ATO Interpretative Decision
ATO ID 2003/1167
Excise
Energy Grants (Credits) Scheme: production of fuels for own useFOI status: may be released
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Status of this decision: Decision Current
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Has an entity who produces an 'on-road alternative fuel' and 'off-road diesel fuel' for use by them 'purchased' the fuel for the purposes of sections 42, 43, 44, 45, 46, 47 and 53 of the Energy Grants (Credits) Scheme Act 2003 (EGCSA)?
Decision
No. An entity who produces an 'on-road alternative fuel' or 'off-road diesel fuel' for use by them has not 'purchased' the fuel for the purposes of sections 42, 43, 44, 45, 46 47 and 53 of the EGCSA.
Facts
An entity is a primary producer who grows and harvests crops from which they extract vegetable oil. They then:
- (a)
- process the vegetable oil to produce biodiesel which is an on-road alternative fuel for the purposes of the EGCS; or
- (b)
- blend the vegetable oil with other substances to produce a product that falls within the definition of 'off-road diesel fuel' for the purposes of the EGCSA.
The entity then uses the products.
Reasons for Decision
Under section 56 of the EGCSA, an entity is entitled to an energy grant if they are entitled to either an on-road credit or an off-road credit.
In order to meet the requirements of any of the sections (sections 42, 43, 44, 45, 46 or 47) of the EGCSA under which an entity may be entitled to an on-road credit, they must have purchased, or imported into Australia, the on-road alternative fuel.
Similarly, in order to meet the requirements of section 53 of the EGCSA under which an entity may be entitled to an off-road credit, the entity must have purchased, or imported into Australia the off-road diesel fuel.
'Purchase' is not defined in the Act, and therefore takes on its ordinary meaning. The Macquarie Dictionary 2001 rev. 3rd edn, The Macquarie Library Pty Ltd, NSW defines the verb 'purchase' as:
to acquire by the payment of money or its equivalent
In this instance, the client does not acquire either the on-road alternative fuel or the off-road diesel fuel by the payment of money or its equivalent.
Rather, the client produces the fuel themselves, firstly through the process of growing the crop from which the relevant oil is extracted, and then by subjecting the oil to other processes to produce on-road alternative fuel and off-road diesel fuel.
Therefore, the client has not purchased the fuel for the purposes of sections 42, 43, 44, 45, 46, 47 and 53 of the EGCSA.
Date of decision: 18 November 2003
Legislative References:
Energy Grants (Credits) Scheme Act 2003
section 42
section 43
section 44
section 45
section 46
section 47
section 53
section 56
Other References:
The Macquarie Dictionary 2001 rev. 3rd edn, The Macquarie Library Pty Ltd, NSW
Keywords
EGCS purchase
Energy grants (credits) scheme
ISSN: 1445-2782
| Date: | Version: | |
| You are here → | 18 November 2003 | Original statement |
| 1 July 2012 | Archived |