ATO Interpretative Decision
ATO ID 2005/292
Excise
Energy Grants Credits Scheme - Definition of state or territory authorityFOI status: may be released
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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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 a statutory government owned corporation (GOC) a 'State or Territory authority' as defined in section 4 of the Energy Grants (Credits) Scheme Act 2003 (EGCSA)?
Decision
Yes. A statutory GOC is a 'State or Territory authority' as defined in section 4 of the EGCSA.
Facts
The entity is a statutory GOC.
The entity is a utility that provides an essential service to customers including irrigators, water boards, local governments, power stations, and mining, industrial and manufacturing companies.
The entity gained its GOC status through state government enactments.
The GOC's shareholders are government Ministers and dividends are paid to them on behalf of the relevant state government.
Reasons for Decision
The term 'State or Territory authority' is defined in section 4 of the EGCSA as follows:
State or Territory authority means:
- (a)
- an instrumentality of a State or Territory; or
- (b)
- an authority or body established for the purpose of a State or Territory by or under a law of the State or Territory
The meanings of the terms 'authority' and 'public authority' were considered in Re NSW Grains Board; (Smith as administrator of the NSW Grains Board) v. Lawrence [2002] NSWSC 913). It was held that, among other things, for an entity to be an authority it was necessary for it to perform a traditional or inalienable function of government and have government authority for doing so. To be a 'public authority', it was held that an entity must be authorised to exercise power or command and it cannot be a private body established for profit.
In this instance, the entity provides services that are of critical importance to customers including irrigators, water boards, local governments, power stations, and mining, industrial and manufacturing companies. The government has, via enabling legislation, given the entity the power to perform a traditional or inalienable function of government.
The entity is not a profit making entity in the usual commercial sense. Although it has shareholders, who receive dividends, these dividends are received on behalf of the relevant state government.
Given these factors, it is clear that the entity is an authority established for the purpose of a State or Territory by or under a law of the State or Territory. Therefore, the requirements of the definition of the term 'State or Territory authority' in section 4 of the EGCSA are satisfied.
Even if the entity were not an authority, the definition of the term 'State or Territory authority' in section 4 of the EGCSA extends to bodies established for the purpose of a State or Territory by or under a law of the State or Territory. The term 'body' is broad and not limited to any particular type of entity or organisational structure. The above discussion has already established that the entity was established for the purpose of a State pursuant to a law of that State. Given the broad meaning of the term 'body', the entity would clearly meet the definition of a 'State or Territory authority', even if it were not an authority.
Accordingly, a statutory GOC is a 'State or Territory authority' as defined in section 4 of the EGCSA.
Date of decision: 4 October 2005
Legislative References:
Energy Grants (Credits) Scheme Act 2003
section 4
Case References:
Re NSW Grains Board (Smith as administrator of the NSW Grains Board) v. Lawrence
[2002] NSWSC 913
Keywords
Energy grants (credits) scheme
ISSN: 1445-2782
| Date: | Version: | |
| You are here | 4 October 2005 | Original statement |
| 1 July 2012 | Archived |
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