ATO Interpretative Decision

ATO ID 2004/466 (Withdrawn)

Excise

Energy Grants Credits Scheme: off-road - forestry - loading and unloading of logs at a log dump
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This ATO ID is withdrawn from 1 July 2012, the date the Energy Grants (Credits) Scheme Act 2003 was repealed.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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 the unloading and reloading of logs at a dump within the forest in which they were felled 'forestry' for the purposes of section 35 of the Energy Grants (Credits) Scheme Act 2003 (EGCSA)?

Decision

Yes. The unloading and reloading of logs at a dump within the forest in which they were felled is 'forestry' for the purposes of section 35 of the EGCSA.

Facts

The client is contracted to a harvesting company to manage a log dump in a forest where timber is felled.

Under the forest harvest plan, the forest is divided into coupes, each identified by a number and each harvest team is allocated a number of coupes to harvest.

During summer, the logs are felled in the coupes and snigged out of the coupe (pulled out by a bulldozer or tractors) to a log landing. The log landing is a place beside the road where the snigged logs are placed in readiness for loading onto a truck.

Once loaded onto trucks, the logs are delivered to a large dump within the forest in which the timber was felled. At the dump the client uses diesel powered excavators to unload the logs from the truck and place them in the log dump where they are stored until the winter months.

During the winter months, when it is too wet to cart timber directly from the coupes, the cartage contractors come back to the dump and the client reloads the logs onto the trucks so they can be taken to sawmills.

Reasons for Decision

Subsection 53(1) of the EGCSA says that you are entitled, subject to certain prescribed conditions, to an off-road credit if you purchase diesel fuel for a use by you that qualifies, including forestry. Forestry is relevantly defined in section 35 of the EGCSA 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;

and includes: ...

(c): the transporting ... in a forest or plantation, of timber felled in the forest or plantation; or...
(e): where the timber is milled at a sawmill or chipmill that is not situated in the forest or plantation in which the timber was felled - the transporting of the timber from the forest or plantation in which it was felled to the sawmill or chipmill.

Under paragraph 35(c) of the EGCSA the 'transporting ... of timber' refers to the conveying or carrying, in a forest or plantation, of felled timber from one place in the forest or plantation where the timber was felled to another place in the same forest or plantation, provided that the entire journey is undertaken entirely within the forest.

Therefore, the transporting of timber for the purposes of paragraph 35(c) of the EGCSA includes the transportation of the felled tree from the floor of the coupe to the log landing and then from the log landing to any other location within the forest (such as a sawmill, chipmill or log dump). The loading and the unloading of the vehicles used for transporting this timber is an integral part of the transportation activity, including in the situation (as here) where the loading and unloading is undertaken by an entity which does not own or operate the transport vehicle.

Similarly, the loading of logs at the log dump onto a transport vehicle, so that they can be transported to a sawmill situated outside the forest, is an integral part of the transportation activity described in paragraph 35(e) of the EGCSA.

Accordingly, the unloading and reloading of logs at a dump within the forest in which they were felled is 'forestry' for the purposes of section 35 of the EGCSA.

Date of decision: 7 May 2004

Legislative References:
Energy Grants (Credits) Scheme Act 2003
   section 35
   subsection 53(1)
   paragraph 35(c)
   paragraph 35(e)

Keywords
Energy grants (credits) scheme
EGCS off-road
EGCS forestry

Business Line: Indirect Tax

Date of publication: 4 June 2004

ISSN: 1445-2782

history

	Date:	Version:
	7 May 2004	Original statement
You are here	1 July 2012	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).