ATO Interpretative Decision

ATO ID 2010/227 (Withdrawn)

Excise

Energy grants credits scheme: Off road - marine transport - whether a jet ski is a vessel
FOI status: may be released

This ATO ID is withdrawn from 1 July 2012, the date the Energy Grants (Credits) Scheme Act 2003 was repealed.
Despite its withdrawal, this ATO ID continues to be a precedential ATO view in respect of the period the Act was in force, 1 July 2003 up to and including 30 June 2012.

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

Status of this decision: Decision Withdrawn 1 July 2012

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 a jet ski a 'vessel' for the purposes of subsection 36(3) of the Energy Grants (Credits) Scheme Act 2003 (EGCSA)?

Decision

Yes. A jet ski is a 'vessel' for the purposes of subsection 36(3) of the EGSCA.

Facts

An entity hires out jet skis to customers for recreational purposes in the operation of their business.

The entity is registered for goods and services tax (GST).

The entity is operating a tourism business.

The jet skis each have a seating capacity of three persons.

The entity purchases fuel for use in the jet skis.

Reasons for Decision

Section 36 of the EGCSA sets out the meaning of 'use in marine transport'.

Subsection 36(3) of the EGCSA provides that the following constitutes 'use in marine transport':

(3) Use:

(a)
in a vessel, or in equipment in or on a vessel; and

(b)
while the vessel is in or on the sea or fresh water; and

(c)
for any of the purposes mentioned in subsection (4);

is use in marine transport .

Paragraph 36(4)(h) of the EGCSA relevantly provides the following eligible purpose:

(h): hiring out or chartering the vessel by a tourism business for use in fishing or other recreational activities.

Therefore use in a vessel while the vessel is in or on the sea or fresh water and for the purpose of hiring the vessel out by a tourism business for use in fishing or other recreational activities is 'use in marine transport'.

The term 'vessel' is not defined in the EGCSA so it is necessary to consider the ordinary meaning.

In The Macquarie Dictionary, rev. 3rd edn, 2001, The Macquarie Library Pty Ltd, NSW the term 'vessel' is defined as:

1.: a craft for travelling on water, now especially one larger than an ordinary rowing boat; a ship or boat.

The Australian Oxford Dictionary, 2nd edn, 2004, Oxford University Press, Melbourne relevantly defines a 'vessel' as:

2.: a ship or a boat, especially a large one.

While these definitions refer to size it is by no means definitive that a vessel must be of a particular size.

The term jet ski is defined in The Macquarie Dictionary, rev. 3rd edn, 2001, The Macquarie Library Pty Ltd, as:

1. a small powered vehicle that skims the water like a motorised water ski, with the driver standing, kneeling or sitting on the ski and steering by means of handles similar to motorbike handles.

[trademark]

As noted in The Macquarie Dictionary the term jet ski originated as a trademark. Rather than refer to 'jet skis' State and Territory legislation refers to personal watercraft when regulating the use and licensing of jet skis and other similar small craft.

In addition, the majority of States and Territories also provide for the regulation of small vessels hired out in the operation of a business, with such vessels defined as a 'hire and drive vessel' or 'hire and drive ship'. These hire and drive vessels generally include a personal watercraft such as a jet ski.

A personal watercraft is a vessel propelled by a motor that has a fully enclosed hull. It is operated by a person who either sits, stands or kneels on it.

Under the ordinary meaning a 'vessel' is a craft that travels on water, as such the definition would clearly include a personal watercraft.

Therefore, the Commissioner is of the view that a jet ski (or personal watercraft) is a 'vessel' for the purposes subsection 36(3) of the EGCSA.

Date of decision: 3 December 2010

Legislative References:
Energy Grants (Credits) Scheme Act 2003
   section 36
   subsection 36(3)
   paragraph 36(4)(h)

Other References:
Australian Oxford Dictionary, 2nd edn, 2004, Oxford University Press, Melbourne
The Macquarie Dictionary, rev. 3rd edn, 2001, The Macquarie Library Pty Ltd, NSW

Keywords
Energy grants (credits) scheme
EGCS off-road
EGCS marine transport
EGCS in a vessel

Business Line: Indirect Tax

Date of publication: 17 December 2010

ISSN: 1445-2782

history

	Date:	Version:
	3 December 2010	Original statement
You are here →	1 July 2012	Archived

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