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ATO Interpretative Decision

ATO ID 2007/44 (Withdrawn)

Excise

Energy Grants (Credits) Scheme: Off-road - forestry - tending of trees
FOI status: may be released
  • This ATO ID is withdrawn from 1 July 2012, the date the Energy Grants (Credits) Scheme Act 2003 was repealed.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.

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 fuel used in forestry for the purposes of section 35 of the Energy Grants (Credits) Scheme Act 2003 (EGCSA) when it is used in a tractor with a mounted mulcher to remove lateral growth from trees and remove ground vegetation in a forestry plantation?

Decision

Yes. Fuel is used in forestry for the purposes of section 35 of the EGCSA when it is used in a tractor with a mounted mulcher to remove lateral growth from trees and remove ground vegetation in a forestry plantation.

Facts

An entity operates a diesel-powered tractor with a mounted mulcher.

The entity removes lateral growth from the base of trees and ground vegetation within a forestry plantation.

The regular removal of this growth enables other machinery to spray and fertilise the trees as required.

The trees are in a plantation and are intended for felling.

Reasons for Decision

Section 35 of the EGCSA defines 'forestry', in part, as:

(a)
the planting or tending, in a forest or plantation, of trees intended for felling; or
(b)
the thinning or felling, in a forest or plantation, of standing timber;...

The entity's activities do not constitute the planting of trees. Nor do the entity's activities constitute the thinning or felling of standing timber.

The remaining issue to be determined is whether the use of the tractor constitutes the tending, in a forest or plantation, of trees intended for felling.

The Commissioner has considered the meaning of 'tending' for the purpose of section 35 of the ECGSA in Product Grants and Benefits Ruling PGBR 2005/1. Paragraph 94 of that Ruling states:

The 'tending of trees' means the undertaking of activities to ensure the survival of the trees or to enhance their growth, quality and vigour. 'Tending of trees' includes:

•
fertilising after planting;
•
spraying trees against pests and diseases;
•
eliminating weeds;
•
fire protection measures; and
•
watering.

Lateral growth and surrounding ground vegetation inhibit the access of machinery used to spray and fertilise the trees as required.

The regular removal of lateral growth from the base of trees and surrounding ground vegetation is an integral part of the systematic process of ensuring the trees are properly nurtured. Therefore, it is accepted that the use of the tractor in these activities constitutes the tending of trees intended for felling.

It follows that the use of the tractor in undertaking these activities constitutes 'forestry' for the purposes of section 35 of the EGCSA.

Date of decision:  26 February 2007

Legislative References:
Energy Grants (Credits) Scheme Act 2003
   section 35

Related Public Rulings (including Determinations)
Product Grants and Benefits Ruling PGBR 2005/1

Related ATO Interpretative Decisions
ATO ID 2004/267
ATO ID 2004/424

Keywords
EGCS forestry
EGCS off-road
EGCS planting or tending
Energy grants (credits) scheme
Excise
Excise payments

Business Line:  Indirect Tax

Date of publication:  2 March 2007

ISSN: 1445-2782

history
  Date: Version:
  26 February 2007 Original statement
You are here 1 July 2012 Archived

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