ATO Interpretative Decision

ATO ID 2004/892 (Withdrawn)

Excise

Energy Grants (Credits) Scheme: off-road diesel fuel - natural gas
FOI status: may be released

This ATO ID is withdrawn due to amendments to the Energy Grants (Credits) Scheme Act 2003 applying after 30 June 2006. Despite its withdrawal the ATO ID continues to be the precedential view in respect of entitlement to an off-road credit for the period 1 July 2003 to 30 June 2006.

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

Status of this decision: Decision Withdrawn 30 April 2010

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 natural gas 'off-road diesel fuel' as defined in regulation 9 of the Energy Grants (Credits) Scheme Regulations 2003 (the Regulations) for the purposes of the Energy Grants (Credits) Scheme?

Decision

No. Natural gas is not 'off-road diesel fuel' as defined in regulation 9 of the Regulations for the purposes of the Energy Grants (Credits) Scheme.

Facts

An entity purchases natural gas for use in 'agriculture' as defined in section 22 of the Energy Grants (Credits) Scheme Act 2003 (EGCSA).

Reasons for Decision

Under the Energy Grants (Credits) Scheme, an entity is generally entitled to an Energy Grant if they are entitled to an off-road credit.

To be entitled to an off-road credit, the entity must purchase, or import into Australia, 'off-road diesel fuel' for use in one of the defined eligible activities, such as agriculture.

For the purposes of the EGCSA, 'off-road diesel fuel' is defined in regulation 9 of the Regulations.

Sub regulation 9(1) states that the following are off-road diesel fuel:

(a)

a product on which: ...

(ii): excise duty has been paid at a rate that is applicable to diesel fuel, under the Schedule to the Excise Tariff Act 1921, at the time of payment;

that is capable of being used as fuel in a diesel engine ...

Under the Schedule to the Excise Tariff Act 1921, two rates are given for diesel fuel, depending on the sulphur content of the diesel. Accordingly, natural gas will be considered to be 'off-road diesel fuel' if:

(a): excise duty has been paid on the product at either of the rates that apply to diesel fuel; and
(b): the product is capable of being used as a fuel in a diesel engine.

Under the Excise Act 1901 (Excise Act), excise duty is only imposed on excisable goods. Subsection 4(1) of the Excise Act defines 'excisable goods' as:

goods in respect of which excise duty is imposed by Parliament, and includes goods the subject of an Excise Tariff or Excise Tariff alteration proposed in the Parliament.

The Schedule to the Excise Tariff Act 1921 (the Schedule) outlines which goods are excisable, and the rate of duty levied on these goods.

Natural gas does not fall into any classification within the Schedule and therefore is not an excisable good. Consequently, natural gas is not a product on which excise duty has been paid at the rate that is applicable to diesel fuel under the Excise Tariff Act 1921 and therefore falls outside the definition of 'off-road diesel fuel' for the purposes of the Energy Grants (Credits) Scheme.

Date of decision: 4 November 2004

Legislative References:
Excise Act 1901
subsection 4(1)

Excise Tariff 1921
schedule

Energy Grants (Credits) Scheme Regulations 2003
Regulation 9

Related ATO Interpretative Decisions
ATO ID 2003/816

Keywords
EGCS off-road
EGCS off-road diesel
Energy grants (credits) scheme

Business Line: Excise

Date of publication: 19 November 2004

ISSN: 1445-2782

history

	Date:	Version:
	4 November 2004	Original statement
You are here →	30 April 2010	Archived

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