ATO Interpretative Decision

ATO ID 2004/620 (Withdrawn)

Excise

Diesel Fuel Rebate Scheme: marine transport - travel by a dredge to and from dredging and disposal sites
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This ATO ID is withdrawn from the database because it contains a view in respect of the diesel fuel rebate provisions of the Excise Act 1901 and or the Customs Act 1901 that were repealed with effect from 1 July 2003.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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 operation of a dredge, whilst moving between port and a dredging site, and between the dredging site and a disposal site, 'marine transport' as defined in subsection 164(7) of the Customs Act 1901 for the purposes of the diesel fuel rebate scheme?

Decision

Yes. The operation of a dredge, whilst moving between port and a dredging site, and between the dredging site and a disposal site is 'marine transport' as defined in subsection 164(7) of the Customs Act for the purposes of the diesel fuel rebate scheme.

Facts

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

The dredge travels between a port and a dredging site and between the dredging site and a disposal site, where the dredged material is discharged.

While the dredge is travelling between the port and the dredging site and between the dredging site and the disposal site, the dredge uses diesel fuel to run non-dredging equipment on the dredge (for example the provision of electricity on the dredge).

Reasons for Decision

Subsections 78A(1) of the Excise Act 1901 and 164(1) of the Customs Act provide that:

A rebate is ... payable to a person who purchases diesel fuel for use by him: ...

(ac)
in marine transport (otherwise than for the purpose of propelling a road vehicle on a public road) in the course of carrying on an enterprise; ...

'Marine transport' is defined for the purposes of both Acts 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.

In Re Port of Brisbane Corporation and Deputy Commissioner of Taxation [2004] AATA 222 (Port of Brisbane), the Administrative Appeals Tribunal (the Tribunal) considered the meaning of 'marine transport' for the purposes of the diesel fuel rebate scheme, particularly in regard to the activities of dredging vessels.

In Port of Brisbane, the Tribunal reasoned at paragraph 31 that:

... the phrase "use in ... marine transport" should be accorded its ordinary and natural meaning. In this context, the normal association of "marine" with the sea is extended by the definition of "marine transport" in s164(7) to include freshwater. That same definition, which "includes transport by vessels in or on freshwater", while not an exhaustive definition because it is extending the ordinary meaning of "marine" to include an association not only with sea water but also with fresh water, nevertheless refers to transport by vessels.

And further at paragraph 32 that:

.... In the Tribunal's opinion, the key to the meaning of "marine transport" lies in the meaning of the word "transport". The Concise Macquarie Dictionary, 3rd ed, (1988) lists as the sixth meaning of transport:

6.
a means of transporting, as a ship, truck or plane used for transporting soldiers or military stores, or convicts.

The first meaning of transport in the Oxford English Dictionary is:

1.
the action of carrying or conveying a thing or person from one place to another, conveyance.

The use of the word "transport" in the phrase "marine transport" suggests a conveyance - something which does the conveying - a vehicle or vessel or aircraft which moves through its particular medium (land, water, air) carrying a thing or person. The medium in this case is, of course, water. Thus, ... "marine transport" should in this instance be interpreted as meaning the act of conveying a thing...

The Tribunal then applied this definition of marine transport to conclude at paragraph 35 that:

... diesel used by the Corporation in powering the self-propelled trailer suction dredges in travelling to and from dredging operations or dump sites or used in towing the cutter suction or grab dredges to and from the dredging operations or dump sites should be considered as being used in marine transport because the diesel is being used to power a vessel conveying dredging machinery or the spoil generated by the dredging activities from one place to another. ...

In this case the dredge is conveying dredging machinery when it travels between the port and the dredging site. When the dredge travels between the dredging site and the disposal site, it is carrying dredged material generated by the dredging activities. Therefore, these activities are consistent with the activities held by the Tribunal to constitute 'marine transport'.

Accordingly, the operation of a dredge whilst travelling between a port and a dredging site and between a dredging site and a disposal site is 'marine transport' as defined in subsection 164(7) of the Customs Act for the purposes of the diesel fuel rebate scheme.

Also in Port of Brisbane, it was conceded that diesel fuel used to run non-dredging equipment on the dredge (for example, provision of electricity on the dredge) while the dredge is in transit would be characterised as 'use in marine transport'. Consequently the operation of a dredge whilst travelling between a port and a dredging site, and between the dredging site and a disposal site is 'marine transport' as defined in subsection 164(7) of the Customs Act for the purposes of the diesel fuel rebate scheme.

Date of decision: 23 July 2004

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

Customs Act 1901
   subsection 164(1)
   subsection 164(7)
   paragraph 164(1)(ac)

Case References:
Re Port of Brisbane Corporation and Deputy Commissioner of Taxation
55 ATR 1029

Related ATO Interpretative Decisions
ATO ID 2004/540
ATO ID 2004/541
ATO ID 2004/542

ATO Interpretative Decisions overturned by this decision
ATO ID 2002/643

Keywords
DFRS marine
Diesel fuel rebate scheme
Excise
Excise payments

Business Line: Excise

Date of publication: 30 July 2004

ISSN: 1445-2782

history

	Date:	Version:
	23 July 2004	Original statement
You are here	8 January 2010	Archived

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