ATO Interpretative Decision
ATO ID 2004/334 (Withdrawn)
Excise
Energy Grants Credits Scheme: off-road credit - agriculture - live-stock - breeding horses for blood serumFOI status: may be released
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This ATO ID is withdrawn from 1 July 2012, the date the Energy Grants (Credits) Scheme Act 2003 was repealed.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.
Status of this decision: Decision Withdrawn 1 July 2012
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Are horses which are bred for blood serum 'live-stock' for the purposes of subsection 23(2) of the Energy Grants (Credits) Scheme Act 2003 (EGCSA)?
Decision
No. Horses which are bred for blood serum are not 'live-stock' for the purposes of subsection 23(2) of the EGCSA.
Facts
The client breeds horses to sell their blood for medical and veterinary purposes.
Reasons for Decision
Section 53 of the EGCSA provides that a claimant is entitled to an off-road credit if they purchase diesel fuel for a use by them that qualifies, including 'agriculture'.
'Agriculture' is defined in subsection 22(1) of the EGCSA to mean:
... (c) the rearing of live-stock; ...
The term '
live-stock
' is defined in section 4 of the EGCSA as having a meaning 'affected by subsection 23(2) of the EGCSA'. Subsection 23(2) defines live-stock in the following terms:
The expression
live-stock
includes any animal reared for the production of food, fibres, skins, fur or feathers, or for its use in the farming of land.
We consider that subsection 23(2) of the EGCSA affects the meaning of live-stock in two ways.
Firstly, it clarifies that the term includes any animal which accords with the ordinary meaning of the term live-stock. The ordinary meaning of 'live-stock' according to The Macquarie Dictionary, 2001, rev. 3rd edn, The Macquarie Library Pty Ltd, NSW is 'the horses, cattle, sheep, and other useful animals kept or bred on a farm or ranch.
Secondly, subsection 23(2) of the EGCSA limits the definition by requiring that the animal be reared for the production of food, fibres, skins, fur or feathers, or for its use in the farming of the land.
The word 'includes', used in the definition of live-stock, has been considered in numerous cases (see: Re Proprietary Articles Trade Association of South Australia Inc. [1949] SASR 88; Lippett v. Robertson [1953] SASR 13; In the Estate of Nicholas [1955] VLR 291; Cuisenaire v. Reed (1962) 5 FLR 180; YZ Finance Co. Pty Ltd v. Cummings (1964) 109 CLR 395; Cohns Industries Pty Ltd v. DFC of T 79 ATC 4243; (1979) 9 ATR 759; Marsal Pty Ltd & Ors v. Comptroller of Stamps (Vic) (1982) 82 ATC 4536).
In some instances, the term 'includes' is used as an extension of the thing defined or described and at other times to provide clarification. In the definition of agriculture in the EGCSA, the expression is used in a variety of constructions, and each activity in which it is used must be examined separately to see the sense in which it is used. It is often used to simply make clear what the particular activity or definition intends to cover.
In the context of the definition of 'live-stock' in subsection 23(2) of the EGCSA, the term 'includes' clarifies but does not expand the meaning of live-stock. It clarifies that only those animals that are reared for the production of food, fibres, skins, fur or feathers, or for their use in the farming of land qualify as live-stock for the purposes of the EGCSA. This is supported by Hemens (Valuation Officer) v. Whitsbury Farm and Stud Ltd and other appeals [1987] ER 430 (Hemens).
In Hemens, a definition of 'live-stock' similar to the definition of 'live-stock' in the EGCSA was considered. Balcombe LJ at 449 stated that the definition of live-stock, in the context of the provision being discussed, did not include racehorses. He came to this conclusion because the words of the relevant Act were 'any creature kept for the production of food, wool, skins or fur, or for the purpose of its use in the farming of land' and these words would not have been used if the word 'livestock' was intended to cover the keeping of any creature whether for its use in farming land or not. He believed that these words show a clear intention that 'live-stock' does not extend to the breeding and keeping of horses unless it is for the purpose of their use in the farming of land.
The comments made by Balcombe L.J. in Hemens apply equally to the definition of 'live-stock' in subsection 23(2) of the EGCSA. Therefore, in the context of section 23, the term 'live-stock' means any animal kept for the production of food, fibres, skins or fur, or for its use in the farming of land.
As the horses in this instance are bred for their blood, rather than for the production of food, fibres, skins, fur or feathers, or for their use in farming the land, they are not livestock for the purposes of subsection 23(2) of the EGCSA.
Date of decision: 24 March 2004
Legislative References:
Energy Grants (Credits) Scheme Act 2003
section 53
subsection 22(1)
subsection 23(2)
Case References:
Re Proprietary Articles Trade Association of South Australia Inc.
[1949] SASR 88
[1953] SASR 13 In the Estate of Nicholas
[1955] VLR 291 Cuisenaire v. Reed
(1962) 5 FLR 180 YZ Finance Co. Pty Ltd v. Cummings
(1964) 109 CLR 395 Cohns Industries Pty Ltd v. DFC of T
79 ATC 4243
(1979) 9 ATR 759 Marsal Pty Ltd & Ors v. Comptroller of Stamps (Vic)
(1982) 82 ATC 4536 Hemens (Valuation Officer) v. Whitsbury Farm and Stud Ltd and other appeals
[1987] ER 430 Related ATO Interpretative Decisions
ATO ID 2004/221
Other References:
The Macquarie Library Pty Ltd, NSW 2001, rev. 3rd edn, The Macquarie Library Pty Ltd, NSW
Keywords
Energy grants (credits) scheme
EGCS off-road
EGCS agriculture
EGCS rearing of livestock
EGCS livestock
ISSN: 1445-2782
| Date: | Version: | |
| 24 March 2004 | Original statement | |
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