ATO Interpretative Decision

ATO ID 2004/868 (Withdrawn)

Excise

• This ATO ID is withdrawn due to the repeal of Diesel and Alternative Fuels Grants Scheme Act 1991 as of 30 June 2002. Despite its withdrawal the ATO ID continues to be the precedential view in respect of off-road diesel fuel purchased before 1 July 2003 and for which a claim is made for an energy grant within 3 years of the purchase of the fuel.
  This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Where a client has purchased off-road diesel fuel prior to 1 July 2003 and made an application for an off-road diesel fuel rebate under the Excise Act 1901 for that portion of the fuel that was eligible for a rebate under that Act, does Schedule 7 of the Energy Grants (Credits) Scheme (Consequential Amendments) Act 2003 (the Consequential Amendments Act) allow the entity to claim an energy grant for the unclaimed portion of the fuel to the extent to which that portion is used in an eligible activity under the Energy Grants Credits Scheme Act 2003 (EGCSA)?

Decision

Yes. Where a client has purchased off-road diesel fuel prior to 1 July 2003 and made an application for an off-road diesel fuel rebate under the Excise Act for that portion of the fuel that was eligible for a rebate under that Act, Schedule 7 of the Consequential Amendments Act allows the entity to claim an energy grant for the unclaimed portion of the fuel to the extent to which that portion is used in an eligible activity under the EGCSA.

Facts

An entity purchased off-road diesel fuel prior to 1 July 2003 that they used for two purposes. The fuel is 'diesel fuel' on which duty has been paid for the purposes of the diesel fuel rebate scheme and 'off-road diesel fuel' for the purposes of the Consequential Amendments Act.

Only one of the purposes the fuel was used for was eligible for a diesel fuel rebate under the Excise Act, and the entity made an application accordingly.

The second purpose, while ineligible for a diesel fuel rebate under the Excise Act, is not a use mentioned in paragraph 53(4)(a) of the EGCSA as in force on 1 July 2003 and is eligible for an energy grant under the EGCSA.

The client has lodged a claim for an energy grant for this fuel. The claim was made within three years of the purchase of the fuel and meets all the requirements that need to be satisfied when making a claim for an energy grant.

Reasons for Decision

On 30 June 2003 the diesel fuel rebate scheme administered under the Excise Act and the Customs Act 1901 effectively ceased and was replaced by the energy grants credits scheme administered under the EGCSA.

The EGCSA came into effect on 1 July 2003 and applies to fuel purchased from that date for use in defined activities, including certain off-road uses of off-road diesel fuel.

The EGCSA replicates many of the entitlements that existed under the former diesel fuel rebate provisions of the Excise Act and Customs Act. However, some activities which were not eligible for a diesel fuel rebate are now eligible for a grant under the EGCSA.

Schedule 7 of the Consequential Amendments Act extends the EGCSA so that, in certain circumstances, an entity can claim an energy grant for off-road diesel fuel purchased or imported into Australia before 1 July 2003.

Subitems 1(1), 1(1A) and 1(2) of Schedule 7 of the Consequential Amendments Act state:

1.

Subject to subitem (1A) this item applies if, during the period from the beginning of 1 July 2000 until the end of 30 June 2003, an entity purchased or imported into Australia on-road diesel fuel, on-road alternative fuel or off-road diesel fuel, within the meaning of the Energy Grants (Credits) Scheme Act 2003 as in force on 1 July 2003 (including as affected by regulations under that Act commencing on that day).

(1A).

This item does not apply if:

(a)

the on-road alternative fuel is liquefied natural gas or biodiesel; or

(b)

the entity purchased or imported into Australia the off-road diesel fuel before 1 July 2002 for a use mentioned in paragraph 53(4)(a) of the Energy Grants (Credits) Scheme Act 2003 as in force on 1 July 2003.

2.

The Energy Grants (Credits) Scheme Act 2003 and regulations under that Act apply to fuel to which this item applies in the same way as they apply to on-road diesel fuel, on-road alternative fuel or off-road diesel fuel purchased or imported into Australia on 1 July 2003.

Note: The effect of subitem (2) will be to create entitlement to energy grants that, subject to subitem (3), can be claimed under section 15 of the Product Grants and Benefits Administration Act 2000. However, because of the claim period requirements in that section, a claim will not be able to be made more than 3 years after the actual time of purchase or importation of the fuel concerned.

Consequently, as the entity's claim does not relate to a use mentioned in paragraph 53(4)(a) of the EGCSA as in force on 1 July 2003, the entity is entitled to make a claim for energy grants provided that they meet the requirements of subitem 1(3) of Schedule 7 of the Consequential Amendments Act, and make any such claim within three years of the purchase of the fuel.

Paragraphs (b) and (c) of subitem 1(3) of Schedule 7 of the Consequential Amendments Act limit the circumstances in which a person can make an energy grant claim for fuel purchased prior to 1 July 2003. It provides that an entity is not entitled to claim an energy grant if:

... the entity has made an application (other than one that has been withdrawn) in respect of the same fuel under section 164 of the Customs Act 1901, including in its operation in accordance with item 25 of Schedule 3 to this Act...

or

the entity has made an application (other than one which as been withdrawn) in respect of the same fuel under section 78A of the Excise Act 1901, including its operation in accordance with item 18 of Schedule 4 to this Act.

Under the diesel fuel rebate scheme, a client was required to state on their application form (together with other information) the total number of litres for which they were claiming.

In this instance, the client has only submitted applications under the diesel fuel rebate scheme in respect of the litres that were used for eligible purposes under that scheme. Therefore, no applications were submitted in respect of fuel that was not eligible for a diesel fuel rebate, under either the Customs Act or the Excise Act.

Accordingly, the entity has not previously made an application for the diesel fuel that was used for an eligible purpose under the EGCSA.

Therefore, where a client has purchased off-road diesel fuel prior to 1 July 2003 and made an application for a diesel fuel rebate for that portion of the fuel that was eligible for a diesel fuel rebate under either the Customs Act or the Excise Act, Schedule 7 of the Consequential Amendments Act allows the entity to claim an energy grant for the unclaimed portion of the fuel to the extent to which that portion is used in an eligible activity under the EGCSA.

Legislative References:
Energy Grants (Credits) Scheme Consequential Amendments Act 2003
   subitem 1(1) of Schedule 7
   subitem 1(1A) of Schedule 7
   subitem 1(2) of Schedule 7
   subitem 1(3) of Schedule 7

Related ATO Interpretative Decisions
ATO ID 2004/839

Keywords
Diesel Fuel Rebate Scheme
Energy grants (credits) scheme
EGCS payments

Business Line:  Excise

Date of publication:  5 November 2004

ISSN: 1445-2782