ATO Interpretative Decision

ATO ID 2004/170 (Withdrawn)

Excise

• This ATO ID is withdrawn from 1 July 2012, the date the Energy Grants (Credits) Scheme Act 2003 was repealed.
  Despite its withdrawal, this ATO ID continues to be a precedential ATO view in respect of the period the Act was in force, 1 July 2003 up to and including 30 June 2012.
  This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Is the use of diesel fuel in anchor-handling activities carried out by a tug 'use in marine transport' as defined in subsection 36(3) of the Energy Grants (Credits) Scheme 2003 Act (EGCSA)?

Decision

Yes. The use of diesel fuel in anchor-handling activities carried out by a tug is 'use in marine transport' as defined in subsection 36(3) of the EGCSA.

Facts

A tug uses diesel fuel in the vessel itself and in a winch on the vessel to provide anchor-handling services for barges.

Anchor-handling services encompass the activities of setting the anchor, moving a set anchor and retrieving the anchor and returning it to the barge.

When laying the anchor, the tug backs up to the barge and retrieves the anchor. It then winches the anchor into position and proceeds to the release position. The winch then releases the anchor to the sea bed.

Sometimes, it may be necessary for the tug to move a set anchor. This service will involve positioning and repositioning of the tug and use of the winch.

On completion of the anchor handling service, the tug retrieves the anchor and returns it to the barge.

Reasons for Decision

Subsection 53(1) of the EGCSA provides that an entity is, subject to certain conditions, entitled to an off-road credit if they purchase diesel fuel for a use by them that qualifies. Under subsection 53(3) of the EGCSA, 'use in marine transport' is a use that qualifies.

Section 36 of the EGCSA provides:

(3) Use:

(a)

in a vessel, or in equipment in or on a vessel; and

(b)

while the vessel is in or on the sea or fresh water; and

(c)

for any of the purposes mentioned in subsection (4);

is use in marine transport.

Subsection 36(4) of the EGCSA includes the following purpose:

(c)

providing towing, mooring or piloting services; ...

The Macquarie Dictionary 2001, rev. 3rd edn, The Macquarie Library Pty Ltd, NSW defines 'moor' as:

1. to secure (a ship, etc) in a particular place, as by cables and anchors... 2. ... 3. to moor a ship, etc. 4. to take up a position or be made secure by anchors or the like, as a ship...

Diesel fuel used in a tug and in powering a winch on the tug in providing anchor-handling services (setting, moving and retrieving the anchor) for barges is clearly part of providing mooring services within this definition.

Accordingly, diesel fuel used by a tug and in a winch on the tug in anchor-handling activities is fuel used:

•

in a vessel or in equipment on a vessel

•

while that vessel is in or on the sea, and

•

for one of the purposes mentioned in subsection 36(4) of the EGCSA.

It is therefore 'use in marine transport' in accordance with subsection 36(3) of the EGCSA.

Legislative References:
Energy Grants (Credits) Scheme Act 2003
   subsection 53(1)
   subsection 53(3)
   subsection 36(3)
   paragraph 36(4)(c)

Other References:
The Macquarie Dictionary 2001, rev. 3rd edn, The Macquarie Library Pty Ltd, NSW

Keywords
EGCS marine transport
EGCS mooring
EGCS off-road
Energy grants (credits) scheme

Business Line:  Indirect Tax

Date of publication:  20 February 2004

ISSN: 1445-2782