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Ruling

Subject: Non-commercial losses

Question

Is the Seeding Machine an eligible no-till seeder for the purposes of the Conservation Tillage Refundable Tax Offset?

Answer

Yes

This ruling applies for the following period

Year ended 30 June 2013

The scheme commenced on

1 July 2012

Relevant facts and circumstances

You are a primary producer and the manufacturer of the Seeding Machine.

The Seeding Machine has been certified by the Secretary of the Department of Agriculture as an eligible no-till seeder.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 385-235

Reasons for decision

Qualifying primary producers may be entitled to a refundable tax offset of 15% of the cost of an eligible no-till seeder (eligible seeder) used in conservation tillage farming practices.

The offset is only available for eligible seeders installed ready for use between 1 July 2012 and 30 June 2015. From 1 July 2015, the refundable tax offset will be repealed.

To be eligible you need to:

· hold the eligible seeder

· start to use, or install ready for use the eligible seeder in the course of carrying on a primary production business (the eligible seeder must not have been used previously, including by someone else)

· have a Research participation certificate from the Department of Agriculture, Fisheries and Forestry (DAFF).

Section 385-235 of the Income Tax Assessment Act 1997 (ITAA 1997) defines an eligible no-till seeder as a no-till seeder (comprising the tool or the combination of cart and tool) that is:

(a) a tine machine fitted with minimum tillage points designed to achieve minimum soil disturbance and less than full cut-out; or

(b) a disc opener with single, double or triple disc blades designed to achieve minimum soil disturbance and less than full cut-out; or

(c) a disc/tine hybrid machine fitted with:

(i) single, double or triple disc blades designed to achieve minimum soil disturbance and less than full cut-out; and

(ii) minimum tillage points designed to achieve minimum soil disturbance and less than full cut-out; or

(d) a disc/blade hybrid machine fitted with:

(i) single, double or triple disc blades designed to achieve minimum soil disturbance and less than full cut-out; and

(ii) blades designed to achieve minimum soil disturbance and less than full cut-out.

For the purposes of paragraph (a) and subparagraph (c)(ii), each of the following points are taken to be minimum tillage points designed to achieve minimum soil disturbance and less than full cut-out:

(e) narrow points;

(f) knife points;

(g) inverted "T" points.

Section 385-225 of the ITAA 1997 provides that if requested to do so by the Commissioner, the Agriculture Secretary may, by writing, certify that a specified asset is an eligible no-till seeder.

The Seeding Machine is an eligible no-till seeder meeting the criteria set out in subparagraph 385-235 (d)(ii) of ITAA 1997 as it has been certified as eligible by the Secretary of the Department of Agriculture.