ATO Interpretative Decision
ATO ID 2006/47
Excise
Energy Grants (Credits) Scheme: off-road - forestry - eligible use of fuel in vehicles to supervise a forestry activityFOI status: may be released
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This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 diesel used in a vehicle, in a forest or plantation, for the purposes of supervision and management of an eligible forestry activity, an eligible use in 'forestry' for the purposes of section 35 of the Energy Grants (Credits) Scheme Act 2003 (EGCSA)?
Decision
Yes. Diesel used in a vehicle, in a forest or plantation, for the purposes of supervision and management of an eligible forestry activity, is an eligible use in 'forestry' for the purposes of section 35 of the EGCSA.
Facts
A diesel powered vehicle is used to transport a forest manager, within a forest or plantation, to supervise and/or manage a forestry activity.
The manager supervises eligible forestry activities, including the planting and tending of trees and the felling of timber.
Reasons for Decision
Similar to the previous off-road scheme, the Energy Grants (Credits) Scheme is a beneficial scheme that confers benefits on persons who undertake certain activities. The entitlement provisions of these schemes are intended to be read in a practical commonsense manner (Re Central Norseman Gold Corporation Limited and Collector of Customs, Western Australia AAT NO W84/118; (1985) 8 ALN N288).
In a forest or plantation, forest management is undertaken in line with a forestry management plan to produce timber as primary produce.
In paragraph 35(a) of the EGCSA the term 'tending of trees' means the undertaking of activities to ensure the survival of the trees or to enhance their growth, quality and vigour.
The term 'tending' is not defined in the EGCSA and therefore takes on its ordinary, common meaning. In the The Macquarie Dictionary, 2001, rev. 3rd edn, The Macquarie Library Pty Ltd, NSW, the verb 'to tend' is defined as:
1. to attend to by work or services, care etc: to tend a fire
2. to look after; watch over and care for; minister to or wait on with service.
Consequently, the 'tending of trees' means the undertaking of activities to ensure the survival of the trees or to enhance their growth, quality and vigour.
The term 'supervision' is not defined in the EGCSA and therefore takes on its ordinary, common meaning. In The Macquarie Dictionary, the verb 'supervise' is defined as:
1. to oversee (a process, work, workers, etc.) during execution or performance; superintend; have the oversight and direction of.
The term 'management' is not defined in the EGCSA and therefore takes on its ordinary, common meaning. In The Macquarie Dictionary, the verb 'manage' is defined as:
1. to bring about; succeed in accomplishing
4. to handle, direct, govern, or control in action or use
The supervisor/manager of forestry personnel engaged in planting and tending trees is part of the workforce engaged in 'planting and tending' and is therefore undertaking an eligible activity in 'forestry'.
In our view the supervision of personnel involved in a forestry activity and the management of an eligible forestry activity can be described as processes or services necessary to, or assisting in, obtaining timber as a primary produce as part of a commercial enterprise.
Therefore, diesel fuel used in a vehicle, in a forest or plantation, to supervise or manage an eligible forestry activity is an eligible activity in the meaning of 'forestry' per section 35 of the EGCSA.
Date of decision: 30 November 2005
Legislative References:
Energy Grants (Credits) Scheme Act 2003
section 4
section 35
subsection 53(2)
Related Public Rulings (including Determinations)
Product Grants and Benefits Ruling PGBR 2005/1
ATO ID 2004/268
ATO ID 2006/48
ATO ID 2006/49
Keywords
EGCS forestry
EGCS off-road
EGCS planting or tending of trees
EGCS primary production
EGCS standing timber
EGCS thinning or felling
Energy grants (credits) scheme
ISSN: 1445-2782
| Date: | Version: | |
| You are here → | 30 November 2005 | Original statement |
| 1 July 2012 | Archived |