ATO Interpretative Decision
ATO ID 2005/312 (Withdrawn)
Excise
Energy Grants (Credits) Scheme: off-road credits - agriculture - diesel fuel used in drying grainFOI 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This ATO ID is withdrawn from 1 July 2012, the date the Energy Grants (Credits) Scheme Act 2003 was repealed.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.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Is the drying of grain on the premises of a stockfeed manufacturer, a 'sundry agricultural activity' under section 27 of the Energy Grants (Credits) Scheme Act 2003 (EGCSA)?
Decision
No. The drying of grain on the premises of a stockfeed manufacturer is not a 'sundry agricultural activity' under section 27 of the EGCSA.
Facts
The client operates a manufacturing plant for bulk and bagged stockfeed. The client purchases grain and other agricultural produce from various farmers. The produce is delivered from the farms where it is grown to the client's manufacturing premises.
During the manufacturing process, the client processes the grain through a drier, which runs on diesel fuel. The drying is necessary to prevent deterioration when the moisture content is too high. The manufacturing plant is not located on an agricultural property.
Reasons for Decision
Off road credits, in the form of energy grants, are payable (subject to certain conditions) to persons who purchase off-road diesel fuel for use in various activities. One such eligible activity is primary production. The term 'primary production' is defined as including agriculture, which is in turn defined as including sundry agricultural activities.
The activities that are encompassed by the term 'sundry agricultural activity' are listed in section 27 of the EGCSA. One such activity, specified in paragraph 27(g) of the EGCSA, is the packing, or the prevention of deterioration, of the produce of a core agricultural activity, provided the following conditions are all satisfied:
- 1.
- the prevention of deterioration of the produce is carried out on an agricultural property where a core agricultural activity is carried on.
- 2.
- there is no physical change to the produce.
- 3.
- the prevention of deterioration of the produce does not constitute a processing of the produce.
The term 'core agricultural activity' is defined in section 31 of the EGCSA to mean:
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- the cultivation of soil,
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- the cultivation or gathering in of crops,
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- the rearing of livestock, or
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- viticulture, horticulture, pasturage or apiculture
provided the activity is carried out for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.
The drying of the grain takes place on the premises of the stockfeed manufacturer. The activity does not take place on an agricultural property where a core agricultural activity is carried on. Accordingly, the first requirement is not met.
As the first requirement of paragraph 27(g) of the EGCSA is not met, the activity is not a 'sundry agricultural activity' for the purposes of section 27 of the EGCSA.
Date of decision: 8 November 2005
Legislative References:
Energy Grants (Credits) Scheme Act 2003
section 27
section 31
paragraph 27(g)
Keywords
EGCS agriculture
EGCS off-road
EGCS off-road diesel
EGCS - prevention of deterioration of produce
ISSN: 1445-2782
| Date: | Version: | |
| 8 November 2005 | Original statement | |
| You are here | 1 July 2012 | Archived |