ATO Interpretative Decision
ATO ID 2003/1046 (Withdrawn)
Excise
Diesel Fuel Rebate Scheme - is talc a mineral?FOI status: may be released
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This ATO ID is withdrawn from the database because it contains a view in respect of the diesel fuel rebate provisions of the Excise Act 1901 and or the Customs Act 1901 that were repealed with effect from 1 July 2003.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.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 talc a mineral for the purposes of determining what constitutes 'mining operations' as defined in subsection 164(7) of the Customs Act 1901?
Decision
Yes. Talc is a mineral for the purposes of determining what constitutes 'mining operations' as defined in subsection 164(7) of the Customs Act.
Facts
Raw talc is extracted from the ground using large mining excavator equipment.
When extracted, the raw talc is in the form of large rocks and/or small boulders.
Talc is a soft, white to green material. It has the formula Mg3Si4O10(OH)2. It does not become plastic nor swell when wetted. It is formed deep below the surface by metamorphic processes when igneous rocks, such as granite, intrude magnesium rich sediments. When exposed by erosion, or by mining, it is found in large coherent masses which will not readily break up. Blasting and impact mining are required to separate the talc masses from surrounding rocks. In order to reduce the talc to an ultrafine grainsize, crushing and grinding is required.
Reasons for Decision
'Mining operations' is an eligible activity for the purposes of the diesel fuel rebate scheme. Paragraph (b) of the definition of 'mining operations' in subsection 164(7) of the Customs Act defines that term as meaning 'operations for the recovery of minerals'.
Subsection 164(7) of the Customs Act defines 'minerals' as:
Minerals in any form, whether solid, liquid or gaseous and whether organic or inorganic, except:
- (a)
- sand, sandstone, soil, slate, clay (other than bentonite or kaolin), basalt, granite, gravel or water; or
- (b)
- limestone (other than agricultural use limestone).
The above definition contains two tests that must be satisfied in order for talc to be considered a mineral for the purposes of the diesel fuel rebate scheme.
The first test is whether talc is a 'mineral' as that term is commonly understood. The Macquarie Dictionary revised 3rd edition, 2001 The Macquarie Library Pty Ltd, NSW defines 'mineral' as being 1. a substance obtained by mining; ore. Talc clearly meets this definition.
The second test is whether talc is excluded from being a mineral by any of the specific exclusions in the definition. Talc is clearly not sand, sandstone, soil, slate, basalt, granite, gravel or limestone. Therefore, talc is a mineral as defined in subsection 164(7) provided it is not clay.
Some mineralogists classify talc as a clay mineral. However, other mineralogists do not support this classification for the following reasons:
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- Clay minerals commonly consist of hydrous layer silicates of aluminium. Talc does not contain aluminium.
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- Clay commonly consists of particles of less than 4 microns. Talc on the other hand is found in large, coherent masses.
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- Clay commonly becomes plastic and swells when wetted. Talc does not.
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- Clay is usually formed by surface weathering processes. Talc is generally formed deep under the surface by metamorphic processes.
Given the above arguments, it is accepted that talc is not clay. Therefore, talc is a mineral for the purposes of determining what are 'mining operations' as defined in subsection 164(7) of the Customs Act.
Date of decision: 3 November 2003
Legislative References:
Customs Act 1901
subsection 164(7)
ATO ID 2003/819
Other References:
The Macquarie Dictionary revised 3rd edition, 2001 The Macquarie Library Pty Ltd, NSW
Keywords
DFRS mining
Diesel fuel rebate scheme
ISSN: 1445-2782
| Date: | Version: | |
| 3 November 2003 | Original statement | |
| You are here | 8 January 2010 | Archived |