ATO Interpretative Decision

ATO ID 2003/958 (Withdrawn)

Excise

Diesel Fuel Rebate Scheme: hospitality business - generation of electricity for staff residences
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This ATO ID is withdrawn from the database because it contains a view in respect of the diesel fuel rebate provisions of the Excise Act 1901 and or the Customs Act 1901 that were repealed with effect from 1 July 2003.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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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

Can a person who uses diesel fuel at particular premises to generate electricity for use in the course of carrying on a hospitality business and for accommodation to staff claim diesel fuel rebate under the retail/hospitality category in paragraph 78A(1)(ad) of the Excise Act 1901 and corresponding paragraph 164(1)(ad) of the Customs Act 1901 for the portion of diesel fuel used to generate electricity for staff accommodation?

Decision

Yes. A person who uses diesel fuel at particular premises to generate electricity for use in the course of carrying on a hospitality business and for accommodation to staff can claim diesel fuel rebate under the retail/hospitality category in paragraph 78A(1)(ad) of the Excise Act and corresponding paragraph 164(1)(ad) of the Customs Act for the portion of diesel fuel used to generate electricity for staff accommodation.

Facts

The client carries on a retail/hospitality business. The client purchases diesel fuel for use in generating electricity for use within the boundaries of the retail/hospitality business, including staff accommodation.

The retail/hospitality business (including the staff residences) does not have ready access to a commercial supply of electricity.

Reasons for Decision

Schedule 1 of the Diesel Fuel Rebate Scheme Amendment Act 2002 inserted paragraph 78A(1)(ad) into the Excise Act and made corresponding amendments to the Customs Act.

This paragraph extends the off-road diesel fuel rebate scheme to provide for a payment of rebate to a person who purchases diesel fuel for use by them at particular premises to generate electricity for use in the course of carrying on, at those premises, an enterprise that:

•: has, as its principal purpose, the retail sale of goods or services or the provision of hospitality, and
•: does not have, at those premises, ready access to a commercial supply of electricity.

The extension of the diesel fuel rebate scheme only applies in respect of diesel fuel purchased on or after 1 July 2002.

It is accepted that the client:

(a): purchases diesel fuel for use in generating electricity, and
(b): does not have, at the retail/hospitality business (including the staff residences), ready access to a commercial supply of electricity.

It is also accepted that the principal purpose of the enterprise is the retail sale of goods and services and the provision of hospitality.

Example 1.1 of the Explanatory Memorandum to the Diesel Fuel Rebate Scheme Amendment Bill 2002, states that:

South Seas Pty Ltd operates a tourist resort in a remote part of Western Australia that does not have a ready access to a commercial supply of electricity. It uses diesel fuel to generate power for its own use in van sites, motel accommodation, a retail store and residential accommodation...

South Seas Pty Ltd is eligible for a rebate for diesel fuel used to generate electricity for its own business including the residential accommodation, as the principal purpose of its enterprise is the provision of hospitality services...

This indicates that the carrying on of an enterprise which has, as its principal purpose the provision of hospitality, can include the provision of residential accommodation for the staff, provided that accommodation can still be regarded as 'at' the premises where the diesel fuel is used and the enterprise is carried on.

In this instance, as the staff accommodation is within the bounds of the hospitality/retail business, it is 'at' the premises where the diesel fuel is used and the enterprise is carried on.

Date of decision: 2 October 2003

Legislative References:
Excise Act 1901
paragraph 78A(1)(ad)

Customs Act 1901
paragraph 164(1)(ad)

Diesel Fuel Rebate Scheme Amendment Act 2002
Schedule 1

Related ATO Interpretative Decisions
ATO ID 2003/959
ATO ID 2003/960

Other References:
Explanatory Memorandum to the Diesel Fuel Rebate Scheme Amendment Bill 2002

Keywords
DFRS generation of electricity
DFRS hospitality
Diesel fuel rebate scheme

Business Line: Excise

Date of publication: 31 October 2003

ISSN: 1445-2782

history

	Date:	Version:
	2 October 2003	Original statement
You are here	8 January 2010	Archived

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