Fuel tax credits provide businesses with a credit for the tax included in the price of fuel used for certain activities. The tax credits are reported in an entities Business Activity Statements (BAS). Fuel tax credits apply to fuel used for:

  • Machinery
  • Plant
  • Equipment
  • Heavy vehicles (gross vehicle mass above 4.5 tonnes)
  • Light vehicles travelling off public roads or on private roads.

To calculate the fuel tax credit amount on each BAS, you multiply the litres of fuel purchased in the relevant period by the current ATO-specified rate. The rate is determined by several factors, including the type of fuel, when the fuel was acquired and what it is used for. Rates for calculating the credits are updated regularly, so it is advised that you check the rates every time you lodge a BAS.


To be eligible for the credits, you must:

  • Be registered for GST when you acquired the fuel
  • Be registered for fuel tax credits at the time you lodge the BAS.

In order to claim fuel tax credits, your business must purchase fuel to be able to produce income (this excludes general transport). Some examples of industries that claim fuel tax credits include:

  • Road transport businesses
  • Mining (machinery, generators)
  • Fishing
  • Agriculture
  • Construction
  • Non-fuel uses such as:
    • Fuel used to clean machinery
    • Diesel sprayed onto road as sealant
    • Fuel used as an ingredient for production (paints, ink)

Fuel tax credits are classified as assessable income, so it is important to declare them in your tax return.

If you are still unsure about whether your business is eligible to claim fuel tax credits, see the link below for further information:


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Author: Caleb Datson
Email: caleb@faj.com.au