Rajan Wilcox
The diesel refund system was implemented in 2000 to provide full or partial relief for the general fuel levy and the RAF levy to primary sectors, including farming, forestry, fishing, and mining. Qualifying entities that carry out eligible activities and are registered for VAT purposes may apply for registration for the diesel refund. The claim for a diesel refund is made using the VAT 201 return, and the refund claim will be offset against any VAT liability payable for the tax period. The diesel refund system allows for a refund of all or part of the fuel levies and the RAF levy (Road Accident Fund) for producers in certain sectors.
| Characteristics | Values |
|---|---|
| Country | South Africa |
| Administering Body | South African Revenue Service (SARS) |
| Applicable Entities | Qualifying entities carrying on eligible activities in specific sectors and industries, including farming, forestry, fishing, and mining |
| Registration | Required for VAT purposes under the Value-Added Tax Act, No. 89 of 1991 |
| Forms | VAT101D (Application for registration of diesel refund), VAT102D (for branches of qualifying entities) |
| Refund Calculation | SE-DSL-02 (Manage Diesel Refund Calculations – External Policy) |
| Applicable Levy | RAF levy (Road Accident Fund) |
| Refund Percentage | 80% of the RAF levy |
| Refund System Implementation | 2000 |
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What You'll Learn
Diesel refunds for primary production
The South African government implemented the diesel refund system in 2000 to provide full or partial relief for the general fuel levy and the RAF (Road Accident Fund) levy to primary sectors. The refund system is in place for the farming, forestry, fishing, and mining sectors.
In 2023, due to the electricity crisis, the refund was extended to manufacturers of foodstuffs. This relief was implemented to limit the impact of power cuts on food prices. The refund for manufacturers of foodstuffs is set at 80% of the RAF levy for diesel purchased for use in the manufacturing process and will be in place for two years, from 1 April 2023 to 31 March 2025.
The diesel refund scheme is governed by the Customs and Excise Act No. 91 of 1964 and Schedule No. 6 (Note 6 in Part 3). The administration of the scheme is through the VAT (Value Added Tax) system, which requires an entity or person to be registered for VAT. Qualifying entities that carry on eligible activities and are registered for VAT purposes may apply for registration for the diesel refund by completing and submitting a VAT 101D form.
The claim for a diesel refund is made using the VAT 201 return. A diesel refund claim will be offset against any VAT liability that is payable for the tax period concerned, or it will increase any VAT refund that is due to the vendor. Any diesel refund claim of fuel levy and RAF levy must be submitted within two years from the date of purchase of the diesel. All relevant documentation relating to diesel purchases, as well as logbook entries or other records indicating the actual amounts of diesel purchased and used for eligible and non-eligible use during the tax period, must be retained for a period of 5 years from the date of use or disposal of the distillate fuel or the refund return, whichever is later.
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Diesel refund application
The process for applying for a diesel refund varies depending on the region.
The California Department of Tax and Fee Administration provides guidelines for diesel refund claims. The Revenue & Taxation Code (R&TC) section 60501 (a)(4)(A) allows for a refund for taxes paid on diesel fuel used for purposes other than operating motor vehicles on public highways in California.
To file a diesel fuel refund claim, you must register for a diesel fuel user account through their online services webpage. You will then need to submit the CDTFA-32, Diesel Fuel Tax Claim for Refund Questionnaire and Equipment List. An updated diesel questionnaire should be submitted every three years, and you can update your equipment list at any time.
The South African Revenue Service (SARS) administers the diesel refund system, which provides full or partial relief for the general fuel levy and the RAF (Road Accident Fund) levy to specific sectors, including farming, forestry, fishing, and mining.
To apply for the diesel refund, qualifying entities must be registered for VAT purposes and complete the VAT101D form (Application for Registration of Diesel Refund). Branches of qualifying entities must complete the VAT102D form. The diesel refund claim is made using the VAT 201 return, and any refund claim must be submitted within two years from the date of purchase of the diesel.
In Australia, there is a fuel tax credit scheme in place, with rates indexed twice a year, in February and August. The scheme provides tax credits for businesses using fuel, including diesel, and the rates vary for different types of fuel.
While I cannot provide the exact application process for Australia, it is recommended that you refer to the official government website for the most up-to-date and accurate information.
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Diesel refund calculation
The diesel refund calculation and eligibility criteria vary depending on the region and industry. Here is an overview of the process in different locations:
South Africa
The South African Revenue Service (SARS) administers the diesel refund system, which was implemented in 2000 to provide full or partial relief from the general fuel levy and the RAF (Road Accident Fund) levy for primary sectors. The refund is applicable to the farming, forestry, fishing, and mining sectors. Qualifying entities carrying out eligible activities and registered for VAT can apply for the diesel refund by completing a VAT101D form. Branches of these entities must complete a VAT102D form. The refund claim must be submitted within two years from the date of purchase of the diesel.
California, United States
In California, diesel fuel tax refund claims can be filed through the California Department of Tax and Fee Administration (CDTFA). The timeframe for filing a diesel fuel refund claim is generally within six months after the receipt of an invoice for tax. However, if the tax was not invoiced at the time of purchase, the claim should be filed within six months of receiving the invoice.
Diesel fuel exempt users, who purchase tax-paid diesel fuel and use it in a non-taxable manner, can register for a diesel fuel user account and submit a CDTFA-32 questionnaire and equipment list. This questionnaire only needs to be updated every three years, while the equipment list can be updated whenever there are changes. Diesel fuel exempt sellers must also register through the CDTFA's online services before filing claims for a refund of the tax paid on undyed diesel fuel.
Additionally, there are specific cases where tax-paid fuel credits may be allowed on the Supplier of Diesel Fuel Tax Return, instead of filing a separate claim for a refund. These include tax-paid fuel exported, sold to consulate officers or employees by credit card, removed from the rack when tax is paid twice, sold to train operators, and more.
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Diesel refund offset
The South African Revenue Service (SARS) implemented the diesel refund system in 2000 to provide full or partial relief for the general fuel levy and the RAF (Road Accident Fund) levy to primary sectors. The refund system is in place for the farming, forestry, fishing, and mining sectors.
Qualifying entities that carry out eligible activities in the aforementioned sectors and are registered for VAT purposes may apply for registration for the diesel refund. The application form for the registration of a diesel refund for qualifying entities is VAT101D, while for branches of qualifying entities, it is VAT102D.
The diesel refund claim will be offset against any VAT liability payable for the tax period concerned, or it will increase any VAT refund that is due to the vendor. The claim must be submitted within two years from the date of purchase of the diesel. All relevant documentation relating to diesel purchases, logbook entries, and other records indicating the actual amounts of diesel purchased and used for eligible and non-eligible use during the tax period must be retained for a period of five years from the date of use or disposal of the diesel.
The diesel refund scheme is administered through the VAT system, with refunds processed using the VAT201 return. The Customs and Excise Act No. 91 of 1964 and Schedule No. 6 (Note 6 in Part 3) govern the scheme.
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Diesel refund documentation
The documentation required for a diesel refund depends on the context and the region. Here is an overview of the documentation required for diesel refunds in different contexts:
South Africa
The South African Revenue Service (SARS) administers diesel refunds for primary production sectors, including farming, forestry, fishing, and mining. The diesel refund scheme is governed by the Customs and Excise Act No. 91 of 1964 and Schedule No. 6 (Note 6 in Part 3).
To apply for registration for the diesel refund in South Africa, qualifying entities must complete the following forms:
- VAT101D (Application for registration of diesel refund) for entities with eligible activities registered for VAT purposes.
- VAT102D – Application for Registration of Diesel Refund – External Form for branches of the qualifying entity.
Once registered, entities can claim a refund for the fuel levies and RAF (Road Accident Fund) through the VAT system by submitting VAT 201 returns. Claims for diesel refunds must be submitted within two years from the date of purchase of the diesel.
California, United States
In California, the California Department of Tax and Fee Administration (CDTFA) handles diesel refund claims. The documentation required depends on the specific circumstances and programs. Here are some general guidelines:
- For diesel fuel lost during handling, transportation, or storage, refer to Regulation 1433.
- For diesel fuel exported, refer to Regulation 1161 or Regulation 1430.
- For diesel fuel used in reefer units, provide documentation of the fuel placed in the unit and records of hour meter readings.
- For off-highway idle claims, refer to the "five-minute idle" rule.
- For diesel fuel consumed by auxiliary equipment, apply safe-harbor percentages or submit a specific fuel consumption test approved by the CDTFA.
It is important to refer to the specific regulations and guidelines provided by the CDTFA for detailed information on the documentation required for diesel refund claims in California.
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Frequently asked questions
The diesel refund system was implemented in 2000 to provide full or partial relief for the general fuel levy and the RAF levy to primary sectors.
The refund system is in place for the farming, forestry, fishing, and mining sectors.
Qualifying entities that carry on eligible activities and are registered for VAT purposes may apply for registration for the diesel refund by completing a VAT101D form.
