ATO Interpretative Decision

ATO ID 2003/432 (Withdrawn)

Excise

Diesel Fuel Rebate Scheme: Marine Transport - demonstration of vessels
FOI status: may be released

This ATO ID is withdrawn from the database because it contains a view in respect of the diesel fuel rebate provisions of the Excise Act 1901 and or the Customs Act 1901 that were repealed with effect from 1 July 2003. Despite its withdrawal from the database, this ATO ID continues to be a precedential view in respect of decisions for fuel purchased before 1 July 2003.

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 the demonstration of vessels to prospective purchasers 'marine transport' as defined in subsection 164(7) of the Customs Act 1901?

Decision

Yes. The demonstration of vessels to prospective purchasers is 'marine transport' as defined in subsection 164(7) of the Customs Act.

Facts

A client carries on an enterprise operating a dealership selling pleasure craft.

As part of that enterprise, the client takes vessels for test runs to demonstrate the performance and features of the vessel to potential purchasers.

Reasons for Decision

Paragraph 78A(1)(ac) of the Excise Act and paragraph 164(1)(ac) of the Customs Act provide that a rebate is payable to a person who purchases diesel fuel for use by the person 'in marine transport ... in the course of carrying on an enterprise'.

'Marine transport' is defined in subsection 164(7) of the Customs Act as:

marine transport includes transport by vessels in or on fresh water, but does not include any transport relating to forestry.

As the term 'marine transport' is not exhaustively defined under the legislation, the term should be given its ordinary and literal meaning as modified by the definition in subsection 164(7) of the Customs Act.

The Macquarie Dictionary, 2001, 3rd edn, The Macquarie Library Pty Ltd, NSW defines 'marine' as 'of or relating to the sea' and 'transport' as 'to carry or convey from one place to another'. Therefore, the common meaning of marine transport is to carry and convey passengers or goods by sea.

However, although an inclusive approach has been taken to defining 'marine transport', the approach does not extend the meaning of 'marine transport' beyond the actual transport of passengers or goods by vessels. The phrase is a means of ensuring that transport by vessels in or on fresh water is eligible for rebate.

Hence the definition of marine transport in the Customs Act is limited to the transport of passengers or goods by vessels. Use of a vessel that is:

(a): a necessary part of transport by that vessel; and
(b): incidental to transport by that vessel

forms part of 'marine transport' by that vessel.

Given this, it is necessary to determine whether the demonstration of vessels to prospective purchasers constitutes:

(a): transport of passengers or goods by vessels; or
(b): is a necessary part of transport by that vessel; and is incidental to transport by that vessel.

When the client takes the vessels for a test run to demonstrate the performance and features of the vessels to potential purchasers, the potential purchasers are passengers in the vessel.

Accordingly, the vessels are carrying passengers by sea. Consequently, in this instance, the demonstration of vessels to prospective purchasers is 'marine transport'.

Date of decision: 17 April 2003

Legislative References:
Customs Act 1901
paragraph 164(1)(ac)
subsection 164(7)

Excise Act 1901
paragraph 78A(1)(ac)

Related ATO Interpretative Decisions
ATO ID 2002/643
ATO ID 2003/433

Other References:
The Macquarie Dictionary, 2001, 3rd edn, The Macquarie Library Pty Ltd, NSW

Keywords
DFRS marine
Diesel fuel rebate scheme
Excise

Business Line: Excise

Date of publication: 6 June 2003

ISSN: 1445-2782

history

	Date:	Version:
	17 April 2003	Original statement
You are here	8 January 2010	Archived

Copyright notice

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).