ATO Interpretative Decision
ATO ID 2006/11
Excise
Energy Grants (Credits) Scheme: off-road - forestry - a nursery, in a forest or plantationFOI status: may be released
This version is no longer current. Please follow this link to view the current version. |
-
This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
In a forest, is the propagating of trees in the forest nursery an eligible activity in 'forestry' for the purposes of paragraph 35(a) of the Energy Grants (Credits) Scheme Act 2000 (EGCSA)?
Decision
Yes. In a forest, the propagation of trees in the forest nursery is 'forestry' for the purposes of paragraph 35(a) of the EGCSA.
Facts
An entity manages a site where it carries on forestry to obtain timber as primary produce.
The entity has a nursery located on the forestry site.
Seeds are planted, tended and propagated into seedlings in the nursery.
Seedlings from the nursery are transplanted out in the coupe in the forest or plantation. The trees in the coupe will be felled when they are mature.
Reasons for Decision
Paragraph 35(a) of the EGCSA states that the planting or tending of trees in a forest or plantation is an eligible activity, provided the trees are intended for felling. The activity must be carried out as part of a commercial undertaking to obtain timber as primary produce.
Nurseries which are outside the forest or plantation cannot obtain the off-road grant for these activities. To be eligible, the activities must be undertaken at a nursery which is situated in the forest or plantation. There is a question as to whether land occupied by the nursery can be said to be 'in' the forest or plantation.
A forest site is not restricted to the specific areas (coupes) in which trees are grown. The whole of a site occupied by a forestry authority, for the purpose of obtaining timber as primary produce, is generally considered to be a 'forest' although trees may not be grown on some parts of the site. For example, firebreaks and vehicle parking areas on such a site are considered to be within the forest, although trees are not grown in those specific areas.
If an area of land, on which trees are either naturally growing or are planted specifically for harvesting as timber, is subject to a forest management plan then the area is taken to be a forest or plantation for the purposes of section 35 of the EGCSA.
Therefore, if an area is designated as a tree nursery in a forest or plantation subject to a forest management plan, and seedlings are propagated in the nursery for the purpose of transplanting to a coupe in the forest or plantation as part of an integrated process of planting or tending of trees intended for felling, the nursery is 'forestry' for the purposes of paragraph 35(a) of the EGCSA.
Consequently, the diesel fuel used in the planting and tending of new trees in the nursery is eligible for the off-road grant.
Date of decision: 30 November 2005
Legislative References:
Energy Grants (Credits) Scheme Act 2003
paragraph 35(a)
Related Public Rulings (including Determinations)
Product Grant and Benefit Ruling PGBR 2005/1
ATO ID 2006/12
Keywords
EGCS forest
EGCS forestry
EGCS off-road
EGCS plantation
EGCS planting or tending
ISSN: 1445-2782
| Date: | Version: | |
| You are here → | 30 November 2005 | Original statement |
| 7 October 2011 | Archived |