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Fuel tax credit provisions explored in Full Federal Court case

Full Federal Court decides fuel tax credit case

The Full Federal Court delivered its judgment on 21 August 2019 in Linfox Australia Pty Ltd v Commissioner of Taxation.


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The case explored some critical aspects of interpretation of the fuel tax credit (FTC) provisions in addition to the entitlement to fuel tax credits for tax periods older than 4 years.

The first issue considered by the Court was whether the road user charge (applied by virtue of subsection 43-10(3) of the Fuel Tax Act 2006) applied to fuel acquired by Linfox for use in vehicles that had travelled on certain toll roads. The critical question for the Court in resolving this issue was whether a toll road, maintained and operated by a private operator for the purpose of making a profit, qualified as a ‘public road’ within the meaning of subsection 43-10(3).

As at July 2012, subsection 43-10(3) read as follows:

“To the extent that you acquire… taxable fuel to use, in a vehicle, for travelling on a public road, the *amount of your fuel tax credit for the fuel is reduced by the amount of the road user charge for the fuel.”

As there is no definition of public road in the Fuel Tax Act - the judgment delves into both parties’ submissions about the context and purpose of the provisions – particularly the submission that the road user charge is really about recognising and compensating the need for maintenance of public road surfaces. The argument was advanced by Linfox that toll roads did not qualify as ‘public roads’ because the toll roads were privately maintained by the toll operators. The Court found in favour of the Commissioner that the toll roads qualified as ‘public roads’ because the concept of a ‘public road’ was focussed on the public’s capacity or entitlement to use the road – rather than on whether the road was maintained by Government or privately (as may be the case for toll roads).

The second issue determined by the Court related to the entitlement to fuel tax credits for tax periods older than 4 years.

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