What Are Fuel Tax Credits?
Fuel tax credits (FTC) allow registered businesses to claim back the fuel excise embedded in the price of diesel, petrol, and other fuels used in eligible business activities. The ATO administers FTC — it is claimed on your BAS and reduces your net tax payable (or increases your refund). For businesses with significant fuel use, FTC can be worth tens of thousands of dollars per year.
FTC exists because the fuel excise is intended to fund roads used by light vehicles — heavy vehicles and off-road machinery do not benefit from roads in the same way, so the excise is refunded for those uses. It is not a concession or special exemption — it is the correct tax treatment for business fuel use that does not contribute to road wear.
Which Fuel Uses Are Eligible?
| Fuel Use | FTC Eligible? | Rate (approx.) |
|---|---|---|
| Off-road plant & equipment (excavators, generators, pumps, forklifts) | ✅ Yes | Full off-road rate (~49c/L) |
| Agricultural equipment (tractors, harvesters, irrigation) | ✅ Yes | Full off-road rate (~49c/L) |
| Mining equipment and stationary engines | ✅ Yes | Full off-road rate (~49c/L) |
| Vessels (fishing boats, commercial marine) | ✅ Yes | Full off-road rate (~49c/L) |
| Heavy vehicles over 4.5t GVM on public roads | ✅ Yes (reduced) | Lower rate (~16–19c/L after Road User Charge deduction) |
| Light vehicles under 4.5t GVM on public roads | ❌ No | 0 |
| Private/personal vehicle use | ❌ No | 0 |
| Fuel used in vehicles not registered for business | ❌ No | 0 |
How the Indian CA Team Calculates and Claims FTC
The process is straightforward once fuel records are provided correctly:
- Receive fuel purchase records — fuel card statements (BP Plus, Caltex StarCard, Shell Card, Ampol Fuel Card), supplier invoices, or petrol receipts for the quarter
- Split eligible vs ineligible — identify which litres are off-road use, which are heavy vehicle on-road, and which are light vehicle (ineligible). Fuel card statements often include vehicle registration, making this split straightforward
- Apply ATO rate for the period — FTC rates change quarterly (February, May, August, November). The Indian team uses the rate applicable to the date the fuel was purchased, not the BAS lodgement date
- Calculate FTC amount — eligible litres × applicable rate per litre
- Enter on BAS Label 7D — FTC is entered on Label 7D of the BAS. It reduces your net GST/tax payable
- Maintain records — FTC workpapers showing eligible litres, rate applied, and calculation are kept for ATO record-keeping requirements (5 years)
Most commonly missed: Many Australian small businesses with excavators, generators, or farm equipment are not claiming FTC at all — or are claiming it incorrectly. If your business uses any off-road equipment, ask your current bookkeeper to confirm FTC is being claimed on every BAS. If it isn't, back-claims for up to 4 years can be lodged.
Industries That Benefit Most
- Mining and resources — generators, haul trucks (off-road), processing equipment. Some large mining operations claim hundreds of thousands per year in FTC
- Agriculture and farming — tractors, harvesters, irrigation pumps, grain augers. Every litre of diesel in off-road farm equipment is fully claimable
- Construction — excavators, bulldozers, cranes, concrete mixer trucks (if over 4.5t), generators on site. See our construction bookkeeping guide
- Transport and logistics — heavy vehicles over 4.5t GVM. Truck fleets claim FTC at the on-road heavy vehicle rate after the Road User Charge deduction
- Commercial fishing — all vessel fuel is eligible at the full off-road rate
- Forestry and timber — harvesting equipment, log trucks (if over 4.5t)
What to Give Your Indian Bookkeeper Each Quarter
- Fuel card statements for all fleet cards — most providers give litres per transaction and vehicle registration
- Any bulk fuel receipts (on-site diesel tanks) — with a log of what equipment the fuel went into
- A simple split if you use mixed vehicles: "Ute = road only, excavator = off-road only, truck = road, heavy (over 4.5t)"
- If you use an apportionment method for mixed-use vehicles (e.g. a vehicle that does both on-road and off-road), provide the percentage split or odometer records
The Indian team handles the calculation from there. FTC workpapers are retained alongside your BAS records. See our full BAS preparation outsourcing guide for how the broader BAS process works.
About This Article
Written by Sharma Jyoti, CA (ICAI) — Founder, Sharma Jyoti and Co. We are an ICAI-registered Chartered Accountant firm providing outsourced bookkeeping and accounting services to Australian, US, UK and Canadian businesses. Learn more about our firm →
Written by Sharma Jyoti, CA (ICAI) — Founder, Sharma Jyoti and Co. We are an ICAI-registered Chartered Accountant firm providing outsourced bookkeeping and accounting services to Australian, US, UK and Canadian businesses. Learn more about our firm →
Related Reading
Frequently Asked Questions
Yes. FTC is claimed on BAS Label 7D as part of standard BAS preparation. The Indian team identifies eligible fuel use from your records, applies the correct ATO rate for the period (rates updated quarterly), and calculates the claimable amount. You provide fuel card statements or purchase records split by use — the Indian team handles the calculation and BAS entry.
Off-road equipment (excavators, generators, agricultural machinery, marine vessels) at the full rate (~49c/L). Heavy vehicles over 4.5t GVM on public roads at the lower rate (~16–19c/L after Road User Charge). Light vehicles under 4.5t on public roads: not eligible. Private use: not eligible.
Rates are updated quarterly by the ATO. As at 2026, the off-road rate is approximately 49 cents per litre. Heavy vehicle on-road is approximately 16–19 cents per litre (varies by fuel type). Always use the rate applicable to the date of fuel purchase, not the BAS lodgement date. The ATO publishes the current rates at ato.gov.au/fuel-schemes.
Yes. You can amend BAS returns and claim FTC for up to 4 years. If your Indian bookkeeper discovers FTC has not been claimed previously, they prepare amended BAS returns for the eligible periods. The ATO processes amended BAS claims and refunds the FTC — with interest if the original BAS was lodged on time and the amendment increases a refund.
No separate registration is needed. You must be registered for GST (turnover over A$75,000, or voluntarily registered). FTC is claimed directly on your BAS each quarter. If your annual FTC claim will exceed A$10,000, you can apply to claim monthly instead of quarterly for better cash flow.