ATO Interpretative Decision

ATO ID 2003/805 (Withdrawn)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• This ATO ID is withdrawn from the database because it contains a view in respect of the diesel fuel rebate provisions of the Excise Act 1901 and or the Customs Act 1901 that were repealed with effect from 1 July 2003.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 the pumping of water from a water source located on the claimant's farm to the garden surrounding the claimant's homestead which is also located on the farm, an eligible activity under subsection 164(1) of the Customs Act 1901 or section 78A of the Excise Act 1901?

Decision

Yes. The pumping of water from a water source located on the claimant's farm to the garden surrounding the claimant's homestead which is also located on the farm is an eligible activity under subsection 164(1) of the Customs Act or section 78A of the Excise Act.

Facts

The claimant has a farming property, on which they have been rearing beef cattle for more than ten years.

In undertaking agricultural activity on their farm, the claimant uses diesel fuel in their tractor, irrigation pump and water pump. The claimant also uses diesel fuel to power a pump which conveys water from a water source on the claimant's farm to a tank which is used to water the garden surrounding the homestead, which is also located on the farm.

Reasons for Decision

The definition of agriculture in subsection 164(7) of the Customs Act 1901 includes:

(zba)

the use of diesel fuel at residential premises in:

(i)

providing food and drink for; or

(ii)

providing lighting, heating, air-conditioning, hot water or similar amenities for; or

(iii)

meeting other domestic requirements of

residents of the premises if:

(iv)

the use is by a person who carries on a core agricultural activity; and

(v)

the residential premises are situated on the agricultural property where that activity is carried on

Subsection 164(7) of the Customs Act 1901 defines residential premises as:

'residential premises' means-

(a)

premises used as a house; or

(b)

other premises at which at least one person resides,

(c)

but does not include-

(d)

premises used in the business of a hotel, motel or boarding house or a similar business

(e)

premises used as a hospital or nursing home or as any other institution providing medical or nursing care

(f)

premises used as a home for aged persons; or

(g)

premises used as a boarding school.

Subsection 164(7) of the Customs Act 1901 defines core agricultural activity as:

'core agricultural activity' means an activity referred to in paragraph (a), (b), (c) or (d) of the definition of 'agriculture' if that activity is carried out for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.

The issue of 'at' residential premises was considered in Collector of Customs v. Rottnest Island Authority (1994) 48 FCR 177 in which it was concluded:

We consider that the section requires that, because the existence of some appropriate heating or generating plant is clearly contemplated, the location of such a plant be in sufficient proximity to the premises as to enable it reasonably to be identified with the premises. It must be appurtenant to the premises and coherent with them. It must be able to be said of the plant using the fuel that it belongs to the premises even though it be not a part of them.

The pumping of water for use in the garden surrounding the homestead is considered to be an 'other domestic requirement'. As the pump is used to pump water from the river to a tank from which the garden is watered, it is considered that the location of the pump is in sufficient proximity to the residential premises.

The claimant's primary production business, which involves the rearing of beef cattle falls within the definition of a core agricultural activity. As a core agricultural activity is carried out on an agricultural property and the residential premises are located on that property, the claimant is eligible for the diesel fuel rebate for the diesel fuel used to pump water for use in the garden surrounding the homestead.

Legislative References:
Excise Act 1901
   subsection 78A(1)
   subsection 78A(7)

Case References:
Collector of Customs v. Rottnest Island Authority
   (1994) 48 FCR 177

Keywords
DFRS agriculture
Diesel fuel rebate scheme
Excise
Excise payments
Residential premises

Business Line:  Excise

Date of publication:  5 September 2003

ISSN: 1445-2782