Fuel tax credits on your BAS give eligible businesses back the fuel tax (excise or customs duty) built into the price of fuel used in machinery, plant, equipment, heavy vehicles over 4.5 tonnes GVM, and light vehicles driven off public roads. You must be registered for GST and fuel tax credits, and you claim the dollar amount at label 7D on your business activity statement (BAS). Fuel for a ute or car on public roads doesn't count.
That last line trips up a lot of tradies. Fuel tax credits are real money, but plenty of owners either skip 7D (leaving cash on the table) or guess (and risk paying it back with interest). Here's who can claim, what belongs at 7D, the shortcuts for smaller claims, and the records that keep you safe.
If your July–September 2026 BAS is on your desk right now, there's a timely wrinkle too: fuel tax credit rates usually change in February and August, so this quarter straddles a rate change. We'll cover the simple way to handle that.
What are fuel tax credits?
Fuel tax credits, in one line: a credit from the ATO for the fuel tax included in the price of fuel you use in your business, claimed on your BAS alongside your GST.
Part of every litre's pump price is fuel tax. The ATO's fuel tax credits overview lists the uses that generally qualify:
- machinery
- plant
- equipment
- heavy vehicles
- light vehicles travelling off public roads or on private roads.
How much you get back depends on three things: when you acquired the fuel, what fuel it is, and the activity you used it in.
Fuel tax credits are not the same as GST credits
When you buy business fuel you usually claim the GST on it as a normal GST credit. A fuel tax credit is a separate claim for the excise inside the price. Same docket, two different credits, two different spots on the BAS.
Who can claim fuel tax credits?
According to the ATO's registration guidance, you need to be registered for both GST and fuel tax credits before you can claim. A few details matter:
- You can only claim for fuel acquired while you were registered (or required to be registered) for GST.
- If you're already registered for GST, you can add a fuel tax credit registration at any time without changing your GST reporting cycle.
- When you register, you choose a start date, and you can generally only go back for fuel acquired within the last four years.
- Cancelling your GST registration also cancels your fuel tax credit registration.
If you pay GST by instalments (the IAS route), registering for fuel tax credits changes things: the ATO says you'll stop receiving instalment notices and get a quarterly BAS instead. Worth knowing before you register. Our guide to IAS vs BAS explains the difference.
What fuel use is eligible (and what isn't)?
This is the heart of it. Think in terms of vehicle size and where the fuel is burned.
Light vehicles (4.5 tonnes GVM or less)
- On public roads: not eligible. Your ute, van or car driving between jobs doesn't attract fuel tax credits, even when the trip is 100% business.
- Off public roads or on private roads: eligible. Fuel used by a light vehicle on a work site, farm, mine site or private road for your business can qualify.
Heavy vehicles (more than 4.5 tonnes GVM)
The ATO's road transport page explains that heavy vehicles used in carrying on a business can claim for travel on public roads, but at a lower rate because the road user charge is taken off. Some points to check:
- GVM is set by the authority that registered the vehicle. Diesel vehicles acquired before 1 July 2006 can be equal to 4.5 tonnes.
- Heavy diesel vehicles manufactured before 1 January 1996 may need to meet an environmental criterion.
- Fuel used off public roads, or to power auxiliary equipment on the vehicle (think a truck-mounted crane or refrigeration unit), is claimed at a different rate from on-road travel.
Machinery, plant and equipment
Fuel used in business plant and equipment, such as excavators, bobcats, generators, compressors, ride-on mowers and similar gear, generally falls under the "all other business uses" category. For landscapers, earthmovers, builders and farmers, this is often where the bulk of the claim sits.
What's not eligible
The ATO's ineligible fuels and activities list includes:
- fuel used in light vehicles of 4.5 tonnes GVM or less on public roads
- fuel used for private purposes
- aviation fuels
- additives such as diesel exhaust fluid (AdBlue-type products), because no excise is paid on them
- transport gaseous fuels used in heavy vehicles on public roads
- fuel that was lost, stolen or otherwise disposed of rather than used.
How to work out your fuel tax credit claim
The ATO's working out your fuel tax credits page sets it out in three steps:
- Work out the eligible quantity. How many litres did you acquire for each eligible activity? Use a fair and reasonable apportionment method if a machine or vehicle does both eligible and ineligible work.
- Check which rate applies. Use the rate that applied when you acquired the fuel, for that fuel type and activity. Rates change regularly, so check the current rates on the ATO site (or use the ATO's fuel tax credit calculator) every time you do your BAS.
- Work out the amount. Multiply litres by the rate (in cents per litre) and divide by 100 to get dollars. Add each activity's amount together and claim the whole dollar amount at 7D. No cents.
Timing: which BAS does the claim go on?
The ATO's BAS label instructions tie timing to your GST accounting method:
- Cash basis: claim in the BAS period you pay for the fuel.
- Non-cash (accruals) basis: claim in the BAS period you receive the fuel invoice.
Want someone to check your 7D figure before you lodge? Girl Friday is a registered BAS agent and prepares and lodges BAS and IAS from $180 per quarter, including fuel tax credits where they apply. Get a free quote or book a discovery call.
The simplified methods for claims under $10,000 a year
Most small businesses aren't claiming huge amounts, and the ATO has made life easier for them. If you claim less than $10,000 in fuel tax credits a year, the ATO's simplified fuel tax credits page lets you use one or more of these shortcuts:
1. Use the rate at the end of the BAS period
When a rate changes mid-quarter (for example, in August), you don't need to split your fuel purchases across two rates. Total your eligible litres for the period and use the rate current on the last day of the BAS period. For a July–September quarter, that means the rate in force on 30 September.
2. Work out your litres from dollars
If your dockets don't show litres, you can estimate: litres = total cost of fuel purchased in the period ÷ average price of fuel for the period.
3. Basic method for heavy vehicles
For diesel heavy vehicles that run both on and off public roads, you only need the public-road distance and the eligible diesel acquired for the period. Public-road litres are worked out from kilometres and a set consumption rate; the rest is treated as off-road and claimed at the "all other business uses" rate.
4. Simplified record keeping
For smaller claims, the ATO accepts records that only show dollar amounts, such as bank or card statements, fuel supplier statements, contractor statements, or point-of-sale dockets where the litres aren't itemised or are illegible. You still need to be able to show the fuel was used in your business (for example, by reference to the vehicles and equipment you run).
How to fill in labels 7D and 7C on your BAS
Per the ATO's completing your BAS guidance:
- 7D (fuel tax credit): your credits for the period, plus any adjustments that increase your entitlement. If you have nothing to report, enter 0. Don't leave it blank.
- 7C (fuel tax credit overclaim): only for adjustments that decrease your entitlement, such as fuel you claimed that was later sold, lost or used for a lower-rate purpose. Enter 0 if nothing applies.
Two more things worth knowing:
- Fuel tax credits can only be claimed on a BAS, not on an annual GST return.
- In most setups your accounting software won't work out the 7D figure from your fuel bills. Coding a fuel receipt to "Motor vehicle" in Xero captures the GST, not the fuel tax credit. The 7D amount comes from a separate calculation that you (or your BAS agent) enter when preparing the activity statement. Our step-by-step guide to preparing your BAS in Xero shows where that fits.
Missed fuel tax credits? You can usually still claim
If you've never claimed, or you've been under-claiming, there's good news. The ATO says you generally have four years to claim a fuel tax credit you haven't claimed before. The clock starts the day after the BAS for that period was due. Errors and missed amounts can often be picked up as adjustments on a later BAS, using the rate that applied when you acquired the fuel.
A backdated claim needs the same records as a current one, so don't go back on a guess.
Records to keep for fuel tax credits
The ATO's records you need to keep page says records must show the fuel you acquired, how you used it in the business, and how you calculated the claim. Keep them for five years (some for longer). Useful records include:
- tax invoices, fuel card statements and supplier statements
- contracts or job records showing the activity the fuel was used in
- logbooks or GPS data for heavy vehicles that run on and off public roads
- your calculation worksheets or saved results from the ATO fuel tax credit calculator
- notes on your apportionment method for mixed-use equipment.
Without adequate records you may have to repay some or all of the credits, plus penalties and interest. Clean bookkeeping is the cheapest insurance here.
Common fuel tax credit mistakes we see
- Claiming for the ute. Light vehicles on public roads aren't eligible, no matter how business-only the trip.
- Using one rate for everything. On-road heavy vehicle use, auxiliary equipment and off-road plant usually have different rates.
- Forgetting the rate change. If you're over $10,000 a year, you need to split purchases either side of a February or August change.
- Two parties claiming the same fuel. Only one entity can claim. With hire or subcontract arrangements, the ATO says the claim belongs to whoever acquired and used the fuel in their business, so put fuel arrangements in writing.
Who this is for, and when to call a tax agent
This guide is for tradies, landscapers, earthmovers, builders, farmers, transport operators and any business running plant, generators or heavy vehicles. A registered BAS agent like Girl Friday can work out and lodge your fuel tax credits as part of your BAS, because fuel tax credits are claimed through the activity statement.
How your fuel costs and fuel tax credits are treated in your income tax return is a different question. For that, and for anything involving business structure or tax planning, speak to your tax agent or accountant. If you need a hand with returns, our tax page covers what we offer.
Frequently asked questions
Can I claim fuel tax credits for my ute?
Not for driving on public roads. Most utes are light vehicles (4.5 tonnes GVM or less), which aren't eligible on public roads. Business use off public roads or on private roads, like a work site or farm, can be eligible.
What BAS label are fuel tax credits claimed at?
Label 7D, in whole dollars. Label 7C is only for reducing a credit you've overclaimed. If you have nothing to report at either label, enter 0.
Do I need to be registered for GST to claim fuel tax credits?
Yes. You need both GST and fuel tax credit registrations, and you can only claim for fuel acquired while registered (or required to be registered) for GST.
How far back can I claim unclaimed fuel tax credits?
Generally four years, starting the day after the BAS for that period was due. You'll need records to support any backdated claim.
What if the fuel tax credit rate changes during my BAS quarter?
If you claim less than $10,000 a year, you can use the rate that applies on the last day of the BAS period for all your litres. If you claim more, use the rate that applied when you acquired each lot of fuel.
Can a BAS agent claim fuel tax credits for me?
Yes. A registered BAS agent can calculate your fuel tax credits and include them on the BAS they prepare and lodge for you. Questions about your income tax return are for your tax agent or accountant.
Let us take the guesswork out of 7D
Fuel tax credits reward tidy records and the right rate for the right job. If that's one more thing on your plate, hand it over. Girl Friday Australia is a registered BAS agent, a Xero Certified Advisor and a Xero Gold Partner, working 100% remotely with small businesses Australia-wide. No lock-in contracts, no jargon and no judgement if your fuel dockets are in a shoebox.
Get your free quote or start the conversation. You can also call 0404 877 436 or email info@girlfridayaustralia.com. Want the full picture? See our BAS & IAS lodgement and bookkeeping services, or check when your next lodgement is due in our BAS due dates 2026–27 guide.