ATO Interpretative Decision

ATO ID 2004/842 (Withdrawn)

Excise

• This ATOID was amended by adding the reference to the Energy Grants Credits Scheme (Consequential Amendments) Act 2003. Date of amendment 13 April 2010.
  This ATO ID is withdrawn from 1 July 2012, the date the Energy Grants (Credits) Scheme Act 2003 was repealed.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

Does a charter bus itinerary constitute an eligible journey for the purposes of section 9 of the Energy Grants (Credits) Scheme Act 2003 (EGCSA), where the bus:

•

starts outside the metropolitan area, moves into the metropolitan area, drops passengers off and travels to a depot for a short period of time; and then

•

leaves the depot, picks up the passengers, continues its advertised charter through the metropolitan area, and returns to the start point outside the metropolitan area?

Decision

The charter bus itinerary constitutes two separate eligible journeys for the purposes of section 9 of the EGCSA. The bus has made two separate eligible journeys:

•

from a point outside the metropolitan area (the route start) to a point inside the metropolitan area (the depot), and

•

from a point inside the metropolitan area (the depot) to a point outside the metropolitan area (the route end).

Facts

An entity operates a charter bus enterprise. The relevant bus is an eligible vehicle for the purposes of subsection 43(1) of the EGCSA.

The bus is operated on an advertised day charter service. The charter starts outside the metropolitan area and travels into the metropolitan area. At the first stop of the charter the passengers temporarily leave the bus. As the bus cannot wait at the first drop-off point, it travels to a depot where it waits for a few hours. The bus then returns to the point at which the passengers left the bus, and they reboard the bus.

The bus then continues its advertised charter through the metropolitan area, and returns to the start point outside the metropolitan area.

Reasons for Decision

Subsection 43(2) of the EGCSA provides that an entity is entitled to an on-road credit if the entity uses diesel fuel in carrying on an enterprise in operating a vehicle on a road in Australia on a journey:

•

between a point outside the metropolitan areas and another point outside the metropolitan areas; or

•

between a point outside the metropolitan areas and a point inside a metropolitan area; or

•

between a point inside a metropolitan area and a point outside the metropolitan areas; or

•

between different metropolitan areas; or

•

an incidental use of the vehicle integral to one of the above activities.

Section 9 of the EGCSA defines what is meant by a 'journey'. Subsection 9(1) states that:

1)

The Commissioner may, in writing, determine that, if the operation of a vehicle between 2 points occurs in such circumstances as are ascertained in accordance with the determination, that operation is taken to be a journey in its own right...

Section 9 of the EGCSA must be read in conjunction with the Diesel and Alternative Fuels Grants Scheme (Journeys) Determination 2000 ED 2000/1 made under subsections 10A(1) and 10A(2) of the Diesel and Alternative Fuels Grant Scheme Act 1999 which remains applicable to the Energy Grants (Credits) Scheme. Although the DAFGS Act has been repealed ED 2000/1 is still effective due to Item 3 of Schedule 2 to the Energy Grants Credits Scheme (Consequential Amendments) Act 2003.

Part 5 of ED 2000/1 deals with buses on an advertised charter. It states:

(1)

The operation of a bus on an advertised charter or scheduled service, is not taken to be a journey if:

(a)

the route start and route end are inside the same metropolitan area; and

(b)

the route of the service does not extend beyond that metropolitan area.

(2)

The operation of a bus, on an advertised charter or scheduled service, is taken to be a journey in its own right if it is not described in subsection (1).

Part 2 of ED 2000/1 explains that:

•

a route start is the starting point of the route of an advertised charter or scheduled bus service; and

•

a route end is the end point of the route of an advertised charter or scheduled bus service.

In this case, the effect of Part 2 and Part 5 of ED 2000/1 is that the route start and route end are outside the metropolitan area where the day charter begins and ends.

Accordingly, the charter bus itinerary constitutes two separate eligible journeys for the purposes of section 9 of the EGCSA. The bus has made two separate eligible journeys:

•

from a point outside the metropolitan area (the route start) to a point inside the metropolitan area (the depot), and

•

from a point inside the metropolitan area (the depot) to a point outside the metropolitan area (the route end).

Legislative References:
Diesel and Alternative Fuels Grant Scheme Act 1999
   subsection 10A(1)
   subsection 10A(2)

Other References:
Diesel and Alternative Fuels Grants Scheme (Journeys) Determination 2000 ED 2000/1
Part 2
Part 2.1(4)
Part 5

Keywords
EGCS bus journeys
EGCS metropolitan areas
EGCS on-road

Business Line:  Indirect Tax

Date of publication:  25 October 2004

ISSN: 1445-2782