Taxation Ruling
IT 289W - Notice of Withdrawal
Orchid growing: whether primary production
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Please note that the PDF version is the authorised version of this withdrawal notice.
Notice of Withdrawal
Taxation Ruling IT 289 is withdrawn with effect from today.
1. The purpose of IT 289 was to clarify the Commissioner's view on whether orchid growing qualified as primary production. When IT 289 (which replaced CITCM 759) was issued, the only paragraph in the definition of 'primary production' in subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936) relevant to horticultural activities was paragraph (a) 'the cultivation of land', leaving room for doubt as to whether orchids which were not grown directly in the soil fell within the definition.
2. The definition of 'primary production' was amended by Tax Laws Amendment Act (No. 3) 1992 to include paragraph (e). At the same time a definition of 'horticulture' was inserted into subsection 6(1) of the ITAA 1936. These amendments left no doubt that orchid growing fell within the definition of primary production.
3. The 1992 amendments are reflected in paragraph (a) of the definition of 'primary production business' in section 995-1 of the Income Tax Assessment Act 1997 which incorporates the essence of the former definition of 'horticulture' in the ITAA 1936. Under the current provisions, an orchid growing business is clearly a primary production business.
Commissioner of Taxation
16 November 2011