ATO Interpretative Decision
ATO ID 2004/597 (Withdrawn)
Excise
Diesel Fuel Rebate Scheme: rail transport - road vehicles fitted with equipmentFOI status: may be released
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This ATO ID is withdrawn from the database because it contains a view in respect of the diesel fuel rebate provisions of the Excise Act 1901 and or the Customs Act 1901 that were repealed with effect from 1 July 2003.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.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 diesel fuel used 'in rail transport' under subsection 78A(1) of the Excise Act 1901 and subsection 164(1) of the Customs Act 1901 when the fuel is used in road vehicles fitted with equipment that operate on a fixed rail system for the purpose of moving passengers or goods?
Decision
Yes. Diesel fuel is used 'in rail transport' under subsection 78A(1) of the Excise Act and subsection 164(1) of the Customs Act when the fuel is used in road vehicles fitted with equipment that operate on a fixed rail system for the purpose of moving passengers or goods.
Facts
An entity operates a number of road vehicles that have been fitted with equipment that enables the vehicles to travel on rails.
When the equipment is engaged, the vehicle is controlled by the direct influence of the rails on the wheels and the bogies or wheel-sets under the vehicle.
The vehicles are used to move passengers or goods.
Reasons for Decision
Subsection 78A(1) of the Excise Act and subsection 164(1) of the Customs Act provide that:
A rebate is, ... payable to a person who purchases diesel fuel for use by him:
Subsection 78A(7) of the Excise Act states that the term 'rail transport' takes the same meaning as that provided by the Customs Act. 'Rail transport' is defined in subsection 164(7) of the Customs Act as follows.
... rail transport includes light rail transport and transport by tram, but does not include any rail transport relating to forestry.
The Administrative Appeals Tribunal (AAT) in Re Serco Australia Pty Ltd and Commissioner of Taxation [2003] AATA 737; (2003) 76 ALD 223 found at paragraph 56 that:
... rail transport in the sense that we understand it to be used in the Excise Act is the conveyance of passengers or freight by vehicles on a fixed rail system. The wheels on the vehicles may, or may not, be made of steel and may be made of a material such as rubber. The vehicles are controlled by the direct influence of the rails on the wheel and the bogies or wheelsets located under the vehicle.
In this instance, the road vehicles that are fitted with equipment operate on a fixed rail system for the purpose of moving passengers or goods. The vehicles are controlled by the direct influence of the rails on the wheel and the bogies or wheelsets located under the vehicle. Therefore all the necessary elements of rail transport identified by the AAT are present.
The meaning of 'in' in the context of the expression 'in mining operations' was discussed in Chief Executive Officer of Customs v. WMC Resources Ltd (as agent for East Spar Alliance) (1998) 87 FCR 482. Nicholson J expressed the view that:
The word 'in' as it appears in para (a) of the definition of 'mining operations' is to be understood in this context as 'inclusion within, or occurrence during the course of '...
He then referred to the Full Federal Court decision in Chief Executive Officer of Customs v. Dyno Wesfarmers Limited (1997) 73 FCR 1, at page 5. In that case, the Court referred to the Shorter Oxford English Dictionary where the meaning of 'in' refers to 'in the process or act of'.
Having regard to those decisions, diesel fuel is used in rail transport when it is used in the process or act of, or during the course of 'rail transport'.
As all the necessary elements of rail transport are present, and the diesel fuel is being used 'in rail transport', diesel fuel is used 'in rail transport' under subsection 78A(1) of the Excise Act and subsection 164(1) of the Customs Act when the fuel is used in road vehicles fitted with equipment that operate on a fixed rail system for the purpose of moving passengers or goods.
Date of decision: 25 June 2004
Legislative References:
Excise Act 1901
paragraph 78A(1)(ab)
subsection 78A(7)
paragraph 164(1)(ab)
subsection 164(7)
Case References:
Serco Australia Pty Ltd v. Commissioner of Taxation
[2003] AATA 737
(2003) 76 ALD 223
(1998) 87 FCR 482 Chief Executive Officer of Customs v. Dyno Wesfarmers Limited
(1997) 73 FCR 1
Keywords
DFRS rail
Diesel fuel rebate scheme
ISSN: 1445-2782
| Date: | Version: | |
| 25 June 2004 | Original statement | |
| You are here | 8 January 2010 | Archived |
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