ATO Interpretative Decision

ATO ID 2004/890 (Withdrawn)

Excise

Energy Grants (Credits) Scheme: off-road use - agriculture - operation of heater in hothouses
FOI status: may be released

This ATO ID is withdrawn as it has been superseded by Product Grants and Benefits Ruling PGBR 2005/3

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

Status of this decision: Decision Withdrawn 2 September 2005

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Issue

Is diesel fuel used in 'horticulture' as defined in section 33 of the Energy Grants Credits Scheme Act 2003 (EGCSA) if the diesel fuel is used to heat hothouses in which vegetables are grown?

Decision

Yes. Diesel fuel is used in 'horticulture' as defined in section 33 of the EGCSA if the diesel fuel is used to heat hothouses in which vegetables are grown.

Facts

An entity operates a vegetable growing business. The vegetables are grown inside plastic hothouses.

During winter, the entity uses diesel fuel to power boilers to heat the hot houses at night in order to maintain a certain temperature within the hothouses, as well as for the purpose of frost abatement.

Reasons for Decision

Under the Energy Grants (Credits) Scheme, an entity is entitled to an off-road credit in the form of an energy grant if they purchase diesel fuel for use in certain defined activities, including 'primary production'. 'Primary production' is defined in section 21 of the EGCSA as meaning a number of activities including 'agriculture'. The term 'agriculture' is defined in section 22 of the EGCSA, which states in part:

(1)

...the expression 'agriculture' means:...

(d): ...horticulture...

Section 33 of the EGCSA then defines horticulture in the following terms:

The expression horticulture includes:

(a)
the cultivation or gathering in of fruit, vegetables, herbs, edible fungi, nuts, flowers, trees, shrubs or plants;...

The phrase 'cultivation .... of fruit, vegetables, herbs, edible fungi, nuts, flowers, trees, shrubs or plants' is not defined in the EGCSA. It therefore takes its ordinary meaning. The term cultivate is relevantly defined in The Macquarie Dictionary, 2001, rev. 3rd edn, The Macquarie Library Pty Ltd, NSW as:

1. to bestow labour upon (land) in raising crops; till; improve by husbandry...

3. to promote or improve the growth of (a plant etc) by labour and attention

Therefore, in the context of 'horticulture', the phrase 'cultivation...of fruit, vegetables etc' means to bestow labour on the land in raising this produce.

Where diesel fuel is used to power boilers to ensure a constant temperature within the hothouse where vegetables are grown, and to prevent frost within the hothouse, the diesel fuel is clearly being used in 'horticulture' as that term is defined in section 33 of the EGCSA.

Date of decision: 5 November 2004

Legislative References:
Energy Grants (Credits) Scheme Act 2003
   section 22
   section 33
   paragraph 33(a)

Related ATO Interpretative Decisions
ATO ID 2003/816

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

Keywords
EGCS agriculture
EGCS core agricultural activity
EGCS horticulture
EGCS off-road
Energy grants (credits) scheme

Business Line: Excise

Date of publication: 19 November 2004

ISSN: 1445-2782

history

	Date:	Version:
	5 November 2004	Original statement
You are here →	2 September 2005	Archived

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