Company leads industry resistance to being soft touch for charges
Linfox is back at the tax well again, this time to challenge the amount the company loses in tolls and can regain from fuel credits.
As foreshadowed 18 months ago by International tax advisory company Deloitte, which is leading the case with Linfox as the lead litigant, a test case has now been launched to clarify the term ‘public road’ in the Fuel Tax Act 2006 to ensure the correct number of fuel tax credits on fuel used for business activity is being claimed.
The Federal Court case is expected to clarify the meaning of “public road” within the Act and will shine a light on legal grey areas between government and infrastructure operators such as Transurban.
Lindsay Fox
The issue of the increasing tolls burden has exercised the mind of company founder Lindsay Fox, who railed against the increasing tolls burden trucking has been saddled with, particularly in Melbourne, and industry peak bodies such as the Australian Trucking Association (ATA) and the Victorian Transport Association (VTA).
Linfox notes that test case is limited to a challenge on a very narrow area of the legislation, section 43-10(3) of the Fuel Tax Act 2006, which states: “To the extent you acquire… fuel to use, in a vehicle, for travelling on a public road, the amount of your fuel tax credit is reduced by the amount of the road user charge for the fuel.”
Public road
The term ‘public road’ is not defined in the Act and is critical to the application of the road user charge which is used to fund government repairs to public highways.
“Currently a Linfox truck travelling on a toll road pays the road user charge for this journey even though toll road repairs are not funded by the government,” the company states.
“The Commissioner of Taxation takes the view that a toll road is a public road for the purposes of applying the road user charge. Linfox estimates that 10 per cent of its journeys use a toll road.
“We have worked with the Commissioner of Taxation on this issue. In these discussions it was agreed that a court judgement would be the best way to clarify this issue.
“To illustrate our case, Linfox is contending that the M2 toll road in New South Wales does not meet the description ‘public road’ and therefore we have been incorrectly reducing the amount of fuel tax credits we have been entitled to through applying the road user charge.
“If successful, we will be entitled to seek a refund of any fuel tax credits that have been under-claimed. The decision would also mean that any other taxpayers using fuel on any roads that do not meet the term ‘public road’ would also be eligible for refunds.”
Fuel tax win
Earlier this decade, Linfox won a challenge on whether the amount of the fuel tax credit for fuel acquired for use in a heavy vehicle refrigeration unit is reduced by the road user charge.
ATN has sought clarification on aspects of the case from the Australian Taxation Office (ATO) and Linfox.