at Deloitte. “The Tax Office argued that all fuel used in any ‘vehicle’, which they said includes the trailer, that travels on a public road is subject to the road user charge.
“The taxpayer’s argument is consistent with the fact that the road user charge calculation conducted by the National Transport Commission in order for the transport minister to set the rate does not include fuel used in refrigeration units.
“If the Tax Office is correct, it produces the odd result that a refrigerated trailer operator would, at least in theory, be paying for more wear and tear on public roads than a non-refrigerated trailer operator. It also means that a refrigerated reefer would be entitled to a higher level of fuel tax credits than a refrigerated trailer only because the former is not classed as a ‘vehicle’, even though they perform the same role.
“The decision is expected in August or September. Any trucking business with fuel tax credits in respect of fuel used in refrigerated trailers should ensure they have protected their rights to secure a refund in the event that Linfox succeeds.
“There are four year time limits that apply, and therefore your position needs to be protected on or before June 30 in order to protect the period June 2008 on,” Peter Gibson advised.
Trucking businesses that operate refrigerated trailers should talk to their tax adviser about the implications of the case or contact Peter Gibson at Deloitte on 0418 448 100.