ATO Interpretative Decision

ATO ID 2002/953 (Withdrawn)

Excise

• This ATO ID is withdrawn from the database because it contains a view in respect of the diesel fuel rebate provisions of the Excise Act 1901 and or the Customs Act 1901 that were repealed with effect from 1 July 2003. Despite its withdrawal from the database, this ATO ID continues to be a precedential view in respect of decisions for fuel purchased before 1 July 2003.
  This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Is diesel fuel, purchased by a tourism enterprise for use in vessels which are hired out to the public for fishing or recreational purposes, eligible for the diesel fuel rebate under subsection 164(1) of the Customs Act 1901 (Customs Act) and subsection 78A(1) of the Excise Act 1901 (Excise Act)?

Decision

The tourism enterprise is entitled to the diesel fuel rebate under subsection 164(1) of the Customs Act and subsection 78A(1) of the Excise Act under the 'marine transport' category for the fuel used to power the vessels it hires to customers, provided the cost of the fuel is included in the overall hire charge and the hirers are not separately charged for the fuel.

Facts

The applicant for rebate carries on an enterprise as a tourism business. The basis of the enterprise is that it hires out vessels for fishing or recreational activities.

The hire rate paid by hirers of the vessels is inclusive of all fuel used irrespective of the quantity. The hirers have exclusive use of the vessels and fuel during the hire period.

Reasons for Decision

Subsection 164(1) of the Customs Act relevantly provides that the diesel fuel rebate is payable to a person who purchases fuel for use by him for marine transport in the course of carrying on an enterprise.

Subsection 164(2) of the Customs Act relevantly provides that a person is not entitled to the rebate if the person sells or otherwise disposes of the fuel.

In Re Riviera Nautica Pty Limited and Commissioner of Taxation the Administrative Appeals Tribunal found that:

(a)

the word 'use' has a wide meaning and should be given its ordinary or general meaning. The tribunal was satisfied that the applicant purchases diesel fuel for its own use

(b)

the meaning of the words marine transport, covers the hire of vessels so that clients of a tourism enterprise can transport themselves around by vessel

(c)

the use by the tourism enterprise of diesel fuel to power vessels which it hires to customers is a use of the fuel 'in marine transport', in the course of carrying on an enterprise; and

(d)

as any fuel remaining in the vessel at the end of the fuel is returned to the tourism enterprise, the fuel is not disposed of or sold by the tourism enterprise to the hirers. Therefore subsection 164(2) of the Customs Act does not disentitle the applicant in these circumstances.

Legislative References:
Customs Act 1901
   paragraph 164(1)
   subsection 164(2)

Case References:
Re Riviera Nautica Pty Limited and Commissioner of Taxation (unreported) Administrative Appeals Tribunal Nos VT01/1102 and 1103, Senior Member Dwyer, Melbourne, 5 August 2002
   unreported

Related ATO Interpretative Decisions
ATO ID 2002/252

Keywords
Primary production
Northbridge ATO
Excise
Diesel fuel rebate scheme
DFRS forestry
DFRS agriculture

Business Line:  Excise

Date of publication:  2 October 2002

ISSN: 1445-2782