ATO Interpretative Decision

ATO ID 2003/700 (Withdrawn)

Excise

• This ATO ID is withdrawn as the fuel tax credits scheme has replaced the energy grants credit scheme for eligible fuel acquired from 1 July 2006 for the purpose of electricity generation.
  This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

For the purposes of the Energy Grants (Credits) Scheme, are the living quarters provided for the crew on a vessel, 'residential premises' as that term is defined in section 4 of the Energy Grants (Credits) Scheme Act 2003 (EGCSA)?

Decision

Yes. On a vessel, the living quarters of the crew can be 'residential premises' as defined in section 4 of the EGCSA as there is a sufficient continuity of association between the vessel and the members of the crew.

Facts

A vessel visits an Australian port.

Throughout the vessel's voyages the crew eats, sleeps, works and has recreation time on the vessel. When the vessel ties up at the port, some crew members continue to use the living quarters on the vessel while others spend short periods at accommodation ashore.

Rotation of crew can occur in terms of individuals using the living quarters on the vessel and spending short periods at accommodation ashore, however some crew continue to use the living quarters on the vessel at all times.

Reasons for Decision

Paragraph 53(4)(b) of the EGCSA provides that an off-road energy grant is payable to a person who purchases diesel fuel for use at residential premises to generate electricity to meet the domestic requirements of the residents of the premises:

(b)

use at residential premises to generate electricity for use in:

(i)

providing food and drink for; or

(ii)

providing lighting, heating, air-conditioning, hot water or similar amenities for; or

(iii)

meeting other domestic requirements of

residents of the premises

Section 4 of the EGCSA defines 'residential premises' as:

(a)

premises used as a house; or

(b)

other premises at which at least one person resides

but does not include:

(c)

premises used in the business of a hotel, motel or boarding house or a similar business...

In Collector of Customs v. Perkins Shipping Pty Ltd (1989) 24 FCR 520; (1989) 85 ALR 279; (1989) 10 AAR 119, the Federal Court considered whether 'residential premises' could include the living quarters of vessels under the Diesel Fuel Rebate Scheme, the precursor to the Energy Grants (Credits) Scheme administered under the Excise Act 1901 and the Customs Act 1901.

The court decided that 'residential premises' can include the living quarters of vessels provided the requisite continuity of association exists between the vessel and crew to constitute the vessel as the crew's place of residence. In that case the Full Federal Court cited with approval the following passage from the judgment of Williams J in Koitaki Para Rubber Estates Pty Limited v. Federal Commissioner of Taxation (1941) 64 CLR 241; (1941) 6 ATD 82; (1941) 2 AITR 136:

The place of residence of an individual is determined, not by the situation of some business or property which he is carrying on or owns, but by reference to where he eats and sleeps and has his settled or usual abode. If he maintains a home or homes he resides in the locality or localities where it or they are situate, but he may also reside where he habitually lives even if this is in hotels or on a yacht or some other abode

In this case the crew members eat, sleep, work and have their recreation time on the vessel, except for short periods ashore and during the vessel's time in port, certain crew remain on board at all times. Therefore, a requisite continuity of association between the vessel and its crew exists and as such, the vessel is considered to be 'residential premises'.

Legislative References:
Energy Grants (Credits) Scheme Act 2003
   section 4
   paragraph 53(4)(b)

Case References:
Customs, Collector of v. Perkins Shipping Pty Ltd
   (1989) 24 FCR 520
   (1989) 85 ALR 279
   (1989) 10 AAR 119

Keywords
EGCS use to generate electricity
EGCS use to generate electricity at residential premises

Business Line:  Excise

Date of publication:  8 August 2003

ISSN: 1445-2782