ATO Interpretative Decision
ATO ID 2004/87
Excise
Energy Grants (Credits) Scheme: off-road - agriculture - rearing of livestockFOI status: may be released
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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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Is the loading of chickens onto prime movers so they can be sent for slaughter 'the rearing of live-stock' for the purposes of paragraph 22(1)(c) of the Energy Grants (Credits) Scheme Act 2003 (EGCSA)?
Decision
No. The loading of chickens onto prime movers so they can be sent for slaughter, is not 'the rearing of live-stock' for the purposes of paragraph 22(1)(c) of the EGCSA.
Facts
An entity operates a transport business.
The entity collects chickens from agricultural properties. Diesel powered forklifts are used to load containers of live chickens onto the prime movers.
Once loaded onto the waiting vehicles, the chickens are transported to a plant where they are slaughtered.
The chickens are 'livestock' for the purposes of the EGCSA.
Reasons for Decision
Section 53 of the EGCSA provides that, subject to the conditions and restrictions specified in the regulations, an entity is entitled to an off-road credit if they purchase or import into Australia off-road diesel fuel for a use by them that qualifies, including 'agriculture'.
'Agriculture' is defined in section 22 of the EGCSA to include, subject to certain limitations, 'the rearing of livestock'.
'Rear' is defined in The Macquarie Dictionary 2001 rev. 3rd edn, The Macquarie Library Pty Ltd, NSW, as 'to care for and support up to maturity: to rear a child'.
Consequently, the 'rearing of livestock' includes all activities required to breed, raise and care for the animals for the specific purpose for which they are being reared, in accordance with accepted commercial animal husbandry and management practices.
The Diesel Fuel Rebate Scheme was the precursor to the Energy Grants (Credits) Scheme, and was administered under the Customs Act 1901, and the Excise Act 1901. The Customs Act allowed a diesel fuel rebate to be paid for the rearing of livestock, and the decisions of the following cases remain relevant.
In Australian National Railways v. Collector of Customs, South Australia (1985) 8 FCR 264 (the Railways case), Impast Pty Ltd and Collector of Customs No. W91/290 AAT No. 8355; and Re: French Island Barge Pty Ltd and: Collector of Customs No.V92/255 AAT No 8625, it was generally accepted that the rearing of livestock ends when the purpose for which the animals are reared is complete. The transportation of livestock to an abattoir, a slaughtering point, or to a port for export is therefore an activity that is not included in the 'rearing of livestock'.
Notably, in the Railways case, Davies, J noted that:
the transportation of livestock by contractors which takes place in the course of rearing livestock, as distinct from transportation which takes place for the purpose of sale or other disposal, is an operation of primary production as defined...
In this case, the purpose of loading the chickens is so that they can then be transported to be slaughtered, not so that the rearing process can continue. The loading of chickens onto a prime mover so they can be sent for slaughter is an integral part of the transportation of the chickens from the agricultural property to the slaughter/processing plant.
Therefore, whilst the chickens are not transported from the property at this stage, but merely loaded in preparation for transportation, the purpose for which they are reared can be considered to be complete when the chickens are placed in the containers for loading.
Accordingly, the loading of chickens onto prime movers so they can be sent for slaughter is not 'the rearing of live-stock' for the purposes of paragraph 22(1)(c) of the EGCSA.
Date of decision: 14 January 2004
Legislative References:
Energy Grants (Credits) Scheme Act 2003
section 22
subsection 22(c)
paragraph 22(1)(c)
subsection 23(2)
section 53
Case References:
Impast Pty Ltd and Collector of Customs
No. W91/290, AAT No. 8355
No. V92/255, AAT No. 8625 Australian National Railways v. Collector of Customs, South Australia
(1985) 8 FCR 264
Other References:
The Macquarie Dictionary 2001 rev. 3rd edn, The Macquarie Library Pty Ltd, NSW
Keywords
EGCS agriculture
EGCS livestock activities
EGCS off-road
Energy grants (credits) scheme
ISSN: 1445-2782
| Date: | Version: | |
| You are here → | 14 January 2004 | Original statement |
| 10 September 2004 | Archived |