ATO Interpretative Decision

ATO ID 2006/249

Excise

• This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Is the movement of a fishing vessel from its home port to a temporary berth (and return), to enable the vessel to access new fishing grounds, 'fishing operations' as defined in subsection 34(1) of the Energy Grants (Credits) Scheme Act 2003 (EGCSA)?

Decision

Yes. The movement of a fishing vessel from its home port to a temporary berth (and return) to enable the vessel to access new fishing grounds is 'fishing operations' as defined in subsection 34(1) of the EGCSA.

Facts

An entity that conducts a fishing business moves a fishing vessel from its home port to a temporary berth at a new port from which it can readily access new fishing grounds.

A temporary base is set up on arrival at the port. The vessel sails from the temporary berth to the new fishing grounds where fish are caught. The vessel ultimately returns to its home port.

Reasons for Decision

The expression 'fishing operations' is defined in subsection 34(1) of the ECGSA as meaning:

(a)

the taking, catching or capturing of fish; or

...

(g)

the undertaking:

(i)

of voyages to or from a port by a vessel for the purposes of refitting or repairing the vessel, or its equipment, for purposes that are integral to the performance of an activity referred to in any of the preceding paragraphs; or

...

but does not include any activity referred to in any of the preceding paragraphs that is conducted, in whole or in part:

(h)

otherwise than for the purposes of a business; or

(i)

for business purposes connected with recreation, sport or tourism.

The Product Grant and Benefit Ruling PGBR 2004/1 at paragraph 67 states that:

We consider that the following three criteria are relevant in determining if an activity takes place 'in the course of' a fishing operation. These are:

•

a causal link exists - in other words, a certain activity is functionally integrated with a fishing operation, thereby forming an essential part of it; and

•

a spatial link exists - meaning that an activity takes place in an area set aside or utilised for a fishing operation; and

•

a temporal link exists - the activity takes place in a timely fashion, not prior to, or after the completion of, the fishing operation.

In Federal Commissioner of Taxation v. Payne (2001) 202 CLR 93; 2001 ATC 4027; (2001) 46 ATR 228; CEO of Customs v. WMC Resources Ltd (as agent for East Spar Alliance) (1998) 87 FCR 482 [WMC] and Re Wandoo Alliance Pty Ltd and Chief Executive Officer of Customs (2001) 34 AAR 98; [2001] AATA 801, amongst other cases, it was deemed pertinent to consider one or all of these factors when determining whether an activity or activities were undertaken 'in the course of' something.

In Re Tas Island Shipping Pty Ltd and Collector of Customs (1989) 11 AAR 121 the Tribunal said at paragraph 10:

We do not think that the 'taking or capturing of fish' should be construed as being confined to the physical acts of taking or capturing. The legislative provisions in question were intended to benefit commercial fishing operations. Where there is doubt as to the meaning and application of those provisions, they should, in our opinion, be given a wide, rather than a narrow construction.

If the definition of fishing operations were read narrowly, voyages undertaken between a port and fishing grounds would not qualify as fishing operations, as the voyage arguably occurs before 'the taking, catching or capturing of fish' or any of the other specific activities listed in subsection 34(1) of the EGCSA.

Applying a broad construction, it is clear that voyages undertaken from a port to fishing grounds form part of 'fishing operations'. As voyages of this nature are not specifically referred to in subsection 34(1) of the EGCSA, the voyages must form part of 'the taking, catching or capturing of fish'.

In the course of commercial fishing operations, it can be reasonably expected that a vessel will have to relocate on occasion to access more viable fishing grounds. It can also be reasonably expected that on occasion the distance between the vessel's home port and the alternative fishing grounds may require the vessel to berth temporarily in a new port. Therefore the voyage between the home port and the temporary berth at the new port can also be accepted as forming part of 'the taking, catching or capturing of fish'.

The voyage from the vessel's home port to a temporary berth (and return), to enable the vessel to access new fishing grounds is 'fishing operations' as defined in subsection 34(1) of the EGCSA.

Legislative References:
Energy Grants (Credits) Scheme Act 2003
   subsection 53(1)
   subsection 53(2)
   paragraph 34(1)(a)
   paragraph 34(1)(h)
   paragraph 34(1)(i)
   paragraph 34(1)(g)

Case References:
Chief Executive Officer of Customs v. WMC Resources Ltd
   (1998) 87 FCR 482

Related Public Rulings (including Determinations)
Product Grant and Benefit Ruling PGBR 2004/1

Keywords
EGCS fishing operations
EGCS fishing operations business
EGCS off-road
Energy grants (credits) scheme

Business Line:  Indirect Tax

Date of publication:  8 September 2006

ISSN: 1445-2782