ATO Interpretative Decision

ATO ID 2004/542

Excise

• This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Are crew quarters on a vessel 'residential premises' as defined in subsection 164(7) of the Customs Act 1901 for the purposes of the diesel fuel rebate scheme if the crew quarters are only used for short shifts?

Decision

No. Crew quarters on a vessel are not 'residential premises' as defined in subsection 164(7) of the Customs Act for the purposes of the diesel fuel rebate scheme if the crew quarters are only used for short shifts.

Facts

An entity purchases diesel fuel that they use in operating a vessel.

The vessel uses diesel fuel to provide electricity for the crew quarters on the vessel, which include amenities such as a kitchenette, toilets and showers.

The crew work shifts of up to twelve hours, and remain on the vessel for the entire shift. However, when the shift ends and the vessel returns to berth, no crew members live on board.

Reasons for Decision

Paragraph 78A(1)(b) of the Excise Act 1901 and paragraph 164(1)(b) of the Customs Act provide that a rebate is payable to a person who purchases diesel fuel for use by them at residential premises to generate electricity to meet the domestic requirements of the residents of those premises.

'Residential premises' is defined, for the purposes of both Acts, in subsection 164(7) in the Customs Act as:

(a)

premises used as a house; or

(b)

other premises at which at least one person resides,

but does not include:

(c)

premises used in the business of a hotel, motel or boarding house or a similar business;...

In Collector of Customs v. Perkins Shipping Pty Ltd (1989) 24 FCR 520, the Full Federal Court considered that this definition of 'residential premises' can include the living quarters of vessels provided the requisite continuity of association exists between the vessel and crew to constitute the vessel as the crew's place of residence.

In coming to that conclusion, the Full Federal Court cited with approval the following passage from the judgment of Williams J in Koitaki Para Rubber Estates Pty Limited v. Federal Commissioner of Taxation (1941) 64 CLR 241; (1941) 6 ATD 82; (1941) 2 AITR 136:

The place of residence of an individual is determined, not by the situation of some business or property which he is carrying on or owns, but by reference to where he eats and sleeps and has his settled or usual abode. If he maintains a home or homes he resides in the locality or localities where it or they are situated, but he may also reside where he habitually lives even if this is in hotels or on a yacht or some other abode.

In this case, the employees are only on the vessel for a maximum of twelve hours while they are carrying out their work on that vessel and none stay on the vessel while it is in port at the end of the shift. Consequently, none of the crew can be said to have the crew quarters as their settled or usual abode.

Therefore, the requisite continuity of association necessary in order to regard the crew quarters as residential premises does not exist. It follows then, that crew quarters on a vessel are not 'residential premises' for the purposes of subsection 164(7) of the Customs Act for the purposes of the diesel fuel rebate scheme if the crew quarters are only used for short shifts.

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

Case References:
Collector of Customs v. Perkins Shipping Pty Ltd
   (1989) 24 FCR 520

Related ATO Interpretative Decisions
ATO ID 2003/241

Keywords
DFRS residential premises
Diesel fuel rebate scheme
Excise
Excise payments

Business Line:  Excise

Date of publication:  2 July 2004

ISSN: 1445-2782