Coles sues ATO for $40 million for 'disappearing' fuel

The supermarket giant is suing the Australian Tax Office for $40 million. Source: AAP

Aussie supermarket giant Coles is suing the Tax Office for $40 million, claiming it was forced to pay an upfront fuel excise on millions of litres of non-existent fuel.

Coles claims that between 2014 and 2017 it paid tax on about 107 million litres of fuel which was lost through evaporation or leakage before it could be sold to customers at its chain of Coles Express service stations, Fairfax reports.

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Over five Court applications filed last month, Coles argued that because the fuel was never sold, it should be eligible for fuel tax credits worth approximately $40 million.

A Coles spokesman said the company was “seeking clarification from the court as to whether it has overpaid fuel excise in the past, in particular in relation to fuel volumes that have been subject to leakage and evaporation”.

The move comes as Coles prepares to separate from parent company Wesfarmers later this month, with an expected value that will make it one of the biggest companies on the ASX.

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An initial hearing on the case is set for December 14, with Coles set to save millions if it is successful.