ATO Interpretative Decision
ATO ID 2006/55
Excise
Energy Grants (Credits) Scheme: off-road - forestry - veneer slicingFOI 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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Is slicing timber to produce veneer 'milling' of timber for the purposes of section 35 of the Energy Grants (Credits) Scheme Act 2003 (EGCSA)?
Decision
No, the slicing of timber to produce veneer is not the 'milling' of timber for the purposes of section 35 of the EGCSA.
Facts
An entity produces veneer from prepared flitches using a veneer slicing machine.
The flitch is attached to a movable carriage in the veneer slicing machine (sometimes referred to as a 'lathe') and repeatedly passed across a fixed blade, producing veneer sheets.
Reasons for Decision
The expressions 'milling' and 'milling of timber' are not defined in the EGCSA and have no particular trade or industry meaning. They therefore take their ordinary meaning.
The ordinary meaning of the term 'mill' was considered in Re Wesfi Pty Ltd and Collector of Customs (WA) (1984) 7 ALN N8 in which the Administrative Appeals Tribunal reasoned that a machine which operates by rotary action is accepted as falling within the ordinary concept of a mill.
The Tribunal followed this approach in its subsequent decisions Re Brymay Forests Pty Ltd & Collector of Customs (Vic) (1985) 9 ALN N177 and Re TJ Depiazzi & Sons and Collector of Customs (1993) 17 AAR 557. In those decisions, the Tribunal specifically took into account the element of rotary action in determining whether or not a process was a process of milling.
The drawing of a flitch across a fixed blade to produce a veneer strip does not involve a rotary action. It is therefore not a process of 'milling' timber, within the ordinary meaning of the term.
Date of decision: 25 November 2005
Legislative References:
Energy Grants (Credits) Scheme Act 2003
section 35
Case References:
Wesfi Pty Ltd & Collector of Customs (WA), Re
(1984) 7 ALN N8
(1985) ALN N177
[1985] AATA 2496 TJ Depiazzi & Sons and Collector of Customs, Re
(1993) 17 AAR 557
[1993] AATA 8770
Related Public Rulings (including Determinations)
Product Grants and Benefits Ruling PGBR 2005/1
ATO ID 2004/684
ATO ID 2004/763
ATO ID 2006/54
ATO ID 2006/56
Keywords
Energy grants (credits) scheme
EGCS off-road
EGCS forestry
EGCS milling
ISSN: 1445-2782
| Date: | Version: | |
| You are here → | 25 November 2005 | Original statement |
| 1 July 2012 | Archived |