ATO Interpretative Decision

ATO ID 2004/747

Excise

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

Issue

Is a health retreat an 'other institution providing medical or nursing care' for the purposes of paragraph 53(4)(c) of the Energy Grants (Credits) Scheme Act 2003 (EGCSA)?

Decision

No. A health retreat is not an 'other institution providing medical or nursing care' for the purposes of paragraph 53(4)(c) of the EGCSA.

Facts

An entity operates a health retreat business. It can accommodate a small number of guests, and has various guest facilities, treatment rooms, offices and a workshop. The workshop is used for welding and machinery repair.

Staff live on-site and perform the roles of business manager, manager, chef, programme co-ordinator, and therapist. The health retreat does not provide the services of doctors or nurses to its guests.

The health retreat offers non-compulsory programs and treatments for guests, ranging from health recovery needs (for example immune booster and massage treatments) to general fitness and lifestyle (for example weight management and quit smoking). These treatment programs require a low level of care.

Reasons for Decision

Section 53 of the EGCSA provides that, subject to the conditions and restrictions specified in the Energy Grants (Credits) Scheme Regulations 2003, an entity is entitled to an off-road credit if they purchase or import into Australia off-road diesel fuel for a use by them that qualifies.

Subsection 53(4) of the EGCSA lists a number of uses that qualify. One use, set out in paragraph 53(4)(c) is:

(c)

use at a hospital or nursing home or at any other institution providing medical or nursing care.

As the terms used in paragraph 54(4)(c) are not defined in the legislation and have not been discussed in case law, it is necessary to turn to the ordinary meanings of the phrases in question as they are to be understood in the context of the intent of the legislation. The Macquarie Dictionary, 2001, rev. 3rd edn, The Macquarie Library Pty Ltd, NSW (Macquarie Dictionary) contains the following definitions.

'Hospital' noun:

1.

an institution in which sick or injured persons are given medical or surgical treatment

'Nursing home' noun:

a nursing residence equipped for the care of patients who have chronic or terminal diseases, or who are handicapped in some way

'Institution' is relevantly defined as:

1.

an organisation or establishment for the promotion of a particular object; usually one for some public, educational, charitable, or similar purpose.

2.

a building used for such work, as a college, school, hospital, mental hospital, or the like.

It is considered that the relevant definition of 'institution' in this context is that contained in number 2 above, because paragraph 53(4)(c) of the EGCSA refers to use 'at' a hospital or nursing home, and so on. Therefore, the first dictionary definition, which focuses on the organisation, rather than a specific place, is not considered relevant.

'Medical' is relevantly defined as:

of or relating to the science or practice of medicine

'Medicine' is relevantly defined as:

2.

the art or science of restoring or preserving health or due physical condition, as by means of drugs, surgical operations or appliances, manipulations, etc. (often divided into medicine proper, surgery and obstetrics)4. the medical profession

'Nursing' is relevantly defined as:

7.

to tend in sickness or infirmity

The ejusdem generis principle (of the same kind or nature) means that where particular words are followed by general words, the general words are limited to the same kind as the particular words. That is, the general phrase 'other institution providing medical or nursing care' must be interpreted having regard to the preceding words 'hospital or nursing home.'

'Medical care' is that provided by medical practitioners, that is, doctors. In Australia, a person wishing to practice as a doctor must be registered by completing an accredited course. Applying the ejusdem generis principle, it is considered that an 'other institution providing medical or nursing care' would provide the services of doctors or nurses to its guests, similar to the level of care available at hospitals and nursing homes.

Given the meaning of 'nursing' in the Macquarie Dictionary, the term 'nursing care' means tending to the sick or infirm (usually by people with nursing qualifications, but not necessarily so). Applying the ejusdem generis principle, an institution providing 'nursing care' would be expected to provide services to the sick or infirm, in a manner similar to a hospital or nursing home.

Given the above analysis of the meanings of institution, medicine and nursing, and applying the ejusdem generis principle, a place will be an 'other institution providing medical or nursing care' if it:

•

is a place at which the services of a doctor and or nurses are provided to patients

•

is of a recognisable size and structure that is identifiably similar to a hospital and nursing home, and

•

provides a level of care that is similar to that provided in hospitals and nursing homes.

The health retreat:

•

does not provide the services of doctors or nurses to its guests

•

has a size and structure that is recognisably different from that of a hospital or a nursing home, and

•

offers treatment programs which require a low level of care. Such a level of care is considerably less than (and distinguishable from) that provided by a hospital or nursing home.

Even if the health retreat provided some or all of the above services on occasion, it would be necessary to determine if the provision of the medical or nursing care is merely incidental to its primary purpose, or can rightly be viewed as being an institution that provides medical or nursing care. The fact that the words 'other institution that provides medical or nursing care' are preceded by the examples 'hospital or nursing home' suggests that it is insufficient that the health retreat may occasionally provide these services. A hospital or nursing home exists for the primary purpose of treating the sick or infirm. The health retreat, by contrast, exists primarily for some other purpose, as evidenced by the fact the health retreat's major services consist of non-compulsory programs and treatments for guests, ranging from health recovery needs (for example immune booster and massage treatments) to general fitness and lifestyle (for example weight management and quit smoking). These treatment programs require a low level of care. Therefore there is a clear distinction between the types of services primarily provided by a hospital or nursing home and those provided by the health retreat.

Accordingly, the health retreat is not an 'other institution providing medical or nursing care' for the purposes of paragraph 53(4)(c) of the EGCSA.

Legislative References:
Energy Grants (Credits) Scheme Act 2003
   section 53
   subsection 53(4)
   paragraph 53(4)(c)

Other References:
The Macquarie Dictionary, 2001, rev. 3rd edn, The Macquarie Library Pty Ltd, NSW

Keywords
EGCS off-road
EGCS use at other institutions

Business Line:  Indirect Tax

Date of publication:  10 September 2004

ISSN: 1445-2782