A fuel excise is charged to help fund road maintenance. The Fuel Tax Act 2007 provides businesses with a fuel tax credit (“FTC”) as reimbursement for fuel excise tax imposed on fuel when it is used in certain circumstances. This is not a subsidy or a handout – it is the refunding of an excise (a credit) as vehicles used off-road, should not be required to pay for road maintenance.
Depending on how the fuel is used, the business will be entitled to a full ($0.477/ Litre) or partial ($0.189/Litre) fuel tax credit.
There are certain scenarios where this entitlement does not apply (e.g. light vehicles used on a public road) and broadly, the entitlement to a fuel tax credit will be determined by whether fuel is consumed while ‘driving on a public road’ and whether the vehicle is a ‘heavy vehicle’ (GVM >4.5t).