ATO Interpretative Decision
ATO ID 2004/828
Excise
Energy Grants (Credits) Scheme: off-road credit - rail transport - reefer awaiting loading onto trainFOI 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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 the use of diesel fuel to power a reefer's generator, whilst the reefer is sitting in a rail yard awaiting transportation, 'use in rail transport' as defined in section 38 of the Energy Grants (Credits) Scheme Act 2003 (EGCSA)?
Decision
No. The use of diesel fuel to power a reefer's generator, whilst the reefer is sitting in a rail yard awaiting transportation, is not 'use in rail transport' as defined in section 38 of the EGCSA.
Facts
An entity purchases diesel fuel which they place in a 'reefer'.
A reefer is a refrigerated container that ordinarily uses diesel fuel from its own tank to power the reefer's refrigeration plant. The reefer's refrigeration plant must be kept running at all times to ensure that the contents of the reefer are kept at the required temperature. The entity purchases and supplies the diesel fuel used in the reefer.
The reefer is placed on a train and transported between two places.
Once the reefer is delivered to a rail yard, it often remains there for variable periods of time prior to being loaded onto a train for transportation to its destination. The reefer may also sit in a rail yard at its destination point, prior to being collected.
Reasons for Decision
Subsection 53(1) of the EGCSA provides that an entity is, subject to certain conditions, entitled to an off-road credit if they purchase diesel fuel for a use by them that qualifies.
Section 53(3) of the EGCSA provides that use in rail transport (other than for the purpose of propelling a road vehicle on a public road) in the course of carrying on an enterprise, is a use that qualifies.
Section 38 of the EGCSA sets out the meaning of the expression 'use in rail transport', and it includes various uses. All the uses covered by section 38 require the fuel to be used 'in a rail vehicle' or in some instances the fuel may be used 'in equipment in or on a rail vehicle'. The term 'rail vehicle' is defined in section 39 of the EGCSA as:
...a train, tram or any other vehicle operating on rails.
In this instance, the reefer is awaiting loading onto the train for transport to its destination. The reefer is not yet in or on the train and therefore the use of diesel fuel to chill the reefer cannot be considered to be 'use in equipment in or on a rail vehicle'. Neither is the fuel used in a rail vehicle.
Accordingly, the use of diesel fuel to power a reefer's generator, whilst the reefer is sitting in a rail yard awaiting transportation, is not 'use in rail transport' as defined in section 38 of the EGCSA.
Date of decision: 7 October 2004
Legislative References:
Energy Grants (Credits) Scheme Act 2003
subsection 53(1)
subsection 53(3)
section 38
subsection 38(5)
Keywords
EGCS in a rail vehicle
EGCS rail transport
ISSN: 1445-2782
| Date: | Version: | |
| You are here → | 7 October 2004 | Original statement |
| 1 July 2012 | Archived |