ATO Interpretative Decision
ATO ID 2010/75 (Withdrawn)
Excise
Energy grants credits scheme: off-road credit - marine transport - movement of material via a pipelineFOI 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This ATO ID is withdrawn from 1 July 2012, the date the Energy Grants (Credits) Scheme Act 2003 was repealed.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Status of this decision: Decision Withdrawn 1 July 2012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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Is the movement of material via an underwater pipeline 'marine transport' for the purposes of section 36 of the Energy Grants (Credits) Scheme Act 2003 (EGCSA)?
Decision
No. The movement of material via an underwater pipeline is not 'marine transport' for the purposes of section 36 of the EGCSA.
Facts
An entity conducts dredging activities and pumps material from the sea floor along a pipeline, which is on the sea floor or floating, to the shore.
The dredged material is initially pumped onto the dredge, and is then pumped from the dredge into a pipeline. Pumps along the pipeline convey the material along the pipeline. A pump is mounted on-shore to convey the material to the shore.
Reasons for Decision
Subsection 53(1) of the EGCSA states that an entity is entitled to an off-road credit if they purchase or import into Australia off-road diesel fuel for a use by them that qualifies for the off-road credit.
Subsection 53(3) of the EGCSA provides that use in marine transport, in the course of carrying on an enterprise is a use that qualifies for the off-road credit.
Section 36 of the EGCSA contains an extensive definition of the term 'marine transport', which encompasses the following broad categories:
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- use in a vessel in marine transport
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- use in a vessel for various purposes
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- use in a vessel on certain journeys
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- use of equipment in or on a vessel for various purposes
The common thread in relation to all of the broad categories of marine transport is the concept of a vessel. To qualify as marine transport, it is a fundamental requirement that fuel is used in a vessel, or in equipment in or on a vessel.
Accordingly it is necessary to determine the meaning of the term 'vessel' in the context of the EGCSA.
The term 'vessel' is not defined in the EGCSA and we therefore consider the ordinary meaning having regard to the statutory context. 'Vessel' is defined in The Macquarie Dictionary, 2001, rev. 3rd edn, The Macquarie Library Pty Ltd, NSW as:
1.
a craft for travelling on water, now especially one larger than an ordinary rowing boat; a ship or boat.
...
The Macquarie Dictionary contains various other definitions, none of which are relevant in the context of marine transport.
A pipeline is not a craft, and does not travel on (or through) water. It is not similar to a ship or boat. Accordingly, a pipeline is not a vessel as that term is generally understood.
The meaning of marine transport was considered by the Federal Court in Port of Brisbane Corporation v. Deputy Commissioner of Taxation (2004) 140 FCR 375; [2004] FCA 1232; (2004) 57 ATR 545 (Port of Brisbane FC). Although Port of Brisbane FC considered the meaning of the term 'marine transport' from the viewpoint of the former Diesel Fuel Rebate Scheme (DFRS), the EGCSA which replaced that scheme, was intended to largely mirror the former scheme's entitlements.
In Port of Brisbane FC, Moore J. considered the meaning of the expression 'use... in marine transport' in section 164 of the Customs Act 1901 in relation to the DFRS. Moore J approved the construction given by the Administrative Appeals Tribunal (AAT) in Re Port of Brisbane Corporation and Deputy Commissioner of Taxation [2004] AATA 222; (2204) 55 ATR 1029 that
The use of the word "transport" in the phrase "marine transport" suggests a conveyance - something which does the conveying - a vehicle or vessel or aircraft which moves through its particular medium (land, water, air) carrying a thing or person. The medium in this case is, of course, water
. Thus, in the tribunal's opinion, "marine transport" should in this instance be interpreted as meaning the act of conveying a thing or a person from one place to another through or over water using some kind of vessel or vehicle.
Moore J. confirmed that the movement of material via a pipeline is not marine transport:
... the ordinary meaning of "marine transport" does not include the conveying of things via a pipe that is in, that is, passes through, water or floats on water. Otherwise, one can foresee it might be argued that the pumping of natural gas or oil from an off-shore drilling rig to shore via a pipeline could constitute "marine transport".
A pipeline is not akin to a ship or boat. Nor does it travel 'through its particular medium', as required by the AAT. Accordingly, a pipeline is not considered to be a vessel for the purposes of the EGCSA, and therefore the movement of material via an underwater pipeline is not 'marine transport' for the purposes of section 36 of the EGCSA.
Date of decision: 23 March 2010
Legislative References:
Energy Grants (Credits) Scheme Act 2003
section 36
subsection 36(2)
subsection 53(1)
subsection 53(3)
Case References:
Re Port of Brisbane Corporation v Deputy Commissioner of Taxation
(2004) 140 FCR 375
[2004] FCA 1232
(2004) 57 ATR 545
(2004) 55 ATR 1029
[2004] AATA 222
Other References:
The Macquarie Dictionary, 2001, rev. 3rd edn, The Macquarie Library Pty Ltd, NSW
Keywords
EGCS in a vessel
EGCS marine transport
EGCS off-road
EGCS on vessel
EGCS unloading vessel
EGCS use
Energy grants (credits) scheme
ISSN: 1445 - 2782
| Date: | Version: | |
| 23 March 2010 | Original statement | |
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