ATO Interpretative Decision

ATO ID 2006/82 (Withdrawn)

Excise

• This ATO ID is withdrawn from the database because of amendments to the Energy Grants (Credits) Scheme Act applying after 30 June 2006. Despite its withdrawal from the database, this ATO Interpretative Decision continues to be a 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.

Issue

Does a health retreat have, as its principal purpose, the retail sale of goods or services (other than electricity) or the provision of hospitality for the purposes of paragraph 53(4)(a) of the Energy Grants (Credits) Scheme Act 2003 (EGCSA)?

Decision

Yes. A health retreat has, as its principal purpose, the retail sale of goods or services (other than electricity) or the provision of hospitality for the purposes of paragraph 53(4)(a) of the EGCSA.

Facts

The client 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 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 and generally occur over a couple of hours in the afternoon.

The health retreat does not have access to a commercial supply of electricity.

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)(a) of the EGCSA is:

(a)

use at particular premises to generate electricity for use in the course of carrying on, at those premises, an enterprise that:

(i)

has, as its principal purpose, the retail sale of goods or services (other than electricity) or the provision of hospitality; and

(ii)

does not have, at those premises, ready access to a commercial supply of electricity;

The terms 'retail sale' and 'hospitality' are not defined in the EGCSA and therefore take on their ordinary meanings. The Macquarie Dictionary, 2001, rev. 3rd edn, The Macquarie Library Pty Ltd, NSW defines these terms as follows:

Retail:

the sale of commodities to household or ultimate consumers, usu. in small quantities (opposed to wholesale)

'Hospitality' is then defined as:

the reception and entertainment of guests or strangers with liberality or kindness

As the health retreat is engaged in entertaining guests and selling various services to them, it is accepted that its principal purpose is the retail sale of goods or services or the provision of hospitality.

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

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

Keywords
Energy Grants Credits Scheme
EGCS use to generate electricity at a retail/hospitality enterprise
EGCS use to generate electricity for ready access

Business Line:  Excise

Date of publication:  24 March 2006

ISSN: 1445-2782