Draft Fuel Tax Ruling

FTR 2012/D1

Fuel tax: fuel tax credits for taxable fuel acquired or manufactured in, or imported into, Australia for use in carrying on an enterprise involving 'agriculture' as defined in section 43-15 of the Fuel Tax Act 2006

• Please note that the PDF version is the authorised version of this draft ruling.
  This document has been finalised by FTR 2012/1.

Preamble

What this Ruling is about

1. This draft Ruling explains an entity's^[1] entitlement to a fuel tax credit under the Fuel Tax Act 2006 (FT Act) for taxable fuel it acquires or manufactures in, or imports into, Australia to the extent that it does so for use in carrying on an enterprise, which involves activities that are within the meaning of 'agriculture' in Subdivision 43-B of the FT Act.

2. The Ruling also explains:

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the fuel tax credit system^[2] under the FT Act;

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the meaning of each of the activities in the definition of 'agriculture' in section 43-15 of the FT Act;

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the application of those provisions in the meaning of 'agriculture' that require that an activity be 'solely' for a purpose;

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the meaning of the expression 'gathering in of crops' in paragraph 43-15(1)(b) of the FT Act; and

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the meaning of public roads - and discusses roads that are not public roads.

3. Unless otherwise stated, all legislative references in this Ruling are to the FT Act.

Definitions

4. In this Ruling, unless otherwise stated:

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a reference to:

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'acquire taxable fuel' or 'taxable fuel acquired' is a reference to 'taxable fuel that you acquire or manufacture in, or import into, Australia';

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'core agricultural activity or activities' is a reference to paragraphs (a) to (d) of the definition of agriculture in subsection 43-15(1);

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'diesel fuel rebate scheme' is a reference to the diesel fuel rebate scheme as provided for in section 164 of the Customs Act 1901 and section 78A of the Excise Act 1901;

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'eligible activity or activities' is a reference to a use that qualifies for the purposes of section 43-15;

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'Energy Grants Act' is a reference to the Energy Grants (Credits Scheme) Act 2003;

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'energy grants scheme' is a reference to the energy grants credit scheme as provided for under the Energy Grants Act;

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'farm' is a reference to an agricultural property on which a core agricultural activity is carried on;

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'farmer' is a reference to an entity that carries on a core agricultural activity;

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'GST' is a reference to the goods and services tax;

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'GST Act' is a reference to the A New Tax System (Goods and Services Tax) Act 1999;

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'horticultural produce' is a reference to all or any one of, fruit, vegetables, flowers, herbs, edible fungi, nuts, trees, shrubs, plants, seeds, bulbs, corms, tubers or rhizomes grown, propagated or produced by horticulture;

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'you' in relation to provisions of the FT Act and the Fuel Tax (Consequential and Transitional Provisions) Act 2006 applies to entities generally, unless its application is expressly limited;^[3]

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'taxable fuel' is a reference to taxable fuel as defined in section 110-5 of the FT Act;

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'Transitional Act' is a reference to the Fuel Tax (Consequential and Transitional Provisions) Act 2006; and

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'transitional provisions' is a reference to the relevant provisions in Schedule 3 of the Transitional Act.

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it is assumed:

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that if you are entitled to a fuel tax credit you meet the requirements that entitle you to the credit and are not disentitled by the disentitlement rules^[4] in the FT Act;

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that if an entity is carrying on an enterprise of agriculture it is carrying on an enterprise in the form of a business^[5] which involve the activities that are within the meaning of agriculture; and

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that if an entity is not undertaking eligible activities in agriculture, that their use of taxable fuel does not satisfy any of the other circumstances giving rise to a nil carbon reduction amount.^[6]

5. In this Ruling, a reference to you being entitled to a fuel tax credit and having a nil carbon reduction amount assumes that the requirements of the FT Act (where relevant) are met.

Core agricultural activity

6. A number of the provisions within the meanings of activities included in the definition of agriculture refer to a person who carries on a core agricultural activity or an agricultural property where a core agricultural activity is carried on.

7. Section 43-55 defines the expression 'core agricultural activity' as meaning:

... an activity referred to in paragraph (a), (b), (c) or (d) of the definition of agriculture in subsection 43-15(1) if that activity is conducted for the purposes of, or for purposes that will directly benefit, a business conducted to obtain produce for sale.

8. A core agricultural activity is an activity undertaken in:

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the cultivation of the soil;

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the cultivation or gathering in of crops;

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the rearing of live-stock; or

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viticulture, horticulture, pasturage or apiculture,

provided the activity is carried out for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.

Carrying on a core agricultural activity

9. You carry on a core agricultural activity if you carry on one or more of the activities set out in paragraph 8 of this Ruling provided the activities are carried out for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.

Agricultural activities

10. Section 43-45 defines the term 'agricultural activity' as:

...an activity referred to in any one of the paragraphs of the definition of agriculture in subsection 43-15(1) (other than an activity referred to in paragraph (i) or (j) of the definition of sundry agricultural activity in section 43-40) if that activity is conducted for the purposes of, or for purposes that will directly benefit, a business conducted to obtain produce for sale.

11. The term 'agricultural activity' includes other activities which are discussed in section 43-20 to section 43-35 and paragraph 43-40(a) to paragraph 43-40(h).

Agricultural property

12. The term 'agricultural property' is used in sections 43-20 to 43-40. In some sections, reference is made to the 'agricultural property where the core agricultural activity is carried on'. In other sections, reference is made to the 'agricultural property'.

13. The term 'agricultural property' is not defined in the FT Act. Whether a property is an agricultural property is a matter of fact and degree having regard to the totality of the activities carried out on the property.

14. The Commissioner considers that an agricultural property is a property on which the activities of cultivation of the soil, the growing and gathering in of crops or the rearing of live-stock or a mixture of more than one of these activities are carried out, provided those activities are carried out for the purpose of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.^[7]

15. The term 'agricultural property' also includes a property on which cultivation of soil or of grapes as part of viticulture or of horticultural produce takes place provided those activities are carried out for the purpose of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.

16. It is not expected that every hectare of a farm will be used for a core agricultural activity at any one time. Some paddocks may remain fallow or uncleared, some may be devoted to dams and structures (for example, sheds and stockyards), and some land may be occupied by the owner's residence. The property and activities must be considered as a whole.

17. However, a property will not be an agricultural property, if the only agricultural activities conducted on the property are minor relative to the main use of the land.

18. In Re Raymond Cedric and Brian Richard Wallace v. CEO of Customs^[8] (Wallace), the applicant was contracted by a sanctuary to carry out certain earthworks associated with the construction of the first stage of a wetland. Approximately 35 to 40 hectares of the sanctuary was used to grow gum trees, which were sold as koala fodder. The applicant claimed a rebate under the diesel fuel rebate scheme, in respect of diesel fuel used in earthworks. To be eligible under the diesel fuel rebate scheme the activities had to be conducted on an agricultural property.

19. The AAT held that the growing of eucalyptus leaves was only a small part of the activities carried out within the sanctuary. Therefore, while the cultivation of eucalyptus leaves constituted a core agricultural activity, it was not carried out on an agricultural property. Deputy President Forgie SA said:

Taking into account the limitations in interpretation imposed by the Customs Act, I have concluded that the expression 'agricultural property' means a property on which there are carried out the activities of the cultivation of soil, the growing and gathering of crops or the rearing of livestock or of a mixture of more than one of these activities provided that those activities are carried out for the purpose of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.^[9]

20. The Commissioner considers that the comments made by the AAT in Wallace are equally applicable to the meaning of 'agricultural property' for the purposes of the fuel tax credit scheme (and therefore the fuel tax credit system).

'At a place adjacent to' an agricultural property

21. The phrase 'at a place adjacent to' an agricultural property is used in paragraphs 43-25(b), 43-25(d), 43-25(e), 43-30(b) and 43-40(d).

22. In these paragraphs, the word 'adjacent' takes its ordinary meaning of lying near, close or contiguous.^[10]

23. A place is adjacent if it is abutting, close or near, and is not distant or remote from the agricultural property. It is not possible to give precise measurements or distances between places to determine their adjacency. It is a question of fact and impression in each case as to whether a place is adjacent to the agricultural property.

24. In Federal Commissioner of Taxation v. BHP Minerals Ltd^[11] (BHP Minerals), the Court was called upon to decide whether residential accommodation was 'at a place adjacent to the site of prescribed mining operations'. In their majority judgment, Toohey and Lockhart JJ, in relation to the concept of adjacency, said:

In our view the inquiry as to the definition of the expression 'at a place adjacent to, the site of prescribed mining operations ...' calls for a broad approach and not one that is narrow or pedantic. ...The expression is not one which is capable of a precise or uniform meaning. ...

An ordinary and natural meaning of the word 'adjacent' is 'near' or 'close'. ...But to be provided at a place adjacent to the site of mining operations does not require contiguity or abutment. Nor does it necessarily require very close proximity. It is sufficient that it is near or close to the site.^[12]

25. The comments of Toohey and Lockhart JJ in BHP Minerals are relevant in determining the meaning of the phrase 'at a place adjacent to' an agricultural property for the purposes of the definition of agriculture in the FT Act.

First-mentioned agricultural activity

26. Some of the activities listed in the definition of agriculture are eligible only if they are conducted by an entity that carries on the first-mentioned agricultural activity or by an entity contracted by that entity. Examples include:

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searching for groundwater solely for use in an agricultural activity (paragraph 43-25(b));

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the pumping of water solely for use in an agricultural activity (paragraph 43-25(d));

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the supply of water solely for use in an agricultural activity (paragraph 43-25(e));

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the construction or maintenance of sheds, pens, silos or silage pits for use in an agricultural activity (paragraph 43-30(c)); and

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the service, maintenance or repair of vehicles or equipment for use in an agricultural activity (paragraph 43-40(e)).

27. The term 'first-mentioned agricultural activity' is interpreted as meaning the agricultural activity, usually a core agricultural activity, to which the activity outlined in the particular provision relates. For example, searching for groundwater, (this being the activity outlined in paragraph 43-25(b)), will be eligible if it is solely for use in another agricultural activity, such as rearing of live-stock (this being the 'first-mentioned agricultural activity'), and is undertaken by you in the rearing of live-stock activity, or an entity contracted by you or by a subcontractor.

Class of entities

28. This Ruling applies to the class of entities who acquire or manufacture in, or import into, Australia, taxable fuel to the extent they do so for use in carrying on an enterprise which involves activities that are within the meaning of 'agriculture' in section 43-15 of the FT Act.

How to read this Ruling

29. The Ruling section sets out the Commissioner's view on entitlement to fuel tax credits with a nil carbon reduction amount for taxable fuel acquired or manufactured in, or imported into,, Australia for use in carrying on an enterprise that involves activities within the meaning of 'agriculture'. As the references to agricultural activities in section 43-15 are similar to those that were eligible for diesel fuel rebate under the diesel fuel rebate scheme and the energy grants credit scheme, the Commissioner considers that the views expressed in FTR 2006/1 Fuel Tax Ruling Fuel tax: fuel tax credits for taxable fuel acquired or manufactured in, or imported into,, Australia for use in carrying on an enterprise involving 'agriculture' as defined in section 22 of the Energy Grants (Credit) Scheme Act 2003 apply equally to the meaning of agriculture in section 43-15. Accordingly the views and explanation which appeared in the FTR 2006/1 which was withdrawn from 1 July 2012 has been deliberately reproduced in this ruling.

30. If you desire a more detailed analysis and explanation of the issues covered in the Rulings section, you should refer to the Explanation section in Appendix 1 of this Ruling.

31. The Ruling is in this format so you can access more easily your specific areas of interest.

Ruling

General entitlement rules for a fuel tax credit

32. You are entitled to a fuel tax credit for taxable fuel that you acquire or manufacture in, or import into, Australia^[13] to the extent that you do so for use in carrying on your enterprise.^[14]

33. However, you are only entitled to the fuel tax credit if, at the time you acquire the taxable fuel, you are registered for GST, or required to be registered for GST.^[15] This is regardless of your turnover.^[16]

34. The fuel tax credit to which you are entitled is taken into account in calculating your net fuel amount. The net fuel amount must be calculated for each tax period. If your net fuel amount is a positive figure, you must pay this amount to the Commissioner. If the net fuel amount is a negative figure, the Commissioner must pay this amount to you.

35. Taxable fuel means fuel on which customs or excise duty is payable.^[17]

36. You must be 'carrying on an enterprise' within the meaning of section 9-20 of the GST Act to be able to claim a fuel tax credit. The expression 'carrying on an enterprise' includes doing anything in the course of the commencement or termination of the enterprise.^[18]

37. The words 'to the extent that' in subsection 41-5(1) allow for apportionment between a use that entitles you to a fuel tax credit and one that does not. You can use any fair and reasonable basis for working out the amount of taxable fuel in respect of which you are entitled to a fuel tax credit

38. The Commissioner's view is that the 'fair and reasonable' principle also applies in determining the extent of your entitlement to a fuel tax credit if the fuel is acquired for a number of uses, some of which qualify for a fuel tax credit and some of which do not.^[19]

Entitlement to fuel tax credits with a nil carbon reduction amount for fuel acquired for use 'in agriculture'

39. If you carry on an enterprise in agriculture and you acquire taxable fuel for use in an activity that is within the meaning of 'agriculture', in paragraphs 43-15(1)(a) to 43-15(1)(i) and the activity is not excluded from being a qualifying use by paragraphs 43-15(2)(a) and 43-15(2)(b) you are entitled to a fuel tax credit under section 41-5 of the FT Act.

40. The amount of your fuel tax credit entitlement for taxable fuel, acquired from 1 July 2012, for use in agriculture will have a nil carbon reduction amount applicable to it.

The form of the definition of 'agriculture': means, includes, does not include

41. The use of the expressions, 'means', 'includes' and 'does not include' in the definition of 'agriculture' in section 43-15 means that paragraphs 43-15(1)(e) to 43-15(1)(i) do not limit paragraphs 43-15(1)(a) to 43-15(1)(d). An activity that does not meet the specific requirements of any of paragraphs 43-15(1)(e) to 43-15(1)(i) may still be an activity that satisfies the requirements of one or more of paragraphs 43-15(1)(a) to 43-15(1)(d) and, if not excluded by subsection 43-15(2), may be an eligible activity.

42. An activity mentioned in subsection 43-15(1) (other than hunting or trapping carried on for the purposes of a business, including the storage of any carcasses from the hunting or trapping) is an eligible activity only if it is carried out for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.

Status of contractors and subcontractors

43. Where a farmer provides fuel for use by a contractor to carry out, for the farmer, an agricultural activity, as defined in section 43-45, and the activity is for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale, the farmer's entitlement to a fuel tax credit is not affected provided that the provision of fuel is not taken to be an acquisition of the fuel by the contractor.

44. A contractor or subcontractor is entitled to a fuel tax credit with a nil carbon reduction amount for taxable fuel they acquire for use in carrying on an agricultural activity as defined in section 43-45 provided the activity is for the purpose of, or for purposes that will directly benefit, a business undertaken to obtain, produce for sale.

Example 1: construction of a shed

45. Zeeland Grazing Enterprises Ltd (Zeeland) who carries on an enterprise as a pastoralist, contracts Big Sheds Pty Ltd (Big Sheds) to erect a new fodder shed on their farm. Big Sheds in turn engages Boots Concrete Ltd (Boots) to pour the concrete slab for the shed.

46. Big Sheds is entitled to a fuel tax credit with a nil carbon reduction amount for diesel fuel it purchases for use in the construction of the fodder shed.

47. Boots is entitled to a fuel tax credit with a nil carbon reduction amount for diesel fuel it purchases for use in pouring the concrete slab for the shed.

Replenishment by a farmer of fuel used in a contractor's plant or equipment

48. If you are a contractor and to carry out an agricultural activity for a farmer, you enter into a 'full on/full off' arrangement with the farmer (that is, you will replenish your plant or equipment with taxable fuel provided from the farmer's fuel supply) you are not entitled to a fuel tax credit for the fuel provided to you by the farmer. The Commissioner takes the view that you do not acquire fuel in these circumstances.

49. Under a full on/full off arrangement, a contractor is entitled to a fuel tax credit with a nil carbon reduction amount in respect of taxable fuel acquired by them for use in an eligible agricultural activity. This is the taxable fuel that they bring on to the farm in their plant or equipment. The farmer is entitled to a fuel tax credit with a nil carbon reduction amount in respect of taxable fuel acquired for use by that farmer in an eligible agricultural activity and that is used by a contractor in carrying out the agricultural activity on that farmer's agricultural property.

Example 2: 'full-on/full-off' arrangement

50. Big Harvesters Ltd (Big Harvesters) carries on an enterprise as a crop harvesting contractor. It agrees to harvest a field of wheat for Greenfarm Enterprises Ltd (Greenfarm). The agreement specifies that Big Harvesters will arrive on Greenfarm's property with a full tank of fuel in their combine harvester. All additional fuel required for the job will be provided by Greenfarm from the farm tank. At the end of the job, Big Harvesters is entitled to refill the combine harvester's tank prior to leaving the farm.

51. Big Harvesters is entitled to a fuel tax credit with a nil carbon reduction amount in respect of the taxable fuel it has acquired and used in harvesting the wheat for Greenfarm. This is the fuel that it brings onto the farm in its tank.

52. Greenfarm is entitled to a fuel tax credit with a nil carbon reduction amount for the taxable fuel that it has acquired for use in agriculture and that is used by Big Harvesters in the harvesting activity.

53. Greenfarm is not entitled to a fuel tax credit in respect of the taxable fuel it acquires to replenish Big Harvesters' combine harvester at the end of the agricultural activity. This taxable fuel is acquired by Big Harvesters for use in carrying on its enterprise and, if the fuel is subsequently used in an agricultural activity, Big Harvesters will be entitled to a fuel tax credit with a nil carbon reduction amount in respect of this fuel.

Activities that are agriculture

Cultivation of the soil

54. A nil carbon reduction amount will be applicable if you acquire taxable fuel for use in the cultivation of the soil provided the cultivation is carried out for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.

Cultivation or gathering in of crops

55. A nil carbon reduction amount will be applicable if you acquire taxable fuel for use in the cultivation or gathering in of crops provided the cultivation or gathering in is carried out for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.

Crop

56. The Commissioner takes the view that a 'crop' is the product of a harvest of cultivated plants, cereals, fruit and the like. The term 'crop' does not include goods produced from those harvested plants.

Gathering in of crops capable of being stored

57. In relation to crops that are capable of being stored, the 'gathering in' of the crop ceases when it is physically collected together for the first time on a farm.

58. If the crop is loaded directly from a harvester into a vehicle that will take it away for processing or permanent storage, the gathering in ceases once the crop has been fully loaded onto the vehicle for transport off the farm.

Gathering in of crops that cannot be stored

59. In relation to crops that are required to be processed soon after harvesting, that is, crops that cannot be stored (for example, parsley or sugar cane), the 'gathering in' of the crop ceases when it is physically collected together for the first time on a farm prior to its processing on or off the farm. If a crop is processed on the farm immediately after harvesting, the gathering in ceases when the crop is taken to the site of the processing plant or when it is first stockpiled ready for processing.

60. In some instances, a crop is taken directly by agricultural machinery (for example, a tractor and trailer combination) that is used as an integral part of the harvesting process from the field where it is grown to a processing plant or mill, or a central collection area located off the farm. In those cases, the crop is not gathered in until it is taken to the central collection area at the processing plant or mill or to another central collection area off the farm. However, this does not apply if the crop is taken from the farm to the processing plant or mill, or to another collection area off the farm, by vehicles.

Rearing of live-stock

61. A nil carbon reduction amount will be applicable if you acquire taxable fuel for use in the rearing of live-stock provided the rearing of live-stock is carried out for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.

62. For the purposes of paragraph 43-15(1)(c), rearing of live-stock means the breeding or raising of, and caring for, animals for the production of food, fibres, skins, fur or feathers, or for their use in the farming of land.

Viticulture

63. A nil carbon reduction amount will be applicable if you acquire taxable fuel for use in viticulture provided the viticulture is carried out for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.

Horticulture

64. A nil carbon reduction amount will be applicable if you acquire taxable fuel for use in horticulture provided the horticulture is carried out for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.

65. For the purposes of paragraph 43-15(1)(d), horticulture has its ordinary meaning, which is illustrated and expanded by section 43-65.

66. For the purposes of the fuel tax credit scheme, horticulture does not extend to the commercial manufacture of goods produced for use by others in horticulture.

Gathering in of horticultural produce

67. If the horticultural produce is not transported immediately after picking or harvesting, but is stored on the agricultural property, for the purposes of the fuel tax credit scheme, the 'gathering in' of the produce ceases when it is physically brought together for the first time. If the horticultural produce is transported immediately after picking or harvesting, the gathering in of the horticulture produce ceases when it is physically collected for the first time on the farm prior to its transport.^[20]

Pasturage

68. A nil carbon reduction amount will be applicable if you acquire taxable fuel for use in pasturage provided the pasturage is carried out for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.

69. Pasturage includes agistment activities. Agistment activities are 'agriculture' for the purposes of the fuel tax credit scheme, provided they are carried out for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.^[21]

Example 3: pasturage - agistment carried on as part of a farming business

70. Shep Herd Enterprises Ltd (Shep Herd) carries on an enterprise as a pastoralist. It runs a sheep station in northern New South Wales. Shep Herd has a number of paddocks that are superfluous to its current requirements. Shep Herd, for a fee, allows Baa Bar Ltd, a neighbouring sheep farmer affected by drought, to graze sheep on its paddocks.

71. Shep Herd's carbon reduction amount will be nil in respect of the diesel fuel it purchases for use in pasturage activities it undertakes. The agistment activity that it undertakes is a qualifying use as pasturage.

Example 4: not pasturage - agistment that does not directly benefit a business undertaken to obtain produce for sale

72. Clover Land Enterprises Ltd (Clover Land) carries on an enterprise as a property developer. It has ten acres of fallow land outside a major rural town. It acquired the land for future housing development. Clover Land, for a small fee, allows Tony and Tania, who operate a horse-riding business to graze their horses on its land. Clover Land uses diesel fuel in the maintenance of fencing to prevent the horses from straying.

73. The agistment fee Clover Land receives is very small, and there is no prospect of profit from these activities in the future. Clover Land's agistment activities do not amount to a business and are not an enterprise, nor are they part of its enterprise of property development and are excluded from being an agricultural activity.

74. Tony and Tania are not undertaking a business to obtain produce for sale. The agistment activity is neither for the purposes of, nor for purposes that will directly benefit, a business undertaken to obtain produce for sale.

75. Clover Land is entitled to a fuel tax credit for the fuel they have acquired for use in agistment activities in the course of their enterprise. However, as their activities are not eligible activities, their fuel tax credit amount is reduced by the carbon charge applicable to diesel fuel.

Apiculture

76. A nil carbon reduction amount will be applicable if you acquire taxable fuel for use in apiculture provided the apiculture is carried out for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.

77. For apiculture to qualify as agriculture, it is not necessary that it be carried out on an agricultural property.^[22] However, the fact that an activity in apiculture is carried out on a property that is not ordinarily used for an agricultural activity does not have the effect of converting that property into an agricultural property.

Activities included as agriculture

Solely

78. Some activities included in the definition of agriculture must be ' solely' for a particular purpose.^[23]

79. The Commissioner considers that if you acquire taxable fuel for use in a number of activities, an apportionment can be made as to its intended use in the different activities. If a portion of the fuel is acquired for use in a qualifying activity that has the 'solely' requirement, an entitlement to a fuel tax credit arises for the portion of the fuel that is acquired for use in the activity that qualifies as agriculture.

Live-stock activity

80. A nil carbon reduction amount will be applicable if you acquire taxable fuel for use in a live-stock^[24] activity, as defined in section 43-20, provided the activity is carried out for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.

81. For the purposes of the fuel tax credit scheme, the Commissioner takes the view that the term live-stock takes on its ordinary meaning, which is affected by the definition of 'live-stock' in subsection 43-20(2).

Agricultural soil/water activity

82. A nil carbon reduction amount will be applicable if you acquire taxable fuel for use in an agricultural soil or water activity provided the activity is carried out for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.

Agricultural construction activity

83. A nil carbon reduction amount will be applicable if you acquire taxable fuel for use in an agricultural construction activity provided the activity is carried out for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.

Agricultural waste activity

84. A nil carbon reduction amount will be applicable if you acquire taxable fuel for use in an agricultural waste activity, provided the activity is carried out for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.

85. For the purposes of section 43-35, a waste product of an agricultural activity is a by-product of an agricultural activity that is useless, rejected, not wanted or economically unusable and which is to be discarded.

Sundry agricultural activity

86. A nil carbon reduction amount will be applicable if you acquire taxable fuel for use in a sundry agricultural activity as defined in section 43-40 provided the activity is carried out for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.^[25] Use of taxable fuel 'at' residential premises

87. For the purposes of paragraph 43-40(j), the use of taxable fuel is 'at' residential premises if the plant or equipment in which it is to be used is appurtenant to and coherent with premises sufficient for it to be said that it belongs to the premises.

Activities excluded from the definition of agriculture

Forestry or fishing operations

88. Activities that constitute fishing operations^[26] or forestry^[27] (paragraph 43-15(2)(a)) are excluded from the definition of agriculture

Activities not undertaken as part of a business to obtain produce for sale

89. Your fuel tax credit amount will be reduced by the carbon charge applicable to the fuel for taxable fuel you acquire for use in an activity mentioned in subsection 43-15(1), unless the activity is carried out for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.^[28]

90. The exclusion in paragraph 43-15(2)(b) does not apply to hunting or trapping, including the storage of any carcasses or skins obtained from the hunting or trapping, that is carried out for the purposes of a business.

91. An activity will directly benefit a business undertaken to obtain produce for sale if there is a close and immediate positive effect or benefit from the activity in question to the business.

Example 5: activity not excluded from agriculture - vineyard

92. Marcwines Ltd (Marcwines) has 50 acres of land in the Adelaide Hills and has erected trellises and planted pinot noir grapevines on five acres of the property. Marcwines, through its managing director, has grape growing expertise, and has undertaken a scientific study to ensure the suitability of the land for the intended activity. A business plan has been prepared, which allows for gradual expansion of the area under vine, and should result in profitability being achieved within five years.

93. Marcwines has been accepted as carrying on an enterprise and is registered for GST. It has also been accepted as carrying on a business for the purpose of obtaining produce for sale. Marcwines will have a nil carbon reduction amount for taxable fuel it acquires for use in its agricultural activities.

Example 6: activity excluded from agriculture - hobby farm

94. Jo, a retired accountant, owns 2 acres of land at Clare in South Australia's mid north. Jo has no experience in relation to farming. She grazes 6 ewes on the property. She uses diesel fuel for pumping water on the property, and cultivating pasture for the sheep. She plans to increase the size of the flock, and believes her operations will be profitable once she has a flock of 300 sheep. A contract shearer is hired each year to shear the sheep.

95. The Department of Agriculture has advised that the carrying capacity of the land is only 20 sheep. Jo's current and prospective operations will not be capable of achieving profitability.

96. Jo cannot be registered for GST as she is not carrying on an enterprise. Jo's activities on the property are not for the purpose of a business or for purposes that will directly benefit a business undertaken to obtain produce for sale.

97. Jo is not entitled to fuel tax credit for taxable fuel she acquires for use in any of the activities she carries on.

Example 7: activities not excluded from agriculture - church owned farm

98. The Welcome Church is a religious institution. One of its activities is conducting a farming business that involves running three hundred head of cattle on 2,000 acres of prime grazing land that it owns. The Church's farming business is very profitable. The Church puts some of the profit toward the development of the farm, and the remaining profit is used to fund the Church's outreach programme.

99. Given the scale and profitability of the Church's agricultural activities, the Church is conducting a business (and therefore an enterprise) undertaken to obtain produce for sale. The agricultural activities that it carries out on the farm are not excluded from the definition of agriculture by paragraph 43-15(2)(b).

Example 8: activities excluded from agriculture - agricultural college

100. Agricola College (Agricola), which carries on an enterprise as an agricultural college, runs horticulture courses. The majority of its expenditure is directed toward providing education. However, some plants are propagated by the college in the course of the educational activities, and are sold at its annual open day.

101. Agricola is not concerned with making a profit from the sale, which improves attendances at its open day and offsets some of the expenses of propagation. The college does not sell the plants at any other time of the year and the potential revenue from the sale of the plants is minimal relative to the expense of the propagation of the plants.

102. Although Agricola is carrying on an enterprise as an agricultural college, which provides courses in horticulture and carrying on some agricultural activities, its agricultural activities would not be considered a business to obtain produce for sale. The agricultural activities of the college are excluded from the definition of agriculture by paragraph 43-15(2)(b).

Taxable fuel acquired for use in propelling a vehicle on a public road

103. You are entitled to a fuel tax credit under section 41-5 for taxable fuel you acquire for use in a vehicle^[29] with a GVM greater than 4.5 tonnes, travelling on a public road.^[30]

Example 9: transportation of sugar cane from a farm to a collection pad next to a railway siding by a tractor/trailer combination

104. Abel and Kane carry on an enterprise of sugar cane farming and are registered for GST. Abel and Kane's farm adjoins a public road and is located a short distance (two kilometres) from a cane railway siding. Abel and Kane deliver their sugar cane directly to a collection pad next to the railway siding. They use their own tractor and trailer combination, which has a GVM greater than 4.5 tonnes, to transport the sugar cane from the cane field to the collection pad. The sugar cane is subsequently hauled by rail to the sugar cane mill.

105. The tractor and trailer combination is predominantly used on the agricultural property and is an integral part of the harvesting equipment.

106. Taxable fuel acquired for use in propelling the tractor and trailer combination on a public road to take the sugar cane to the railway siding is not excluded from being use in agriculture. As this transport is prior to the completion of the gathering in of the crop, and the travel of the tractor and trailer combination on the public road is incidental to its main use, Abel and Kane will have a nil carbon reduction amount in respect of this taxable fuel.

Example 10: transportation of sugar cane from a farm to a collection pad next to a railway siding by a vehicle

107. Drawing on the facts in Example 9, Abel and Kane decide to use the services of transport contractor, George Transport Enterprises Ltd (George Transport) to transport, via the public road, the harvested sugar cane from a central collection area on the farm to the collection pad next to the railway siding.

108. Abel and Kane deliver the harvested sugar cane to the central collection area on the farm by their tractor and trailer combination. George Transport uses a prime mover and trailer to transport the harvested sugar cane from the central collection area on the farm to the collection pad next to the railway siding. The prime mover and trailer is modified to transport the harvested sugar cane in canetainers and has a GVM greater than 4.5 tonnes.

109. The prime mover and trailer is used by George Transport to transport goods. As the transport of sugar cane by George Transport involves travel on a public road, taxable fuel acquired for use in propelling the prime mover and trailer is not in agriculture.

110. The transport of sugar cane undertaken by George Transport is also not an activity in agriculture as the transport from farm to the collection pad next to the railway siding is after the crop has been gathered in.

111. George Transport is entitled to a fuel tax credit for use in a vehicle with a GVM greater than 4.5 tonnes, travelling on a public road under section 41-5. The amount of the fuel tax credit is reduced by the amount of the road user charge.

112. Abel and Kane are entitled to a fuel tax credit for taxable fuel acquired for use in propelling the tractor and trailer combination as the taxable fuel is used in the gathering in of the crop. The amount of the fuel tax credit is not reduced by the carbon charge.

Example 11: travel of a self-propelled mechanical grape harvester on a public road between two vineyards

113. Jake carries on an enterprise as a grape grower. Jake has two parcels of land a kilometre apart under vines. The two vineyards adjoin a public road. Jake contracts the harvesting of his grapes to Fine Vine Harvesters (Fine Vine).

114. Fine Vine picks the grapes by use of a self-propelled mechanical grape harvester which has a GVM greater than 4.5 tonnes. The harvester travels as required between the two vineyards to harvest the different grape varieties in a continuous process.

115. Taxable fuel acquired for use in propelling the mechanical grape harvester on the public road is a qualifying use under paragraph 43-15(1)(d). The travel is undertaken in carrying out an agricultural activity, being the gathering in of crops. Jake is therefore entitled to a fuel tax credit with a nil carbon reduction amount for the fuel used in the mechanical grape harvester. As the grape harvester's travel on the public road is incidental to its main use, the amount of the fuel tax credit is not reduced by the road user charge.

Meaning of 'public road'

Roads that are public roads

116. For the purposes of the FT Act, the Commissioner considers that a road is a public road if:

•

it is opened, declared or dedicated as a public road under a statute;

•

it is vested in a government authority having statutory responsibility for the control and management of public road infrastructure; or

•

it is dedicated as a public road at common law.

Roads that are not public roads

117. The Commissioner considers that the following are not public roads for the purposes of the FT Act:

•

a road constructed or maintained under a statutory regime by a public authority that is not an authority responsible for the provision of road transport infrastructure, in circumstances where the statutory regime provides that public use of, or access to, the road is subordinate to the primary objects of the statutory regime; or

•

a road that has not been dedicated as a public road over privately owned land.

Date of effect

118. This Ruling applies from 1 July 2012.

119. However, the Ruling does not apply to taxpayers to the extent that it conflicts with the terms of a settlement of a dispute agreed to before the date of issue of the Ruling (see paragraphs 75 to 76 of Taxation Ruling TR 2006/10 Income tax, fringe benefits tax and product grants and benefits: Public Rulings).

Commissioner of Taxation
27 June 2012

Appendix 1 - Explanation

General entitlement rules for a fuel tax credit

120. You are entitled to a fuel tax credit^[31] for taxable fuel that you acquire or manufacture in, or import into, Australia to the extent that you do so for use in carrying on your enterprise.^[32]

121. However, you are only entitled to the fuel tax credit if, at the time you acquire the taxable fuel, you are registered for GST, or required to be registered for GST.^[33] This is regardless of your turnover.

122. You must be 'carrying on an enterprise' within the meaning of section 9-20 of the GST Act to be able to claim a fuel tax credit. The expression 'carrying on an enterprise' includes doing anything in the course of the commencement or termination of the enterprise.

123. Fuel tax^[34] means duty that is payable on fuel under the Excise Act 1901 or the Customs Act 1901 and the respective Tariff Acts,^[35] other than any duty that is expressed as a percentage of the value of fuel for the purposes of section 9 of the Customs Tariff Act 1995.

124. Taxable fuel means fuel on which customs or excise duty is payable.^[36]

125. You will not be considered to have used the taxable fuel if you sell the taxable fuel to another entity.^[37]

126. You only need to acquire taxable fuel with the intention of using it for an eligible purpose to become entitled to a fuel tax credit. It is not necessary for the taxable fuel to have been used by you at the time you make the claim. However, if you acquire the taxable fuel with the intention of using it for a particular purpose but subsequently use the taxable fuel for a different purpose and the amount of fuel tax credit worked out on the basis of the intended use is different from the amount you are actually entitled to worked out on the basis of actual use, you will have a fuel tax adjustment.^[38]

127. Under the FT Act, you are required to calculate your net fuel amount^[39] for each tax period.^[40] Your net fuel amount is worked out using the formula^[41] set out in subsection 60-5(1) of the FT Act. The net fuel amount is claimed on your Business Activity Statement (BAS). If the net fuel amount is positive, you must pay that amount to the Commissioner. If the net fuel amount is negative, the Commissioner must pay that amount to you. The attribution rules in Division 65 of the FT Act determine the tax period to which your fuel tax credit is attributed.^[42]

General principles of apportionment

128. The words 'to the extent that'^[43] in subsection 41-5(1) allow for apportionment between a use that qualifies and one that does not. You can use any reasonable basis for apportionment to work out your entitlement to a fuel tax credit if you acquire taxable fuel that you use for qualifying and non-qualifying uses.

Entitlement to fuel tax credits with a nil carbon reduction amount for taxable fuel from 1 July 2012 for use in agriculture

129. A nil carbon reduction amount will be applicable^[44] for taxable fuel you acquire for use 'in agriculture'. The expression 'agriculture' is defined in subsection 43-15(1).

130. In the context of the phrase 'agriculture' in paragraph 43-8(4)(b), the preposition 'in' means 'in the course of' or 'in the process or act of'. Therefore, if an activity can be said to have taken place 'in the course of' agriculture, it can be concluded that it takes place 'in' agriculture. For your carbon reduction amount to be nil under paragraph 43-8(4)(b), your activities must take place 'in' agriculture.

131. In Chief Executive Officer of Customs v. WMC Resources Ltd (as agent for East Spar Alliance),^[45] Nicholson J, stated:

The word 'in' as it appears in para (a) of the definition of 'mining operations' is to be understood in this context as 'inclusion within, or occurrence during the course of...'

132. The Commissioner considers that the following three criteria may be relevant in determining if an activity takes place 'in the course of' agriculture.^[46]

These are:

•

a causal link exists - in other words, a certain activity is functionally integrated with agriculture, thereby forming an essential part of it;

•

a spatial link exists - meaning that an activity takes place in an area set aside or utilised for agriculture; and

•

a temporal link exists - the activity takes place in a timely fashion, not prior to, or after the completion of, the agricultural activity.

133. The relevance or weighting afforded to these criteria will vary depending on the facts in each case.

The form of the definition of 'agriculture': means, includes, does not include

134. The definition of 'agriculture' in section 43-15 consists of three parts:

•

subsection 43-15(1), paragraphs (a) to (d ): 'agriculture' means the cultivation of the soil, the cultivation or gathering in of crops, the rearing of live-stock, viticulture, horticulture, pasturage or apiculture;

•

subsection 43-15(1), paragraphs (e) to (i ): 'agriculture' includes a number of specific activities. Each of these activities is then separately defined in sections 43-20 to 43-40; and

•

subsection 43-15(2), paragraphs (a) and (b ): 'agriculture' does not include the specific operations or activities detailed in these paragraphs.

135. The use of the form 'means ... includes ... does not include' in section 43-15 means that paragraphs 43-15(1)(a) to 43-15(1)(d) contain the central features of 'agriculture', which is then expanded by the specific activities listed in paragraphs 43-15(1)(e) to 43-15(1)(i). All activities contained in paragraphs 43-15(1)(a) to 43-15(1)(i) are subject to the specific exclusions contained in paragraphs 43-15(2)(a) and 43-15(2)(b). If an activity is within one of paragraphs 43-15(1)(a) to 43-15(1)(i) and is not excluded by subsection 43-15(2), you will have a nil carbon reduction amount if you acquire taxable fuel for use in that activity.

136. The use of the expressions, 'means', 'includes' and 'does not include' in the definition of 'agriculture' in section 43-15 means that activities that are not expressly covered in paragraphs 43-15(1)(e) to 43-15(1)(i) may still be eligible if they fit within the broad activities outlined in paragraphs 43-15(1)(a) to 43-15(1)(d). Paragraphs 43-15(1)(e) to 43-15(1)(i) do not provide an exhaustive list of eligible activities. Rather, they add to the list of eligible activities in paragraphs 43-15(1)(a) to 43-15(1)(d).

137. The form of the definition of 'agriculture': means, includes, does not include is substantially the same as that used for the definition of agriculture in the diesel fuel rebate scheme. Decisions of the Courts and the AAT in relation to the diesel fuel rebate provisions are, in the Commissioner's view, relevant to the interpretation of section 43-15.

138. In the same way that the list of specific activities is not exhaustive in terms of eligibility, an activity does not have to be mentioned in subsection 43-15(2) to be excluded from the definition of 'agriculture'. This subsection serves merely to exclude particular activities from the definition of 'agriculture', while other activities will be excluded because they do not fall within the meaning of 'agriculture'.

139. In practical terms, in determining whether a certain activity is in 'agriculture', it is appropriate to consider:

•

firstly, whether the activity falls within one of paragraphs 43-15(1)(e) to 43-15(1)(i). If it does and the activity is not excluded by subsection 43-15(2), it will be 'agriculture' for the purposes of the fuel tax credit system; and

•

secondly, if the provisions of paragraphs 43-15(1)(e) to 43-15(1)(i) are not met, whether the activity otherwise comes within paragraphs 43-15(1)(a) to 43-15(1)(d) of the definition of 'agriculture'. If it does and the activity is not excluded by subsection 43-15(2), it will be 'agriculture' for the purposes of the fuel tax credit system.

140. This approach ensures that appropriate consideration is given to the specific activities in paragraphs 43-15(1)(e) to 43-15(1)(i) in determining whether a particular activity is in 'agriculture'.

141. The meaning of 'in agriculture' is not restricted to the physical act of cultivation, gathering in of crops, rearing of live-stock, viticulture, horticulture, pasturage or apiculture. In determining whether an activity takes place 'in the course of' agriculture, the three criteria in paragraph 132 of this Ruling should be applied.

142. The manner in which the definition of agriculture in the FT Act is structured means that the activities set out in subsection 43-15(1) are 'in agriculture'.

143. However, paragraph 43-15(2)(b) has the effect of excluding all the activities set out in subsection 43-15(1), other than the activity set out in paragraph 43-40(i),^[47] from being within the definition of agriculture unless those activities are carried out for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.

144. This means that, for the purposes of the fuel tax credit scheme, for an activity to be agriculture, it must be carried out for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.

145. In determining whether a business is carried on, no one factor is conclusive. Each case must turn on its own particular facts and be determined via a process of evaluation, after weighing all the relevant factors. The courts have held that the following indicators are relevant in determining whether a business is carried on:

•

the activity has a significant commercial purpose or character; this indicator comprises many aspects of the other indicators;

•

the entity has more than just an intention to engage in business;

•

the entity has a purpose of profit as well as a prospect of profit from the activity;

•

there is repetition and regularity of the activity;

•

the activity is of the same kind and carried on in a similar manner to that of the ordinary trade in that line of business;

•

the activity is planned, organised and carried on in a businesslike manner such that it is directed at making a profit;

•

the size, scale and permanency of the activity; and

•

the activity is not better described as a hobby, a form of recreation or a sporting activity.^[48]

Status of contractors and subcontractors

146. Unless otherwise specified, if you undertake an eligible agricultural activity that has the requisite connection to a business undertaken to obtain produce for sale, you are entitled to a fuel tax credit with a nil carbon reduction amount.

147. A number of activities that are within the definition of agriculture specifically require the relevant activity to be undertaken by either a farmer^[49] or an entity contracted by the farmer. Examples include:

•

the mustering of live-stock (paragraph 43-20(1)(d));

•

soil or water conservation activities (paragraphs 43-25(a) and 43-25(c));

•

the construction of fences (paragraph 43-30(a));

•

the construction of firebreaks (paragraph 43-30(b));

•

the carrying out of earthworks (paragraph 43-30(e)); and

•

firefighting activities (paragraph 43-40(d)).

148. Where a farmer provides their fuel for use by a contractor to carry out, for the farmer, an agricultural activity, as defined in section 43-45, and the activity is for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale, the farmer's entitlement to a fuel tax credit is not affected provided that the provision of fuel is not taken to be an acquisition for the fuel by the contractor.

149. A contractor is entitled to a fuel tax credit with a nil carbon reduction amount if they acquire taxable fuel for use in carrying out an agricultural activity as defined in section 43-45, provided the activity is for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.^[50]

150. Subsection 43-45(2) provides that in determining whether an activity is an agricultural activity, each of the activities mentioned in paragraphs 43-45(2)(a) to 43-45(2)(d), is also an agricultural activity when it is carried on by a subcontractor.

151. A subcontractor is entitled to a fuel tax credit with a nil carbon reduction amount in respect of taxable fuel they acquire for use in any one of the activities mentioned in paragraphs 43-45(2)(a) to 43-45(2)(d) provided the activity is for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.^[51]

Replenishment by a farmer of fuel used in a contractor's plant or equipment

152. A contractor is entitled to a fuel tax credit with a nil carbon reduction amount in respect of taxable fuel they acquire for use in agricultural activities, and a farmer is entitled to a fuel tax credit with a nil carbon reduction amount in respect of taxable fuel acquired by them for use in agriculture.

153. Where a contractor carries out an activity for a farmer, it is often agreed between the parties that the contractor will be able to replenish their plant or equipment with fuel from the farmer's fuel supply both throughout the activity and upon its completion. This is commonly referred to as a 'full on/full off' arrangement.

154. The Commissioner considers that taxable fuel acquired by a farmer for use in agriculture and used by a contractor in carrying out an eligible agricultural activity for that farmer, under a full on/full off arrangement, is not sold or otherwise disposed of by the farmer and therefore not considered to be taxable fuel acquired by the contractor. In circumstances where it is not intended that proprietary interest in the taxable fuel passes from the farmer to the contractor, the contractor is not entitled to a fuel tax credit in respect of this fuel. The farmer provides the fuel for use by a contractor in agriculture. The farmer's entitlement to a fuel tax credit is not affected by the use of the fuel by the contractor in carrying out eligible activities.

155. However, the farmer's entitlement to a fuel tax credit is affected if the taxable fuel used to replenish the contractor's plant or equipment at the end of the particular activity is not used in agriculture. This occurs when the services are performed and the arrangement between the farmer and the contractor ends. In this situation, the farmer uses the fuel for a purpose other than the eligible use for which it was acquired.

156. Therefore, under a full on/full off arrangement, a contractor is entitled to a fuel tax credit with a nil carbon reduction amount in respect of taxable fuel acquired by them for use in an eligible agricultural activity. The farmer is entitled to a fuel tax credit with a nil carbon reduction amount in respect of taxable fuel acquired for use by that farmer in an eligible agricultural activity and that is used by a contractor in carrying out the agricultural activity on that farmer's agricultural property.

The meaning of 'agriculture'

157. Paragraphs 43-15(1)(a) to 43-15(1)(d) contain the central meaning of 'agriculture'. The activities outlined in these paragraphs are referred to as core agricultural activities.^[52] These core agricultural activities are:

•

the cultivation of the soil;

•

the cultivation and gathering in of crops;

•

the rearing of live-stock; and

•

viticulture, horticulture, pasturage and apiculture.

Cultivation of the soil

158. The definition of 'agriculture' in subsection 43-15(1) states in part:

Subject to subsection (2), the expression agriculture means:

(a)

the cultivation of the soil

159. The phrase 'cultivation of the soil' is not defined in the FT Act and therefore takes its ordinary meaning. The term 'cultivate' is defined in The Australian Oxford Dictionary^[53] as:

1 . a prepare and use (soil etc.) for crops or gardening, b break up (the ground) with a cultivator. 2 . a raise or produce (crops).

160. The expression 'cultivation of the soil' in paragraph 43-15(1)(a) means the preparation of the soil for sowing crops or pasture. The activities that constitute 'cultivation of the soil' include:

•

the ploughing and turning of soil;

•

the spreading of soil conditioners and fertiliser prior to the seeding of a crop;

•

any other activities undertaken to treat the soil to make it more friable and readily able to absorb nutrients; and

•

land clearing immediately prior to ploughing and turning of soil, provided this is undertaken as part of an agricultural business.^[54]

161. 'Cultivation of the soil' includes the felling of trees, clearing of scrub, removal of stones and other actions undertaken in land clearing immediately prior to the ploughing of the soil for the purposes of establishing a farm.^[55] The Commissioner considers that these activities are 'in the course of' or 'in the process of' agriculture and are activities 'in' the cultivation of the soil as the causal, spatial and temporal links with an agricultural activity exist.^[56]

162. Cultivation of the soil does not include the delivery to,^[57] and unloading of,^[58] fertiliser on a farm, or the movement of equipment either between agricultural properties or to an agricultural property by a farmer or contractor. These activities take place prior to cultivation of the soil, and are, therefore, not 'in' agriculture.^[59]

163. In Australian National Railways Commission v. Collector of Customs SA (ANR),^[60] Davies J dismissed the appeal against the refusal of diesel fuel rebate for fuel used in the transportation of fertiliser. In his decision, he said:

The diesel fuel rebate looks to operations within a narrower compass than the operations in respect of which the applicant's claims in this respect were made. The rebate for primary production is concerned with production of primary produce, not with the manufacture and wholesale distribution of superphosphate or with the marketing of primary produce once grown and harvested.^[61]

164. In Re Rylane Pty Ltd and Collector of Customs^[62] (Rylane), the AAT confirmed that the transportation of lime, gypsum and superphosphate by a supply company did not constitute 'cultivation of the soil'. The AAT concluded that:

The ordinary meaning of the phrase 'the cultivation of the soil' is the tilling of the soil; the bestowing of labour upon the soil in raising crops: see The Macquarie Dictionary. The Tribunal has no doubt that the applicant's operations, being in the nature of transporting, delivering and dumping, cannot sensibly be regarded as themselves part of the process of soil cultivation - notwithstanding that the materials so transported, delivered and dumped are, very soon thereafter, used in that process. The Tribunal finds, therefore, that the applicant's abovementioned operations do not fall within paragraph (a) of the statutory definition of 'agriculture'.^[63]

165. The comments made by the AAT in Rylane are equally relevant to the meaning of cultivation of the soil in paragraph 43-15(1)(a).

Cultivation or gathering in of crops

166. The definition of 'agriculture' in subsection 43-15(1) states in part:

Subject to subsection (2), the expression agriculture means:

(b)

the cultivation or the gathering in of crops

Cultivation of crops

167. The expression 'cultivation of crops' does not have any particular trade or technical meaning and is not defined in the FT Act and therefore, takes its ordinary meaning. In the context of paragraph 43-15(1)(b) the relevant meaning of the term 'cultivate' is 'raise or produce crops'.^[64]

168. The expression 'cultivation of crops' in paragraph 43-15(1)(b) means all the activities necessary for the survival and nurturing of crops. These include:

•

cleaning of seed and the application of seed treatments on an agricultural property prior to sowing;

•

sowing of seeds or planting;

•

fertilising;

•

spraying against pests and diseases;

•

weeding;

•

watering the crop; and

•

thinning and pruning.

Gathering in of crops

169. The expression 'gathering in of crops' is not defined in the FT Act. To understand what 'gathering in of crops' means, it is necessary to understand both what the phrase 'gathering in' means and the nature of the 'crop' being gathered in.

The meaning of 'crop'

170. In Re Vicmint Partners Pty Ltd and Chief Executive Officer of Customs^[65] (Vicmint), Deputy President Gerber found that the crop in the harvesting of peppermint plants for the extraction of oil was the peppermint oil.

He said:

In my opinion, although the ordinary meaning of 'crop' may include 'crop of plants', the interpretation 'crop of plant oil [or other ultimate produce of a plant]' does not stretch the ordinary meaning of 'crop' so far as to rebut the presumption.^[66]

171. In Re Day and Deputy Commissioner of Taxation^[67] (Day), the AAT considered the meaning of 'crop'. Associate Professor Barton, Member, found that the term 'crop' meant the cultivated produce of the ground, grain, fruit, the annual produce of cultivated plants, whether in the field or gathered, the yield of any natural product which is periodically harvested or a cultivated plant that is grown on a large scale commercially.

172. Associate Professor Barton, Member, held:

The dictionary meaning of 'crop' in the context of agriculture, is 'the cultivated produce of the ground, as grain or fruit, while growing or when gathered', Third edition of The Macquarie Dictionary; 'the annual produce of cultivated plants, esp. the cereals, whether in the field or gathered, the yield of any natural product in a particular season or locality; a plant etc. which is periodically harvested', The New Shorter Oxford English Dictionary (1993); a cultivated plant that is grown on a large scale commercially, especially a cereal, fruit or vegetable, an amount of produce harvested at one time', Second edition of the Oxford Dictionary of English (2003).^[68]

173. The Commissioner takes the view that the definition of the term 'crop' means the product of a harvest of cultivated plants, cereals, fruit and the like. In the Commissioner's view the definition of the term 'crop' does not include goods produced from those harvested plants, for example, sugar produced from sugar cane, juice produced from fruit or oil produced after processing of plant material.

The meaning of 'gathering in'

174. 'Gathering in' means to physically collect together in one place. 'Gathering in' of a crop ceases when the crop is physically brought together. This will not necessarily be a place of permanent storage. A crop may be gathered in when it is brought together and placed in a temporary storage place from which it is sent off for processing or permanent storage.

175. The time when gathering in of a crop ceases differs from crop to crop and may depend on whether or not the crop is:

•

stored or capable of being stored;

•

required to undergo some initial processing at the time of picking or reaping before it can be physically collected together;

•

collected at a central point for transport to a mill or other processing; and

•

transported from the harvester in machinery, plant or equipment which is integral to the harvesting process to a central collection area on or off the farm. However, transport in other vehicles, which are a means of transport for the harvested crop is not an activity in 'gathering in of crops'.

Crops capable of being stored

176. In relation to crops that are capable of being stored, the Commissioner takes the view that the 'gathering in' of the crop ceases when it is physically collected together for the first time on a farm. This may be when it is placed in a storage structure (for example a bin or silo) on a farm even if this is on a temporary basis. Any subsequent storage of the crop on a farm is covered by paragraph 43-40(f), which deals with the storage of produce of a core agricultural activity on a farm.

177. If the crop is loaded directly from a harvester into a vehicle that will take it away for processing or longer-term storage, the Commissioner considers that the gathering in ceases once the crop has been fully loaded onto the vehicle for transport off the farm using public roads. The transport of the crop for processing or to a storage facility (for example a silo) is not a qualifying activity as it occurs after the crop has been gathered in.

Crops that cannot be stored

178. In relation to crops that are required to be processed soon after harvesting, that is, crops that cannot be stored (for example parsley or sugar cane), the Commissioner takes the view that the gathering in of the crop ceases when the crop is physically collected together for the first time on a farm prior to its processing on or off the farm. If a crop is processed on the farm immediately after harvesting, the gathering in of the crop ceases when it is taken to the site of the processing plant.

179. Where the processing takes place off the farm, the transport of the crop from the farm to the processing plant is not ordinarily an activity in gathering in of the crop. If the crop is loaded directly from a harvester into a vehicle that will take it away immediately for processing, the Commissioner considers that the gathering in of the crop ceases once it has been fully loaded onto the vehicle for transport off the farm using public roads. The transport is an activity that occurs after the crop has been gathered in. This is particularly the case where the crop is taken from a central collection area on the farm to a processing plant off the farm.

180. However, in some circumstances, a crop that cannot be stored may be taken by agricultural machinery,^[69] that is used as an integral part of the harvesting process, directly from the field where it is grown to a collection area off the farm (for example, to a collection area or pad at a processing plant or mill or next to a railway siding). The Commissioner accepts that, in these circumstances, the crop is not gathered in until it is taken to the central collection area at the processing plant or mill or to another central collection area off the farm (for example to a railway siding for subsequent transport by rail). Any subsequent transport of the crop from that central collection area is not an activity in gathering in but occurs after the crop is gathered in.

AAT and judicial decisions on gathering in of crops

181. The point at which a crop is said to be 'gathered in' and what the act of 'gathering in' includes has been the subject of AAT and judicial decisions. This has been particularly the case if the crop harvested:

(a)

undergoes some treatment or process soon after or in conjunction with the harvesting process in order to obtain the produce for which the crop is grown (for example when parsley is dried); or

(b)

leaves the agricultural property without prior storage on the property (for example sugar cane).

182. In ANR,^[70] Sheppard and Burchett JJ affirmed the decision of the AAT that fuel used in the carriage of grain by rail from regional silos to grain ports was not eligible for diesel fuel rebate under the diesel fuel rebate scheme. They said:

In order to succeed, the applicant has to show that, as a matter of law, the carriage of the grain in the circumstances postulated was an operation connected with the gathering in of a crop. In our opinion the carriage is remote from this operation. The operation is connected rather with the distribution of the gathered-in product than with the actual operation of getting it in.^[71]

183. In Vicmint,^[72] Deputy President Dr. Gerber ruled that the distillation of peppermint oil from peppermint plant material (leaves and stalks) did not fall within the ordinary meaning of 'gathering in of crops'. This was despite the fact that, as a matter of commercial necessity, the distillation process had to occur within a short time of mowing and chopping and occurred on the applicant's farm. In his decision, Dr. Gerber said:

It seems generically that 'gathering in' consists of: the process of plucking plants from the ground, or fruit or other produce from the plant, some initial processing in the immediate vicinity of the place where the plant was, or is, in the ground; and collecting such roughly processed items together in the same place, either on or off the property on which it was growing. In the instant case 'gathering in' is the mowing and windrowing of the peppermint leaves and stalks, the chopping and immediate loading of the leaves and stalks into the mobile tubs, and transporting the leaves and stalks to the site of the steam distillation equipment.^[73]

184. In Day,^[74] Associate Professor Barton also found that the distillation of essential oils from cultivated trees did not fall within the ordinary meaning of the 'gathering in of crops'. In his decision, Associate Professor Barton said:

...the phrase 'gathering in of crops' as it occurred in sub-para (b) of the definition of 'agriculture' ... means the act of severing and collecting plant material from cultivated plants where they stand and does not include any milling, extractive or other process, such as the distillation process, that is applied to the plant material that has been collected. ... The use of 'gathering in of crops' in conjunction with 'cultivation' of crops excludes, in the view of the Tribunal, any argument that the legislature intended to include a process such as the distillation process, in that core activity.^[75]

185. Deputy President Dr. Gerber in Vicmint identified the 'gathering in' as a process of plucking plants or fruit, with some initial processing while Member, Associate Professor Barton in Day, found that the expression meant simply severing and collecting plant material without further processing. The Commissioner takes the view that there is no fundamental conflict between the two findings as neither of the decisions included the distillation process in the definition of 'gathering in'.

186. The approach adopted by the AAT in Day is consistent with the approach taken in Vicmint in that both decisions recognised the fact that the 'gathering in' of crops ceased when the crop was first physically collected together on a farm. The Commissioner takes the view that the reference to 'initial processing' in the decision of Deputy President Dr. Gerber in Vicmint refers to the activities that are an integral part of the harvesting of a crop. Those initial processes include removal of soil or other material which might be collected during harvesting and cleaning or threshing that might occur in a harvester at the time that the crop is severed from the ground. These activities take place in the act of severing and collecting plant material from cultivated plants and, as acknowledged by Member Barton in Day, does not extend to include any milling, extractive or other processes after the plant material has been collected together in one place.

187. In Re LM & TMR Quinlivan and the Quinlivan Family Trust and the Chief Executive Officer of Customs^[76] (Quinlivan), the AAT affirmed the decision of the Chief Executive Officer of Customs that fuel used in the operation of a grain dryer some distance away from a farm to artificially dry grain was not eligible for diesel fuel rebate. The AAT took the view that the artificial drying of the crop occurred after it had been gathered in. However, the AAT did not specify the point at which the particular crop was 'gathered in', although it commented that the drying of the crop using windrows was a natural method of drying and was carried out before the crop was gathered in.^[77]

188. While the AAT did not identify the actual point at which the gathering in of the grain crop had ceased, it can be concluded that it must have been 'gathered in' before the drying of the grain off the farm. The Commissioner takes the view that the 'gathering in' in Quinlivan was most likely completed when the crop was first transferred from the harvester to a field bin or a truck for transport to the dryer.

189. In Case 21/98; AAT No. 13,430^[78] (Case 13,430), the taxpayer was involved in the transportation industry and sought a refund of sales tax on the purchase of particular vehicles and parts on the basis that the vehicles were used to transport harvested sugar cane from farms to sugar mills. The relevant sales tax legislation contained an exemption for machinery, implements and apparatus used in an agricultural activity. Agriculture for the purposes of that legislation included operations connected with the cultivation of the soil, the gathering in of crops and the rearing of live-stock.

190. Senior Member KL Beddoe ruled that the exemption did not apply, as the transporting of the sugar cane was after it had been gathered in. In his view, the 'gathering in' of sugar cane ceased when it was delivered to 23.6 tonne canetainers, which were placed at delivery pads located on or adjacent to the farmer's property. In reaching his conclusion, he said:

There is thus a clear contractual distinction between the delivery of the crop to a central collection area of the pads as once delivered to the pads, the transport agreement then takes effect. It is at this point that the balance tips as the crop ceases to be gathered in and is accepted by the purchaser Co-op... being an entity who's operations are concerned with milling and production of sugar being distinct from the growing and harvesting of a crop. It is immediately prior to the Transport Agreement taking effect that the crop has been gathered into one mass as discussed in Vicmint.^[79]

191. In Proserpine Co-operative Sugar Milling Association v. Commissioner of Taxation^[80] (Proserpine), the Federal Court was required to consider whether a cane inspector's vehicle attracted a sales tax exemption. The principal issue was whether the vehicle was regarded as 'mainly carrying out activities in agricultural industry'. The main use of the vehicle was to transport cane inspectors to farm properties to ensure the smooth transport of cane to the mill, the management of cane bin delivery and collection by cane locomotives. The term 'agriculture' for the purposes of sales tax legislation included operations connected with cultivation of soil, the gathering in of crops and the rearing of livestock. In considering whether the transfer of sugar cane to the mill had the relevant connection to agriculture, Keifel J found that:

From a practical viewpoint those operations connected with the harvest, the 'gathering in of crops' as distinct from its following manufacture, do not extend to the transport of the cane and the organisation of that transportation to the mill. Those activities are, as the Tribunal found, properly seen as connected with the mill's processing.^[81]

192. The Commissioner considers that the views expressed in ANR, Vicmint, Quinlivan, Day and, although decided in a different legislative context, Case 13,430 and Proserpine, are relevant to the interpretation of the expression 'gathering in of crops' in paragraph 43-15(1)(b).^[82]

Some common crops and when they are gathered in

193. The following table lists some common crops and when they are 'gathered in':

194. The Commissioner takes the view that once a crop is 'gathered in', the transportation of the crop by any vehicle from the farm or a central collection point is not a qualifying use as 'gathering in of crops'.^[83]

Rearing of live-stock

195. The definition of 'agriculture' in subsection 43-15(1) states in part:

Subject to subsection (2), the expression agriculture means:

(c)

the rearing of live-stock

196. The term 'rearing' is not defined in the FT Act and takes its ordinary meaning. The relevant definition of 'rear' in The Australian Oxford Dictionary^[84] is 'breed and care for (animals)'.

The meaning of 'live-stock'

197. The term 'live-stock' is defined in section 110-5 as having a meaning given by subsection 43-20(2)'.

198. Subsection 43-20(2) defines live-stock in the following terms:

The expression livestock includes any animal reared for the production of food, fibres, skins, fur or feathers, or for its use in the farming of land.

199. The word includes, used in the definition of live-stock in subsection 43-20(2), has been considered in numerous cases.^[85] In some instances, the word is used as an extension of the thing defined or described and at other times to provide clarification. In the definition of agriculture in the FT Act, the expression is used in a variety of constructions, and each activity in which it is used must be examined separately to see the sense in which it is used. It is often used to simply make clear what the particular activity or definition intends to cover. In the Commissioner's view, in the context of subsection 43-20(2), the term 'includes' is used to both expand and clarify the meaning of 'live-stock'.

200. The ordinary meaning of the term live-stock, is 'animals, esp. on a farm, regarded as an asset'.^[86]

201. The Commissioner considers that subsection 43-20(2) affects the ordinary meaning of live-stock in two ways. Firstly, it expands the term to include any animal.

202. Secondly, subsection 43-20(2) clarifies the definition by requiring that the animal be reared for the production of food, fibres, skins, fur or feathers, or for its use in the farming of the land.

203. The decision in Hemens (Valuation Officer) v. Whitsbury Farm and Stud Ltd and other appeals^[87] (Hemens) supports the Commissioner's view. In Hemens, a definition of 'live-stock' similar to the definition of 'live-stock' in the FT Act was considered. Balcombe LJ stated that the definition of live-stock, in the context of the provision being discussed, did not include racehorses.^[88] He further stated:

In Belmont Farm v. Minister of Housing and Local Government (1962) 13 P & CR 417 a Divisional Court of the Queen's Bench Division held that the breeding and keeping of horses, not intended for use in the farming of land, did not amount to 'the breeding and keeping of 'livestock' and so was not a use of the land for the purposes of agriculture within the definition of 'agriculture' contained in subsection 119(1) of the Town and Country Planning Act 1947. We are not, of course, bound to follow this decision, and I accept that it is a decision on a different definition of 'livestock' in a different Act. However, I find the reasoning of Lord Parker CJ in that case relevant to the question we have to answer. There 'livestock' was defined as 'including any creature kept for the production of food, wool, skins or fur, or for the purpose of its use in the farming of land'. Lord Parker CJ said (at 421-422):

Granting that the word 'including' has been used in an extensive sense, it seems to me nonsense for the draftsman to use those words 'any creature kept for the production of food, wool, skins or fur, or for the purpose of its use in the farming of land', if the word 'livestock' was intended to cover the keeping of any creature whether for its use in farming land or not. It seems to me that these words show a clear intention that 'livestock,' however it is interpreted, does not extend to the breeding and keeping of horses unless it is for the purpose of their use in the farming of land.

204. The Commissioner considers that the comments made by Balcombe LJ in Hemens apply equally to the definition of 'live-stock' in subsection 43-20(2).

205. In the context of section 43-20, the term 'live-stock' means any animal kept for the production of food, wool, skins or fur, or for its use in the farming of land. The term live-stock, therefore, includes animals such as sheepdogs, stock horses, and other working animals that are used as a resource in farming.

206. In the Commissioner's view, the term 'live-stock' also includes animals bred on agricultural stud farms, for example, merino sheep stud farms and cattle stud farms. This is because such animals are reared for the ultimate production (through their progeny) of food, fibres, skins, fur or feathers.

207. Animals that are not reared for the production of food, fibres, skins, fur or feathers, or for their use in the farming of land are not within the meaning of live-stock for the purposes of the fuel tax credit scheme. This means that the rearing of racehorses or showjumping horses, or animals bred as pets are not live-stock as defined in subsection 43-20(2).

Rearing of live-stock

208. Rearing of live-stock includes all activities required to breed, raise and care for the animals for the specified purposes in accordance with accepted commercial animal husbandry and management practices. The feeding of animals and the basic milling of stock feed by a farmer for their own use and any off-road transport of the live-stock for agistment during the rearing process are activities in rearing of live-stock.

209. Rearing of live-stock ends when the purpose for which the animals are reared is complete. Practically, this is either when an animal dies or leaves the agricultural property following a sale or other disposal.

210. The breeding of and caring for animals other than for the production of food, fibres, skins, fur or feathers, or for their use other than in the farming of land is not rearing of live-stock under paragraph 43-15(1)(c) as such animals are not live-stock.

211. The transportation and unloading of feed from a delivery truck into a storage structure on a farm^[89] and the loading, and transportation to an abattoir, a slaughtering point or to a port for export of live-stock are not activities in the rearing of live-stock.^[90] Nor does rearing of live-stock include the transport of live-stock to a sale yard for auction, sale or other disposal.

212. Any further care for the live-stock (for example during transport, or in lairage yards or on wharves prior to export) is also not rearing of live-stock.^[91]

Viticulture

213. The definition of 'agriculture' in subsection 43-15(1) states in part:

Subject to subsection (2), the expression agriculture means:

(d)

viticulture

214. For the purposes of paragraph 43-15(1)(d), viticulture is the growing of grapes through the cultivation of grape vines and includes:

•

the planting, tending and maintaining of vines;

•

the erection of trellises in a vineyard;

•

the harvesting of grapes; and

•

clearing land on an agricultural property where a viticultural business is being carried on provided the land clearing occurs immediately prior to the activities, of erecting trellises and planting vines.^[92]

215. Once grapes have been harvested, you are entitled to a fuel tax credit with a nil carbon reduction amount for taxable fuel that you acquire for use in agricultural activities undertaken until the grapes are collected into one mass at a central collection area on the farm. If, in the vineyard, grapes are loaded immediately onto a truck for transport away from the agricultural property, the loading of the truck at the agricultural property is an activity in viticulture.

216. For the purposes of paragraph 43-15(1)(d), viticulture does not include:

•

activities that take place after the grapes are collected into one mass at a central collection area on the farm; or

•

the transport of grapes away from the agricultural property for processing of any kind.^[93]

217. Activities such as the drying of grapes to produce dried fruit^[94] or the crushing of grapes, either to produce grape juice or wine, are not 'viticulture' as they occur after the grapes have been harvested and gathered in. These activities are undertaken in the production of wine, juice or dried fruit.

Horticulture

218. The definition of 'agriculture' in subsection 43-15(1) states in part:

Subject to subsection (2), the expression agriculture means:

(d)

horticulture

219. Section 43-65 defines horticulture in the following terms:

The expression horticulture includes:

(a)

the cultivation or gathering in of fruit, vegetables, herbs, edible fungi, nuts, flowers, trees, shrubs or plants; or

(b)

the propagation of trees, shrubs or plants; or

(c)

the production of seeds, bulbs, corms, tubers or rhizomes.

220. The Australian Oxford Dictionary^[95] defines the term 'horticulture' as being 'the art of garden cultivation'. The Macquarie Dictionary^[96] defines the term 'horticulture' as:

1 . commercial cultivation of fruit, vegetables, and flowers, including berries, grapes, vines and nuts. 2 . the science or art of growing fruit, vegetables, flowers or ornamental plants. 3 . the cultivation of a garden.

221. The definition of horticulture in section 43-65 takes the ordinary meaning of the term and expands that ordinary meaning by including activities in 'gathering in' of horticultural produce. An activity can be considered 'horticulture' if it falls within the ordinary meaning of horticulture or it falls within the expanded definition in section 43-65, and is carried out for the purpose of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.

222. The cultivation of horticultural produce means to bestow labour on the land in raising the produce as part of a business and includes the activities of:

•

sowing of seeds or planting;

•

fertilising;

•

spraying against pests and diseases;

•

weeding;

•

watering the crop; and

•

thinning and pruning.

223. Horticulture also includes the production of potting mix by a horticulturalist for use in their business of horticulture.^[97]

224. The 'cultivation ... of fruit, vegetables, herbs, edible fungi, nuts, flowers, trees, shrubs or plants' means to bestow labour on the land in raising this produce; to till or improve by husbandry. It includes turning the soil and adding fertiliser in order to grow the particular produce.

225. The gathering in of horticultural produce means to pick or harvest from the place of growth and physically collect together in one place for the first time. Gathering in of horticultural produce includes the process of plucking plants from the ground, or fruit or other produce from the plant, some initial processing in the vicinity of the place where the plant was, or is, in the ground and physically bringing together the crop.

226. For the purposes of paragraph 43-15(1)(d), gathering in of horticultural produce does not include:

•

any further processing necessary for the recovery of the produce after it has been gathered in;

•

further processing undertaken on the produce for the extraction of another product or in refining the produce; or

•

transport of the produce after it has been gathered in.

227. When a horticultural produce is gathered in and not immediately transported or processed, but is stored on the property, the Commissioner considers that the 'gathering in' ceases when the crop is brought together for the first time. Any subsequent storage is covered by paragraph 43-40(f), which deals with the storage of produce of a core agricultural activity on a farm.

228. Horticulture does not extend to the commercial manufacture of goods produced for sale to others for use in horticulture. For example, an entity that manufactures potting mix or mushroom substrate for commercial sale does not undertake the business of horticulture.^[98] The manufacturers are not making potting mix/substrate as part of their own production of plants/mushrooms. However, a commercial horticulturalist who acquires taxable fuel for use in making potting mix or substrate for their own use in the production of plants or mushrooms is entitled to a nil carbon reduction amount under the qualifying activity of agriculture.

229. A horticultural activity that does not constitute a business undertaken to obtain produce for sale is not 'agriculture'.

230. In Re City of Nunawading and Comptroller-General of Customs^[99] (City of Nunawading), the AAT held that the development and care of reserves, parks, bushland and gardens did not constitute horticulture for the purposes of the Customs Act. The AAT stated that to come within the meaning of horticulture in subsection 164(7) of the Customs Act, an activity must relate in some way to an aspect of primary production conducted as a commercial or business enterprise. The AAT allowed a rebate only to the extent to which the City used diesel fuel in propagating plants for sale.

231. The Commissioner considers that the decision of the AAT in City of Nunawading applies equally to the meaning of horticulture in Subdivision 43-B of the FT Act. The principle applied in City of Nunawading is broadly reflected in the FT Act by excluding, from the meaning of agriculture, activities that are not carried out for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.^[100]

Pasturage

232. The definition of 'agriculture' in subsection 43-15(1) states in part:

Subject to subsection (2), the expression agriculture means:

(d)

pasturage

233. The term 'pasturage' is not defined in the FT Act and therefore takes its ordinary meaning of:

1 . land for pasture. 2 . the process of pasturing cattle etc.^[101]

234. The term 'pasturage' in paragraph 43-15(1)(d) means the growing of grass or herbage for live-stock to graze upon, or the act of releasing live-stock for feeding upon land on which this grass has been grown. It includes agistment.

235. Pasturage encompasses all activities involved in the growing of this grass or herbage, including watering, feeding the grass with nutrients, and the undertaking of weed control.^[102]

Agistment activities

236. The Commissioner considers that pasturage includes agistment activities.

237. The term 'agist' is defined in The Australian Oxford Dictionary^[103] as 'take in and feed (livestock) for payment'. While the terms 'agist' and 'agistment' are not used in paragraph 43-15(1)(d), they are similar in meaning to the term 'pasturage', which is expressly included in the meaning of the term 'agriculture'.

238. Agistment activities are 'agriculture' for the purposes of the fuel tax credit scheme, provided they are carried out for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.^[104] This requirement is satisfied if:

•

the agistment activities are undertaken as one element of an agricultural business; or

•

the entity conducts agistment activities on a scale that amounts to a business.

Apiculture

239. The definition of 'agriculture' in subsection 43-15(1) states in part:

Subject to subsection (2), the expression agriculture means:

(d)

apiculture

240. The term 'apiculture' in paragraph 43-15(1)(d) means the breeding and care of bees for the production of honey and/or beeswax.^[105] It includes activities such as the transportation of hives (excluding transport on public roads), and the extraction of honey from the honeycomb by methods such as heat extraction or use of a centrifuge.

241. To qualify as agriculture, it is not necessary that apicultural activities be carried out on an agricultural property. Apiculture may be undertaken on crown land, state forests, and other public land or on farms owned or operated by others.

242. Apicultural activities carried out on crown land, state forests, and other public land does not have the effect of converting these properties or land into an agricultural property.^[106]

243. Apiculture does not include the manufacture of honey and/or beeswax nor does it include activities such as the blending or bottling of honey.

Activities included as 'agriculture'

244. Paragraphs 43-15(1)(e) to 43-15(1)(i) set out the activities that are included within the definition of agriculture. Sections 43-20 to 43-40 set out the meanings of each of these activities.

245. To qualify as agriculture for the purposes of the fuel tax credit scheme, some activities included in the definition of agriculture must be 'solely' for a particular purpose.^[107] For example, paragraph 43-25(b) refers to 'searching for ground water solely for use in an agricultural activity...'.

246. In addition, some activities must be undertaken by an entity that carries on a core agricultural activity.^[108] A number of the activities included within the definition of agriculture also require an activity to be undertaken 'on an agricultural property where a core agricultural activity is carried on' or 'at a place adjacent to that property'.

247. Paragraphs 7 to 9 of this Ruling explain the meaning of 'core agricultural activity'. The expression 'an agricultural property where a core agricultural activity is carried on' is discussed at paragraphs 12 to 20 and the expression 'at a place adjacent to that property' is explained at paragraphs 21 to 25 of this Ruling.

Solely

248. The word 'solely', in the context of the paragraphs in which it is used, takes on its ordinary meaning of 'only' or 'exclusively'. For an activity to be solely for a particular purpose, it must be only and exclusively for that purpose and for no other purpose. Where a specified activity is required to be solely for a particular purpose for it to be agriculture, an activity that is for a dual purpose will not qualify as agriculture.

249. In Randwick Municipal Council v. Rutledge^[109] (Randwick Council), Windeyer J in relation to the use of the words 'exclusively' or 'solely' stated:

The words 'exclusively' and 'solely' are familiar in fiscal and rating law. Where an exemption from rating depends upon the use of land exclusively for a particular stated purpose, then the use must be for that purpose only. ... such words confine the use of the property to the purpose stipulated and prevent any use of it for any purpose, however minor in importance, which is collateral or independent, as distinguished from incidental to the stipulated use.^[110]

250. A strict and narrow interpretation of the provisions of the definition of agriculture in the FT Act that contain the 'solely' requirement would mean that you may not be entitled to a nil carbon reduction amount for taxable fuel acquired for use in a core agricultural activity.

251. For example, paragraph 43-25(d) provides that an agricultural soil/water activity includes the pumping of water solely for use in an agricultural activity. If a farmer pumps water on their farm only or exclusively for use in the irrigation of their crop, the pumping of the water is within the meaning of 'agriculture'. The farmer is entitled to a nil carbon reduction amount for taxable fuel acquired for use in the pumping of water.

252. If, however, the bulk of the water is for use in irrigation, and a small quantity is for use in raising showjumping horses, then, on a strict and narrow reading of paragraph 43-25(d), the activity is not an agricultural soil/water activity as the pumping of the water is not solely for use in an agricultural activity.

253. The above approach does not accord with the legislative intent of the Energy Grants Act to maintain entitlement to off-road credits established under the diesel fuel rebate scheme for those that engage in mainstream agriculture. It follows that the same principles apply in the fuel tax context.

254. The Commissioner considers that where an entity that carries on an enterprise of agriculture acquires taxable fuel for use in a number of activities, an apportionment can be made as to its intended use in the different activities.^[111]

255. The Commissioner's views accord with the legislative intent of the FT Act in relation to the introduction of the 'solely' requirement in a number of specified eligible activities in the definition of agriculture in the energy grants credits scheme (which preserved entitlements that existed under the diesel fuel rebate scheme). The Commissioner's views are also supported by some AAT and judicial decisions.^[112]

Legislative intent

256. Prior to the 1995 amendments to the Customs Act and the Excise Act, the eligibility criteria for the agriculture category of the diesel fuel rebate scheme contained two broad eligibility criteria known as the 'sweeper clauses'.^[113] The so called 'sweeper clauses' provided that operations 'connected with' agriculture were eligible activities.

257. The 1995 amendments sought to narrow the eligibility criteria by replacing the broad and ambiguous 'sweeper clauses' with an objective list of eligible activities.

258. In introducing the amendments, the then Minister for Industry Science and Technology said:

In the existing legislation, both the definition of 'agriculture' and the definition of 'mining operations' employ what are known as 'sweeper clauses', which have the effect of making other operations connected with agriculture or mining eligible for the payment of rebate. The interpretation of these 'sweeper clauses' has been a source of contention over the years, and has generated most of the litigation in the lifetime of the scheme. ...

The intention of these amendments is to put beyond doubt that the Scheme is not meant to provide rebate eligibility for activities which are not sufficiently connected with mining or agriculture; for instance, the provision of a service or utility to a farmer or miner, such as electricity through a grid, ...

Because claims of these kinds have sought to broaden the scheme well beyond what it should be, the Government is proposing that these amendments be made retrospective to 1 August 1986 to protect the revenue.^[114]

259. The Customs and Excise Legislation Amendment Bill 1995 was subject to further amendments in the Senate prior to being enacted. Those further amendments introduced the 'solely' requirement into a number of specified activities. In explaining the further amendments, the Supplementary Explanatory Memorandum states:

The stated intention of the Bill is not to affect the eligibility of rebate of persons engaged in mainstream farming and mining. ... The schedule of amendments to the Bill is a direct response to these representations and proposes to expand the list of eligible activities under both the definitions of 'agriculture' and 'mining operations'. It is considered that the expanded list will maintain the integrity of the Scheme in assisting persons engaged in mainstream... mining operations while excluding from eligibility activities that can only be regarded as being remotely connected with agriculture or mining.^[115]

260. The introduction of the 'solely' requirement in a number of activities in the diesel fuel rebate scheme was not, therefore, to deny rebate to those that engaged in mainstream farming (or mining) activities but was intended to deny rebate to those that provide services, or goods to farmers (or miners) as part of a supply of services or goods to the public at large. As the fuel tax credit scheme adopts essentially the same definition of 'agriculture' and maintains the entitlements equivalent to those available under the diesel fuel rebate scheme and energy grants scheme, this applies equally to the entitlement provisions of the fuel tax credit scheme.

AAT and judicial decisions

261. Further, the Commissioner's view on the interpretation of the provisions that have the 'solely' requirement takes into account the views expressed in AAT and Court decisions.

262. Re Central Norseman Gold Corporation Limited and Collector of Customs^[116] (Central Norseman), although decided in the context of the 'sweeper clauses', is instructive as to how the AAT or the Courts may interpret the provisions that have the 'solely' requirement. In its decision, the AAT stated:

These provisions are intended to apply to commercial operations and are therefore to be read in a practical, commonsense manner. They therefore permit the apportionment of a bulk purchase of fuel whenever it can be shown that there is an appropriate basis upon which the apportionment should be made. Although the matter was not argued before the Tribunal, we would accept that a case for apportionment may in a proper case be made out in relation to the purchase of fuel for the operation of a powerhouse which produces electricity for use partly in the course of a mining operation as defined and partly not in the course of such an operation.

That is not to say, however, that the rebate is to be determined simply by apportioning the use to which electricity from a multi-purpose powerhouse is actually used or is intended to be used. The applicant is not entitled to a rebate unless it demonstrates that it purchased diesel fuel for use in a mining operation as defined. If it is established that it has done so, the applicant will not lose its entitlement to rebate simply because some of the electricity produced is in fact used for a purpose which, looked at on its own, does not form part of a mining operation as defined.^[117]

263. In Randwick Council, Windeyer J, in relation to land, accepted that questions may arise when part of the land is used for the relevant purpose and another part for a different purpose. He referred to the decision of the High Court in Sisters of Mercy Property Association v. Newtown and Chilwell^[118] (Sisters of Mercy).

264. In Sisters of Mercy, the High Court examined subsection 249(5) of the Local Government Act 1928-1941 (Victoria) which stated:

Land in the occupation of or under the management and control of any religious body and upon which is situated any hall or other building used in connection with any church exclusively for any purposes connected with or in support of the objects of such religious body shall not be rateable property.

265. In that case, on the relevant land there was a convent for nuns of the order, a convent chapel, a college and a small building used exclusively for the preparation of altar bread and for mending church vestments for the religious purposes of the convent chapel.

266. The court adopted an apportionment approach and held that the land actually occupied by the 'altar-bread building' with its curtilage (if any) was exempt from rates, but that this did not bring about the exemption of any other part of the land.^[119]

267. The above decisions indicate that, in appropriate circumstances, an apportionment can be made to determine the extent to which an activity or thing is 'solely' or 'exclusively' for a particular purpose.^[120] The Commissioner considers that, in relation to those activities in the definition of 'agriculture' in section 43-15 that have the 'solely' requirement, it is open and appropriate for the Commissioner to take the apportionment approach in determining whether or not an activity is solely for the relevant purpose. The provisions are capable of this interpretation, which gives a reasonable result that accords with the legislative intent.^[121]

268. The apportionment must be made on a fair and reasonable basis. In determining whether an activity is 'solely' for a particular purpose, reference can be made to appropriate records that substantiate the quantity of taxable fuel that you propose to use or actually use in a qualifying use. For example, in relation to the supply or pumping of water solely for use in agriculture, the appropriate records include:

•

the quantity (in litres or tonnes) of water supplied to an agricultural property and any other property;

•

if meters are installed, meter readings of the quantity of water supplied to the agricultural property and other properties; and

•

the total number of hours and fuel consumption rate for the equipment used to pump water to an agricultural property.

269. If an activity fails to meet the provisions of one of the paragraphs where the 'solely' requirement is present, its eligibility as agriculture under paragraphs 43-15(1)(a) to 43-15(1)(d) can be considered.^[122]

The meaning of agricultural activities in sections 43-20 to 43-40

Live-stock activity

270. The definition of 'agriculture' in subsection 43-15(1) states in part:

Subject to subsection (2), the expression agriculture includes:

(e)

a live-stock activity

271. The term 'live-stock' is defined in section 110-5 as having a meaning given by subsection 43-20(2). The meaning of 'live-stock' is discussed in paragraphs 198 to 208 of this Ruling.

272. The expression 'live-stock activity' is defined in subsection 43-20(1). Activities that constitute live-stock activities can broadly be described as:

•

shearing and milking;

•

transporting of live-stock;

•

return journeys after transporting live-stock; and

•

mustering of live-stock.

Shearing and milking

273. Paragraph 43-20(1)(a) provides:

The expression live-stock activity means:

(a)

the shearing or cutting of hair or fleece of *livestock, or the milking of livestock, on an *agricultural property

274. The activities of shearing, cutting of hair or fleece, or milking of live-stock qualify as live-stock activities under paragraph 43-20(1)(a), if they are carried out on an agricultural property.^[123] It does not matter who carries out the activities mentioned.

275. The 'shearing or cutting of hair or fleece of live-stock'^[124] is considered to extend beyond the shearing of sheep. It includes the removal of hair or fleece from other animals, for example, goats, alpacas and llamas.

276. The phrase 'the milking of live-stock' extends to all activities involved in the obtaining of milk from any animal that may be considered live-stock.

Transporting of live-stock

277. Paragraph 43-20(1)(b) provides:

The expression live-stock activity means:

(b)

the transporting of live-stock to an agricultural property:

(i)

for the purpose of rearing; or

(ii)

for the purpose of agistment

278. For the transport of live-stock to be a live-stock activity, the transportation of live-stock must be to an agricultural property^[125] and it must be for the purpose of either rearing or agistment of the live-stock.^[126]

279. If the live-stock is moved from one vehicle to another whilst being transported for an eligible purpose, the transport undertaken by each vehicle qualifies as a live-stock activity.

280. The off-road transport of live-stock to a place other than an agricultural property (for example to a sale yard), or to an agricultural property for a reason other than that of rearing or agistment is not a live-stock activity under paragraph 43-20(1)(b).

281. Only the actual transport of live-stock for an eligible purpose qualifies as a live-stock activity. Travel prior to the transport of live-stock for the requisite purpose or the movement of a vehicle from a depot to a place at which live-stock are loaded is not a live-stock activity under paragraph 43-20(1)(b).

Return journeys after transporting live-stock

282. Paragraph 43-20(1)(c) provides:

The expression live-stock activity means:

(c)

the return journey from a place referred to in paragraph (b) of the vehicles or equipment used in transporting the livestock, if that journey is for the purpose of:

(i)

a further transportation of livestock as mentioned in paragraph (b); or

(ii)

backloading raw materials or consumables for use in a *core agricultural activity;

283. Under paragraph 43-20(1)(c), a return journey of vehicles or equipment, used in transporting live-stock, from an agricultural property, to which live-stock has been transported for the purpose of rearing or agistment, is a live-stock activity provided:

•

the return journey is for the backloading of raw materials or consumables, for example, fertiliser or stockfeed, for use in a core agricultural activity; or

•

the return journey is undertaken in order to repeat the transporting of live-stock for rearing or agistment to an agricultural property.

284. For the purposes of paragraph 43-20(1)(c), a return journey is a journey from an agricultural property at which live-stock for rearing or agistment have been unloaded back to the place from which the live-stock were first transported.

285. A return journey qualifies as a live-stock activity only if the forward journey qualifies as a live-stock activity under paragraph 43-20(1)(b). The return journey does not have to be undertaken immediately, but must be sufficiently associated with the initial journey to be regarded as a 'return journey', rather than as independent transport.

286. There is no requirement that the return journey be undertaken without a break. It must, however, be possible to view the broken journey as a return journey. This will be determined on a case by case basis having regard to the facts and circumstances of each case.

287. If a vehicle transports live-stock from more than one place, there is no requirement that it return to all of those places. If it returns to only one of those places, that journey qualifies as a return journey.

288. If the return journey is for the purposes of backloading raw materials, there is no requirement that it take place without a break. The return journey may, for example, include short detours to load the raw materials or consumables in question. These detours, however, must be of such a nature that the entire trip can be identifiable as a return journey. The materials backloaded must be for use in a core agricultural activity.

Mustering of live-stock

289. Paragraph 43-20(1)(d) provides:

The expression live-stock activity means:

(d)

the mustering of livestock:

(i)

by a person who conducts a core agricultural activity; or

(ii)

by a person contracted by that person to conduct the mustering; on the agricultural property where the core agricultural activity is conducted.

Note: The agricultural activities referred to in paragraph (d) are given an expanded meaning by subsection 43-45(2).

290. The mustering of live-stock is a live-stock activity under paragraph 43-20(1)(d) if it is undertaken on a farm^[127] by a farmer^[128] or an entity contracted by that farmer, or a subcontractor.^[129] If mustering of live-stock is undertaken on public or common land, it is not an eligible live-stock activity.

291. The 'mustering of live-stock' means the physical act of rounding up live-stock for purposes such as shearing, branding, dipping, moving them from one paddock to another, any other activity necessary for the care and management of the live-stock, or for their transport away from the agricultural property.

292. Mustering of live-stock involves the use of four wheel drive vehicles, motor cycles, aircraft or animals for the purposes of rounding up live-stock.

Agricultural soil/water activity

293. The definition of 'agriculture' in subsection 43-15(1) states in part:

Subject to subsection (2), the expression agriculture includes:

(f)

an agricultural soil/water activity

294. Agricultural soil/water activity is defined in section 43-25. Activities that constitute agricultural soil/water activities can broadly be described as:

•

soil or water conservation on an agricultural property;

•

searching for ground water;

•

soil or water conservation within an approved catchment area;

•

pumping of water; and

•

supply of water.

Soil or water conservation on an agricultural property

295. Paragraph 43-25(a) provides:

The expression agricultural soil/water activity means:

(a)

any activity conducted for the purpose of soil or water conservation:

(i)

by a person who conducts a *core agricultural activity; or

(ii)

by a person contracted by that person to conduct the first-mentioned activity;

on the *agricultural property where the core agricultural activity is conducted;

296. For the purposes of paragraph 43-25(a), a soil or water conservation activity is any activity undertaken to preserve the soil or water and the quality thereof upon a property.

297. A soil or water conservation activity is an agricultural soil or water conservation activity under paragraph 43-25(a) if the activity is carried out on a farm by a farmer, an entity contracted by the farmer, or by a subcontractor.

298. There is no single factor that is conclusive in identifying whether an activity is undertaken for the purposes of soil or water conservation. Each case must be decided having regard to the relevant facts and circumstances.

299. The Commissioner considers that soil or water conservation activities on an agricultural property include:

•

repairs to the banks of a creek which have suffered erosion;

•

planting grasses to prevent erosion;

•

ripping steep areas across slopes to help slow down the erosion action of wind and rain after a fire; and

•

planting water plants to improve the quality of water in a creek on a farm.

Searching for groundwater

300. Paragraph 43-25(b) provides:

The expression agricultural soil/water activity means:

(b)

for ground water solely for use in an *agricultural activity, or the construction or maintenance of facilities for the extraction of such water, solely for that use, if the searching, construction or maintenance:

(i)

is conducted on an agricultural property where a core agricultural activity is conducted, or at a place adjacent to that property; and

(ii)

is conducted by the person who conducts the first-mentioned agricultural activity or by a person contracted by that person to conduct the searching, construction or maintenance.

301. Searching for ground water is an agricultural water activity under paragraph 43-25(b) if:

•

the water is solely, that is, only or exclusively for use in an agricultural activity;

•

the search is carried out on a farm^[130] or at a place adjacent to the farm; and

•

the search is carried out by the farmer, a contractor to that farmer or by a subcontractor.

302. The construction or maintenance of facilities for the extraction of water is an agricultural water activity under paragraph 43-25(b) if:

•

the facility is for the extraction of ground water only;

•

the water is solely, that is, only or exclusively for use in an agricultural activity;

•

the construction or maintenance is carried out on a farm or at a place adjacent^[131] to the farm; and

•

the construction or maintenance is carried out by the farmer,^[132] a contractor to that farmer or a subcontractor.

303. Searching for ground water does not include the relocation of equipment between different farms or between places that are not adjacent to those farms. The construction or maintenance of facilities for the extraction of water does not include:

•

an activity that occurs prior to construction of facilities for the extraction of the water; or

•

an activity that is not directly concerned with the actual construction or maintenance of those facilities.

304. As explained at paragraphs 248 to 255 of this Ruling, the expression 'solely' in paragraph 43-25(b) takes its ordinary meaning of 'only' or 'exclusively'. Therefore, the water, the subject of the search, or the construction or maintenance of the facilities for the extraction of the ground water, must be only or exclusively for use in an agricultural activity.

305. Paragraph 43-25(b) is limited in its application to searching for ground water. This is different from paragraphs 43-25(d) and 43-25(e), which are not limited in their application to the pumping or supply of ground water but which refer to the pumping or supply of any water solely for use in the relevant agricultural activity.

306. Ground water is water that lies beneath the surface of the ground, usually in aquifers. Searching for ground water includes the repositioning or relocation within a farm of equipment used in searching for ground water.

307. Searching for ground water is an agricultural water activity, even if the search results in no ground water being found.

Soil or water conservation in an approved catchment area

308. Paragraph 43-25(c) provides:

The expression agricultural soil/water activity means:

(c)

any activity conducted for the purposes of soil or water conservation:

(i)

by a person who conducts a core agricultural activity within an *approved catchment area; or

(ii)

by a person contracted by that person to conduct the first-mentioned activity;

within the approved catchment area

309. The phrase ' approved catchment area' is defined in section 43-50 to mean an area:

(a)

in respect of which a soil or water conservation plan has been adopted by the persons who conduct *core agricultural activities within that area; or

(b)

in respect of which a soil or water conservation agreement has been made between the persons who conduct core agricultural activities within that area.

310. For an activity to be an agricultural soil/water activity under paragraph 43-25(c), it must be for the purposes of soil or water conservation in an approved catchment area.

311. In the context of paragraph 43-25(c), a soil or water conservation activity is any activity undertaken to preserve the soil or water and the quality thereof within an approved catchment area.

312. Activities covered by paragraph 43-25(c) can be carried out on any part of the approved catchment area. A qualifying use under this paragraph is not limited to activities within the area on which a core agricultural activity is carried on.

313. An approved catchment area is an area for which a soil or water conservation plan or agreement exists. The soil or water conservation plan must have been adopted by farmers who carry on core agricultural activities within the area covered by the plan. Alternatively, the soil or water conservation agreement must have been made between farmers who carry on core agricultural activities within the area covered by the agreement. Paragraph 43-25(c) does not exclude other entities from being parties to the agreement.

Pumping of water

314. Paragraph 43-25(d) provides:

The expression agricultural soil/water activity means:

(d)

the pumping of water solely for use in an agricultural activity if the pumping is conducted:

(i)

on an agricultural property where a core agricultural activity is conducted, or at a place adjacent to that property; and

(ii)

by the person who conducts the first-mentioned agricultural activity or by a person contracted by that person to conduct the pumping, other than a person so contracted that is a *public authority; or

315. Under paragraph 43-25(d), the pumping of any water qualifies as an agricultural water activity if:

•

the water is solely, that is, only or exclusively for use in an agricultural activity;

•

the pumping is carried out on a farm or at a place adjacent to the farm; and

•

the pumping is carried out by the farmer, a contractor to that farmer or by a subcontractor, other than a Commonwealth, State or Territory authority.

316. To qualify as an agricultural water activity under paragraph 43-25(d), the water being pumped must be solely, that is, exclusively or only, for use in an agricultural activity.^[133]

317. The pumping of water is not restricted to ground water. Paragraph 43-25(d) applies to the pumping of any water solely, that is, only or exclusively for use in the relevant agricultural activity.

318. The pumping of water by a public authority (usually carried out by a water authority) does not qualify as an agricultural water activity under paragraph 43-25(d).

319. A public authority is defined in section 110-5 as:

(a)

an instrumentality of the Commonwealth, a State or a Territory; or

(b)

an authority or body established for a public purpose by or under a law of the Commonwealth, a State or a Territory.

320. The construction or maintenance of facilities for the pumping, or the maintenance of infrastructure, including the laying of supply pipes, does not qualify as an agricultural water activity under paragraph 43-25(d).

Supply of water

321. Paragraph 43-25(e) provides:

The expression agricultural soil/water activity means:

(e)

the supply of water solely for use in an agricultural activity if:

(i)

the supply is to an agricultural property where a core agricultural activity is conducted; and

(ii)

the water comes from that property or a place adjacent to that property; and

(iii)

the supply is conducted by the person who conducts the first-mentioned agricultural activity or by a person contracted by that person to conduct the supply, other than a person so contracted that is a public authority.

Note: The agricultural activities referred to in the above paragraphs are given an expanded meaning by subsection 43-45(2).

322. Under paragraph 43-25(e), the supply of any water qualifies as an agricultural water activity if:

•

the water is solely, that is, only or exclusively for use in an agricultural activity;

•

the supply is to a farm;

•

the water comes from that farm or from a place adjacent to that farm; and

•

the supply is carried out by the farmer, a contractor to that farmer or by a subcontractor, other than public authority.

323. To qualify as an agricultural water activity under paragraph 43-25(e), the water being supplied must be solely, that is, exclusively or only, for use in an agricultural activity.^[134]

324. The supply of water is not restricted to ground water. Paragraph 43-25(e) applies to the supply of any water solely, that is, only or exclusively for use in the relevant agricultural activity.

325. The supply of water can include all off-road modes of supplying water, such as transportation by tanker.

326. The supply of water by a public authority (usually a water authority) does not qualify as an agricultural water activity.

327. The construction or maintenance of facilities for the supply, or the maintenance of infrastructure, including the laying of supply pipes, does not qualify as an agricultural water activity under this paragraph.

Agricultural construction activity

328. The definition of 'agriculture' in subsection 43-15(1) states in part:

Subject to subsection (2), the expression agriculture includes:

(g)

an agricultural construction activity

329. Agricultural construction activity is defined in section 43-30. Activities that constitute agricultural construction activities can broadly be described as:

•

construction or maintenance of fences;

•

construction or maintenance of firebreaks;

•

construction or maintenance of sheds, pens, silos or silage pits;

•

construction or maintenance of dams, water tanks and certain other water related systems; and

•

carrying out of earthworks for use in a core agricultural activity.

Construction or maintenance of fences

330. Paragraph 43-30(a) provides:

The expression agricultural construction activity means:

(a)

the construction or maintenance of fences:

(i)

by a person who conducts a *core agricultural activity; or

(ii)

by a person contracted by that person to conduct the construction or maintenance;

on the *agricultural property where the core agricultural activity is conducted

331. The construction or maintenance of fences is an agricultural construction activity under paragraph 43-30(a) if:

•

the construction or maintenance takes place on a farm; and

•

it is undertaken by the farmer, a contractor of that farmer or a subcontractor.

332. The construction or maintenance of fences includes the sinking of fence posts, the running of wire between posts and the replacement and repair of parts of a fence.

333. The transportation of fencing materials to an agricultural property for use in the construction of a fence is not an eligible activity under paragraph 43-30(a).

Construction or maintenance of firebreaks

334. Paragraph 43-30(b) provides:

The expression agricultural construction activity means:

(b)

the construction or maintenance of firebreaks:

(i)

by a person who conducts a core agricultural activity; or

(ii)

by a person contracted by that person to conduct the construction or maintenance;

on the agricultural property where the core agricultural activity is conducted or at a place adjacent to that property

335. The construction or maintenance of firebreaks is an agricultural construction activity under paragraph 43-30(b) if:

•

the construction or maintenance takes place on a farm or at a place adjacent to that farm; and

•

it is undertaken by the farmer, a contractor of that farmer or a subcontractor.

336. The Commissioner considers that a firebreak is a clearing or open space created or maintained in order to provide an obstacle to fire and to reduce or prevent damage or destruction of property by fire. The firebreak may be constructed within the property boundary, or around the property.

337. The construction or maintenance of a firebreak involves the clearing of trees, scrub, or other vegetation within the firebreak area by bulldozing, ploughing, grading or burning.

338. The construction or maintenance of a firebreak by a local council or shire authority under a statutory power or local government by-law is not eligible as an agricultural construction activity under paragraph 43-30(b). In this case, the council or authority does not carry out the construction or maintenance as a contractor to a farmer.

Construction or maintenance of sheds, pens, silos or silage pits (sundry farm structures)

339. Paragraph 43-30(c) provides:

The expression agricultural construction activity means:

(c)

the construction or maintenance of sheds, pens, silos or silage pits for use in an *agricultural activity if the construction or maintenance is conducted:

(i)

on an agricultural property where a core agricultural activity is conducted; and

(ii)

by the person who conducts the first-mentioned agricultural activity or by a person contracted by that person to conduct the construction or maintenance

340. The construction or maintenance of these sundry farm structures is an agricultural construction activity under paragraph 43-30(c) if:

•

the construction or maintenance takes place on a farm;

•

the sundry farm structures are for use in an agricultural activity; and

•

the construction or maintenance is carried out by the farmer, a contractor of that farmer or a subcontractor.

341. Activities that occur prior to construction of these sundry farm structures, for example, the transport of materials or plant and equipment to a farm for the purposes of carrying out the construction or maintenance, are not agricultural construction activities under paragraph 43-30(c).

342. The construction or maintenance of buildings such as administration offices and domestic premises are also not agricultural construction activities under paragraph 43-30(c). However, the construction or maintenance of an administration building for use in a core agricultural activity may be eligible for an off-road credit under the provisions of paragraph 43-15(1)(a) to 43-15(1)(d).^[135]

Construction or maintenance of dams, water tanks, water troughs, water channels, irrigation systems or drainage systems (relevant water structures)

343. Paragraph 43-30(d) provides:

The expression agricultural construction activity means:

(d)

the construction or maintenance of dams, water tanks, water troughs, water channels, irrigation systems or drainage systems, including (but not limited to) water pipes and water piping, for use in a core agricultural activity if the construction or maintenance is conducted:

(i)

on the agricultural property where the core agricultural activity is conducted; and

(ii)

by the person who conducts the core agricultural activity or by a person contracted by that person to conduct the construction or maintenance

344. The construction or maintenance of relevant water structures is an agricultural construction activity under paragraph 43-30(d) if:

•

the construction or maintenance takes place on a farm;

•

the relevant water structures are for use in a core agricultural activity; and

•

the construction or maintenance is carried out by the farmer, a contractor of that farmer or a subcontractor.

345. The Commissioner considers that an irrigation system includes all parts of that system, and can comprise a series of channels, associated pumping stations, pipes, water piping, sprinklers and spray systems. Similarly, the Commissioner considers a drainage system to include all parts of a system used to drain water from land. This includes artificial channels.

346. Activities that occur prior to the construction or maintenance, for example, the transport of materials or equipment to the agricultural property for use in the construction of the relevant water structures or systems, are not agricultural construction activities under paragraph 43-30(d).

Carrying out of earthworks for use in a core agricultural activity

347. Paragraph 43-30(e) provides:

The expression agricultural construction activity means:

(e)

the conducting of *earthworks for use in a core agricultural activity if the earthworks are conducted:

(i)

on the agricultural property where the core agricultural activity is conducted; and

(ii)

by the person who conducts the core agricultural activity or by a person contracted by that person to conduct the earthworks

Note: The agricultural activities referred to in the above paragraphs are given an expanded meaning by subsection 43-45(2).

348. The term earthworks is defined in section 43-60 to mean:

(a)

the forming or maintenance of levee banks or windbreaks; or

(b)

contour banking; or

(c)

land levelling or land grading.

349. The carrying out of earthworks is an agricultural construction activity under paragraph 43-30(e) if:

•

the earthworks are for use in a core agricultural activity;

•

the earthworks are carried out on the farm where that agricultural activity is carried on; and

•

they are carried out by the farmer, a contractor of that farmer or a subcontractor.

350. In the context of paragraph 43-30(e):

•

levee banks are man-made embankments put in place to prevent the overflow of a river or other water source, or small ridges surrounding fields to be irrigated;

•

the term 'windbreak' is commonly used to describe a specifically grown line of trees or a structure used to shelter crops or live-stock from the wind. In the context of the definition of 'earthworks' in section 43-60 the term has a more limited meaning. The Commissioner takes the view that it means an earth wall or an earth wall-like or levee-like structure which provides shelter for crops or live-stock;

•

contour banking is the practice of creating a system of banks across sloping ground to minimise soil erosion of topsoil by rain; and

•

land levelling or grading is the laying, spreading or compacting of earth, gravel or sand.

351. The activity of carrying out earthworks does not include activities undertaken to construct a road or to seal a road that is constructed through grading and levelling. An activity of this kind is considered road works, rather than earthworks.

Agricultural waste activity

352. The definition of agriculture in subsection 43-15(1) states in part:

Subject to subsection (2), the expression agriculture includes:

(h)

an agricultural waste activity

Removal or disposal of waste

353. Agricultural waste activity is defined in section 43-35 to mean:

(a)

the removal of waste products of an *agricultural activity from the *agricultural property where the activity is conducted; or

(b)

the disposal of waste products of an agricultural activity on the agricultural property where the activity is conducted.

354. A waste product can be described as something that is an excess material, or is unproductive and superfluous.^[136] The concept of waste embraces all unwanted and economically unusable or rejected by-products at any given place and time, and any other matter which may be discharged, accidentally or otherwise, to the environment.

355. The Administrative Appeals Tribunal in Esso Australia Ltd v. Chief Executive Officer of Customs^[137] (Esso Australia) found that, for the purposes of the diesel fuel rebate scheme 'waste' should not be confined to naturally occurring materials such as tailings or gangue. The Tribunal said that such a reading would adopt too narrow an approach to the interpretation of the legislation. The AAT found that domestic and industrial waste removed from offshore oil production platforms qualifies as 'a waste product of a mining operation'. The AAT said:

In the Tribunal's view the evidence clearly establishes that this waste is produced as a consequence of a mining operation and is, therefore, a waste product of a mining operation. It follows, and the Tribunal so finds, that the removal of this waste clearly falls within the ambit of s.164(7)(s) and is included in the definition of 'mining operation'. The waste products referred to in s.164(7)(s) are not to be read as being confined to naturally occurring materials such as tailings or gangue.^[138]

356. In Re BHP Billiton Petroleum Pty Ltd and Chief Executive Officer of Customs^[139] (BHP Billiton), the Tribunal affirmed the respondent's decision as to what constituted waste. The list of goods identified by the respondent included:

•

used and recovered used equipment for scrapping as unrepairable, for example, steel casing, steel tubing, drill bits, well heads and associated equipment;

•

general waste from the galley, for example, packaging, empty tins, off cuts in steel and other consumables, old gloves, scrapped wooden pallets, household type refuse from quarters; and

•

hazardous refuse (for example paint, acids, used battery cases).

357. While these cases deal with waste in the context of mining operations, they expand the meaning of 'waste products' to domestic and industrial waste in addition to tailings and gangue. Domestic waste is not a product of the actual extraction of the mineral but is still covered by the definition of a mining operation. Similarly, waste products of an agricultural activity may not be restricted to those products that are derived directly from a core agricultural activity.

358. In BHP Billiton,^[140] the AAT refined the definition of 'waste given in Esso Australia.^[141] The AAT said:

It does not seem to us that definitions of 'waste' are helpful. The phrase presently under consideration is 'waste products of a mining operation'. To the extent that dictionary definitions assist it is our opinion that the Macquarie Dictionary definition of 'waste product' is of the greatest assistance. In the present case the words 'as manufacture' in that definition can be replaced with 'as mining operations'.^[142]

359. In light of the comments made in Esso Australia and BHP Billiton, the Commissioner considers an appropriate definition of waste for the purposes of the definition of 'agriculture' to be 'material produced in a process, as agriculture, and discarded as useless when the process is completed'.

360. Examples of waste products of an agricultural activity include animal manures, wheat stubble, grape or plant pruning's, and animals that have died of natural causes on the agricultural property and which are not used as pet food. However, they do not include excess irrigation water drained from an irrigated farm.^[143] In determining whether something is a waste product of an agricultural activity, the facts and circumstances of each case must be considered.

361. The fact that someone other than the farmer may at some later time reuse a product discarded as waste by the farmer does not necessarily preclude it from being waste. For example, vine prunings discarded by the farmer and removed as waste from the agricultural property, but subsequently used to make a mulch or compost for sale, would still be regarded as the waste product of an agricultural activity.

362. For the purposes of paragraphs 43-35(a) and 43-35(b), the waste products removed or disposed of must be the waste products of an agricultural activity.

363. Under section 43-35, an agricultural waste activity is the removal from or disposal on an agricultural property of the waste products of an agricultural activity.

364. Removal in the context of paragraph 43-35(a) means the taking away, or the movement of the waste product from the agricultural property. Accordingly, the movement of waste from one part of the agricultural property to another part of the same property does not qualify as an agricultural waste activity under paragraph 43-35(a).

365. Disposal of waste products of an agricultural activity on the agricultural property means the elimination, destruction or, in any other manner, getting rid of a waste product within the confines of the agricultural property where the particular activity is carried on. This includes disposal by burying or incineration.

366. Under paragraph 43-35(b), the disposal of waste products of an agricultural activity must occur on the agricultural property where the agricultural activity that produced the waste is carried on.

Sundry agricultural activity

367. The definition of agriculture in subsection 43-15(1) states in part:

Subject to subsection (2), the expression agriculture includes:

(i)

a sundry agricultural activity.

368. Sundry agricultural activity is defined in section 43-40. Activities that constitute sundry agricultural activities can be broadly described as:

•

frost abatement;

•

hay baling;

•

planting and tending of trees;

•

firefighting activities;

•

service, maintenance or repair of vehicles or equipment;

•

storage of produce of a core agricultural activity;

•

packing or prevention of deterioration of the produce of a core agricultural activity;

•

weed, pest or disease control;

•

hunting or trapping for the purposes of a business; and

•

use of taxable fuel at residential premises for specified purposes.

Frost abatement

369. Paragraph 43-40(a) provides:

The expression sundry agricultural activity means:

(a)

frost abatement on an *agricultural property

370. Frost abatement is the mitigation or alleviation of the potential for damage to crops by frost. Frost abatement activities include the use of overhead sprinkler systems, orchard heaters, wind machines and frost alarms.

371. For a frost abatement activity to be a sundry agricultural activity under paragraph 43-40(a), the activity must be carried out on an agricultural property.

Hay baling

372. Paragraph 43-40(b) provides:

The expression sundry agricultural activity means:

(b)

hay baling on the agricultural property where the hay was cultivated

373. Hay baling involves the packing of hay or straw into bales or bundles in paddocks for storage or transportation and any subsequent pressing and re-baling of that hay.

374. For a hay baling activity to be a sundry agricultural activity, the activity must be carried out on the same agricultural property on which the hay was grown. It is not necessary that the hay is baled by the farmer. Provided the hay is baled on the agricultural property where it was grown, it does not matter who actually performs the baling.

Planting or tending of trees

375. Paragraph 43-40(c) provides:

The expression sundry agricultural activity means:

(c)

the planting or tending of trees on an agricultural property otherwise than for the purpose of felling

376. Planting of trees is the act of putting or setting seeds or young trees into the ground. Tending of trees means the undertaking of activities to ensure the survival of the trees or to enhance their growth, quality and vigour, for example, fertilising after planting, spraying trees against pests and diseases, eliminating weeds, fire protection measures and watering.

377. The planting and tending of trees is a sundry agricultural activity under paragraph 43-40(c) if the planting or tending of trees is carried out on an agricultural property and the trees are not planted or tended for the purpose of felling.

378. The planting or tending of trees on an agricultural property for use in the prevention of soil erosion, as windbreaks or for providing shade for live-stock is a sundry agricultural activity under paragraph 43-40(c).

Firefighting activities

379. Paragraph 43-40(d) provides:

The expression sundry agricultural activity means:

(d)

firefighting activities conducted:

(i)

by a person who conducts a *core agricultural activity; or

(ii)

by a person contracted by that person to conduct the firefighting activities;

on the agricultural property where the core agricultural activity is conducted or at a place adjacent to that property.

380. A firefighting activity is a sundry agricultural activity under paragraph 43-40(d) if:

•

the activity is carried out on a farm or at a place adjacent to that farm; and

•

the activity is carried out by a farmer, or by a contractor of that farmer or a subcontractor.

381. A firefighting activity is an activity undertaken to suppress a fire, or to prevent its spreading in order to preserve life and property.

382. Firefighting activities carried out on a farm or at a place adjacent to that farm by a volunteer fire brigade or country fire service do not qualify as a sundry agricultural activity under paragraph 43-40(d).

Service, maintenance or repair of vehicles or equipment

383. Paragraph 43-40(e) provides:

The expression sundry agricultural activity means:

(e)

the service, maintenance or repair of vehicles or equipment for use in an *agricultural activity if the service, maintenance or repair is conducted:

(i)

on an agricultural property where a core agricultural activity is conducted; and

(ii)

by the person who conducts the first-mentioned agricultural activity or by a person contracted by that person to conduct the service, maintenance or repair

384. The service, maintenance or repair of vehicles or equipment is a sundry agricultural activity under paragraph 43-40(e) if the service, maintenance or repair:

•

is of vehicles or equipment for use in an agricultural activity;

•

is carried out on a farm; and

•

is carried out by the entity that carries on the agricultural activity in which the vehicle or equipment is used, or by a contractor of that entity or a subcontractor.

385. The transport of vehicles or equipment away from the farm for service, maintenance or repair elsewhere is not an eligible activity under paragraph 43-40(e). Storage of produce

386. Paragraph 43-40(f) provides:

The expression sundry agricultural activity means:

(f)

the storage of produce of a core agricultural activity on an agricultural property where a core agricultural activity is conducted

387. Storage of produce is a sundry agricultural activity under paragraph 43-40(f) if the storage is:

•

of produce of a core agricultural activity; and

•

on a farm.

388. For the storage of produce to qualify as a sundry agricultural activity under paragraph 43-40(f), it is not necessary that the produce be from plants or animals grown or reared on the same farm on which it is stored.

Packing or prevention of deterioration of produce

389. Paragraph 43-40(g) provides:

The expression sundry agricultural activity means:

(g)

the packing, or the prevention of deterioration, of the produce of a core agricultural activity if:

(i)

the packing, or the prevention of deterioration, of the produce is conducted on an agricultural property where a core agricultural activity is conducted; and

(ii)

there is no physical change to the produce; and

(iii)

the packing, or the prevention of deterioration, of the produce does not constitute a processing of the produce

390. The packing or prevention of deterioration of produce is a sundry agricultural activity under paragraph 43-40(g) if the packing or prevention of deterioration is:

•

of produce of a core agricultural activity;

•

carried out on a farm;

•

does not result in any physical change to the produce; and

•

does not constitute a processing of the produce.

391. For the packing or prevention of deterioration of produce to qualify as a sundry agricultural activity, it is not necessary that the produce be from plants or animals grown or reared on the same farm on which it is stored. The activity carried out on another farm qualifies as a sundry agricultural activity under paragraph 43-40(g), provided the other requirements of the paragraph are met.

392. The term 'physical change' is not defined in the FT Act and takes on its ordinary meaning. The term 'physical change' means a change in the physical nature or appearance of a substance which occurs with no change in chemical composition, as when water freezes as ice.^[144]

393. In the Collector of Customs (Tas) v. Davis,^[145] the Federal Court considered whether the drying of parsley on the farm on which it was grown was eligible for diesel fuel rebate under the diesel fuel rebate scheme. Beaumont J quoted from an earlier decision of the AAT, which stated:

The fact that the parsley undergoes no physical change other than the removal of moisture further demonstrates a close relationship between the product before and after the process.^[146]

394. Beaumont J held that:

The activity in question is, first, necessary for the preservation of the crop: and secondly, both temporally and physically proximate to the primary activity of harvesting the crop.^[147]

395. Hence, the Federal Court found that the drying of parsley on the farm where it was grown was considered to be necessary for the preservation of the crop and did not constitute a physical change (other than the removal of moisture) in the produce.

396. In Vicmint,^[148] the AAT considered whether the distillation of peppermint oil by a farmer constituted a physical change. The AAT accepted that the 'crop' was the peppermint oil and that the oil, following distillation, was chemically and physically the same as it was before distillation. However, during the distillation process, there was a change in the oil from a liquid (within the leaf and stalk) to vapour, and then back to a liquid. This constituted two physical changes.

397. The AAT ruled that the extraction of peppermint oil from peppermint herbage by a process of distillation constituted a physical change, notwithstanding that the end product was a natural oil with the same physical characteristics as the oil that enters that process within or on the leaf and stalk or in separate form.

398. The Commissioner considers that the expression 'physical change', in the context of subparagraph 43-40(g)(ii), refers to a significant alteration in the physical appearance or physical composition of the produce, so that the produce is not recognisable as such. The Commissioner does not consider the dehydration (that is removal of water) of produce constitutes a physical change for the purposes of subparagraph 43-40(g)(ii).

399. In determining whether a physical change has occurred in a product the facts and circumstances of each case must be considered. It is important to consider the nature of the produce and the similarities between the agricultural produce and the product before and after the process.

400. The term 'processing' in subparagraph 43-40(g)(iii) is not defined in the FT Act and takes its ordinary meaning, which refers to the doing of 'a systematic series of actions directed to some end'.^[149]

401. The Commissioner considers that the term 'processing' in paragraph 43-40(g) has a narrow meaning and refers to the doing of something to the produce that changes its nature, form or condition into another product. A wider meaning of the term 'processing', in the context of paragraph 43-40(g) would mean that the simple drying of a crop by a farmer could constitute processing.

402. In Vicmint,^[150] the AAT also considered whether the distillation of peppermint oil constituted a processing of the crop. The AAT referred to Federal Commissioner of Taxation v. Hammersley Iron Pty Ltd^[151] in which Gobbo J examined various dictionaries and identified a general trend toward 'processing' constituting a change in nature, form or condition. The AAT held that the separation of the oil from the leaves and stalks constituted a processing of the oil.

403. The Commissioner takes the view that a crop is processed only if it undergoes a fundamental change in its nature, form or condition. Examples include the milling of grain, the extraction of juice from sugar cane or fruit and the canning of produce. The Commissioner considers that in each of these examples, there is a physical change to the produce as a result of the processing, which occurs after the produce is harvested or gathered in. The cutting of fruit and removal of its stone or kernel to aid dehydration does not constitute processing for the purposes of subparagraph 43-40(g)(iii).

404. The packing or prevention of deterioration of produce would include dehydration such as the drying of grains, tobacco leaves, herbs (for example parsley) and fruits (for example apricots) as well as humidity control and refrigeration of produce whilst awaiting transport.

Weed, pest or disease control

405. Paragraph 43-40(h) provides:

The expression sundry agricultural activity means:

(h)

weed, pest or disease control conducted:

(i)

by a person who conducts a core agricultural activity; or

(ii)

by a person contracted by that person to conduct the weed, pest or disease control

on the agricultural property where the core agricultural activity is conducted

406. Weed, pest or disease control is a sundry agricultural activity under paragraph 43-40(h) if it is carried out on a farm by a farmer, or by a contractor of that farmer, or a subcontractor.

407. A weed, pest or disease eradication program undertaken by a Commonwealth, State or Territory authority or by a local council is not a sundry agricultural activity under paragraph 43-40(h) unless the authority or council is specifically contracted by a farmer to carry out the activity.

408. A weed is 'a wild plant growing where it is not wanted'.^[152] Weed control involves activities undertaken to inhibit and eradicate weed growth, such as spraying, scarifying, ploughing or scraping of agricultural land.

409. A pest is 'a destructive animal, esp. an insect which attacks crops, live-stock, etc'.^[153] Pest control involves activities undertaken to inhibit or eradicate pests, including the spraying of crops or pasture and trapping or shooting vermin.

410. A disease is:

1 . an unhealthy condition of the body (or a part of it) or the mind; illness, sickness. 2 . a corresponding physical condition of plants.^[154]

Disease control involves activities to inhibit disease in live-stock or crops, for example, the spraying of crops or spreading of disease inhibiting agents on crops, such as fungicides, or the drenching of live-stock.

411. Where a pest control activity involves the hunting or trapping of foxes, rabbits and other vermin, the entitlement to a fuel tax credit for taxable fuel acquired for use in the activity depends on the status of the entity that acquires the taxable fuel. A farmer carrying out such an activity on their own farm, or an entity contracted by that farmer to carry out the activity on a farm carries on a sundry agricultural activity under paragraph 43-40(h).

412. An entity that carries on a business of hunting or trapping is entitled to a nil carbon reduction amount for taxable fuel that they acquire for use in these activities as they constitute sundry agricultural activities in their own right under paragraph 43-40(i).

Hunting or trapping

413. Paragraph 43-40(i) provides:

The expression sundry agricultural activity means:

(i)

hunting or trapping that is conducted for the purposes of a business, including the storage of any carcasses or skins obtained from the hunting or trapping

414. Hunting or trapping, including the storage of carcasses or skins obtained from these activities (hunting or trapping), are sundry agricultural activities under paragraph 43-40(i) if they are carried on for the purposes of a business.

415. Hunting or trapping, are not agricultural activities as defined in section 43-45, nor are the activities excluded from being in agriculture by paragraph 43-15(2)(b). Hunting or trapping is a specific activity that is included in the definition of agriculture for the purposes of the fuel tax credit scheme (and therefore the fuel tax credit system) but which is not an agricultural activity.

416. The ordinary meaning of the term 'hunting' is 'the practice of pursuing and killing wild animals, esp. for sport'.^[155] An example of hunting is kangaroo shooting for the purposes of obtaining meat and/or skins. The ordinary meaning of the term 'trapping' is 'to catch (an animal) in a trap'.^[156] Trapping refers to the setting and use of mechanical or other contrivances for the purposes of catching or killing game and other animals.

417. Under paragraph 43-40(i) the storage of any carcasses or skins obtained from hunting or trapping are also sundry agricultural activities. This often involves the use of mobile or fixed refrigeration equipment and the use of vehicles off-road to tow refrigeration equipment, mobile cages or other plant or equipment while hunting or trapping is taking place. Storage of carcasses or skins ends when they are removed from storage for sale or processing.

418. There is no locational requirement for the purposes of paragraph 43-40(i). Hunting and trapping can therefore occur at any place at which an entity has an entitlement to engage in these activities. However, the hunting and trapping must be carried out by an entity for the purposes of a business.

Use of taxable fuel 'at' residential premises

419. Paragraph 43-40(j) provides:

The expression sundry agricultural activity means:

(j)

the use of taxable fuel at residential premises in:

(i)

providing food and drink for; or

(ii)

providing lighting, heating, air-conditioning, hot water or similar amenities for; or

(iii)

meeting other domestic requirements of;

residents of the premises if:

(iv)

the use is by a person who conducts on a core agricultural activity; and

(v)

the residential premises are situated on the agricultural property where that activity is conducted.

420. The expression 'residential premises' is defined in section 110-5 as having the meaning given by section 195-1 of the GST Act. Section 195-1 of the GST Act in turn defines residential premises as meaning:

residential premises means land or a building that:

(a)

is occupied as a residence or for residential accommodation; or

(b)

is intended to be occupied, and is capable of being occupied, as a residence or for residential accommodation;

(regardless of the term of the occupation or intended occupation) and includes a *floating home.

421. The use of taxable fuel is a sundry agricultural activity under paragraph 43-40(j) if:

•

the use of the taxable fuel is at residential premises;

•

the use of the taxable fuel is in:

(i)

providing food and drink for; or

(ii)

providing lighting, heating, air-conditioning, hot water or similar amenities for; or

(iii)

meeting other domestic requirements of; residents of the premises;

•

the use of the taxable fuel is by a farmer;^[157] and

•

the residential premises are situated on a farm.^[158]

422. The activity covered by paragraph 43-40(j) is not an agricultural activity as defined in section 43-45 but a specific activity that is included as a sundry agricultural activity within the meaning of agriculture.

423. There is no restriction on the way in which taxable fuel may be used in meeting the domestic requirements of residents of the premises. For example, the taxable fuel may be used as a burner fuel to provide heating.

424. However, from 1 July 2006, if you acquire taxable fuel for use by you in generating electricity or for use as heating oil in the course of carrying on your enterprise, you are entitled to a fuel tax credit under section 41-5.^[159] For example, if you acquire taxable fuel for use in generating electricity 'at' residential premises on your agricultural property in which you accommodate farm workers such as shearers and drovers.

425. To be entitled to a nil carbon reduction amount under the qualifying use of agriculture, taxable fuel acquired for use at residential premises must meet a dual locational test.

426. The first part of this test is to determine whether the taxable fuel is acquired for use 'at' residential premises. When considering this issue, the Courts have taken the view that the diesel fuel must be purchased for use at a place that may be reasonably identified with the premises.^[160] The plant or generator in which the diesel fuel is to be used should thus be appurtenant to the premises and coherent with them, and it should be able to be said that it 'belongs' to the premises.

427. In Collector of Customs, Tasmania v. Flinders Island Community Association^[161] the Association operated a generator, which supplied electricity to nearby houses located on a housing estate. In relation to the meaning of 'at' residential premises under the diesel fuel rebate scheme, the Court found that the word 'at' required:

... a close connection between the use and the residential premises but not use within the residential premises. What is a sufficiently close connection must depend on the circumstances of the particular case... In this regard it appears that the Parliament intended to give a rebate in respect of use of diesel fuel for what might be called home generation of electricity for domestic purposes...

It is consistent with that policy, and the use of the word 'at', that the generation takes place in physical proximity to the supplied houses and that the resultant electricity be used only at premises falling within the definition of 'residential premises'.^[162]

428. In Collector of Customs v. Rottnest Island Authority^[163] the Authority was responsible for generating all electricity for use on the island. Electricity was generated for use in a number of residential premises, in a shopping complex, other shops, a garden golf complex, street lighting and other commercial venues.

429. In relation to the locational test, the Court considered that:

... the section requires that, because the existence of some appropriate heating or generating plant is clearly contemplated, the location of such a plant be in sufficient proximity to the premises as to enable it reasonably to be identified with the premises. It must be appurtenant to the premises and coherent with them. It must be able to be said of the plant using the fuel that it belongs to the premises even though it be not a part of them.^[164]

430. Although the above decisions were in respect of a separate category of eligible activities (diesel fuel purchased for use 'at residential premises') for the purposes of the diesel fuel rebate scheme, the Commissioner considers that that the principles established in them are relevant in determining whether the use of taxable fuel is 'at residential premises' under paragraph 43-40(j) of the definition of sundry agricultural activity.^[165]

431. The second part of the locational test is to determine whether the premises themselves are on a farm.^[166]

432. Taxable fuel acquired for use in the relevant activity must be acquired by a farmer. However, there is no requirement that the farmer be the resident of the premises. The use of taxable fuel at residential premises on a farm in providing for food, drinks, lighting, heating, air-conditioning, hot water or to meet the other domestic needs of itinerant workers, for example, shearers or drovers, working on the farm qualifies as sundry agricultural activities under paragraph 43-40(j).

Activities excluded from the definition of agriculture

433. Paragraphs 43-15(2)(a) and 43-15(2)(b) set out the activities or operations that are excluded in the definition of 'agriculture' in the FT Act.

Forestry or fishing operations

434. Paragraph 43-15(2)(a) provides:

The expression agriculture does not include:

(a)

fishing operations or forestry

435. Activities in fishing operations or forestry do not fall under the agriculture category. However, separate categories exist for fishing operations^[167] and forestry.^[168]

Activities not undertaken as part of a business to obtain produce for sale

436. Paragraph 43-15(2)(b) provides:

The expression agriculture does not include:

(b)

an activity referred to in subsection (1) (other than hunting or trapping that is conducted for the purposes of a business, including the storage of any carcasses or skins obtained from the hunting or trapping) unless the activity is conducted for the purposes of, or for purposes that will directly benefit, a business conducted to obtain produce for sale.

437. An activity is not excluded under paragraph 43-15(2)(b) if the activity is for purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale. The exception to this is hunting or trapping, including the storage of any carcasses or skins obtained from the hunting or trapping, that is carried out for the purposes of a business.

438. An activity will directly benefit a business undertaken to obtain produce for sale if there is a close and immediate benefit (that is, a positive effect) to the business arising from the activity in question. This will be the case, for example, for contract harvesters. Whilst their own business is not for the purposes of obtaining produce for sale for themselves, the activities of contract harvesters in harvesting a crop for a farmer who carries on a business of obtaining produce for sale will directly benefit the business of the farmer.

439. The use of the word 'business' in paragraph 43-15(2)(b) denotes a commercial concern carried on with the aim of making a profit. Paragraph 145 of this Ruling sets out the indicia of when a person carries on a business.

440. The effect of the exclusion from eligibility under the agriculture category of activities that are not carried on as part of a 'farming' business is that persons engaged in so-called 'amenity agriculture', for example, hobby farms or agricultural colleges or persons growing flowers for public presentation^[169] will have to subtract the carbon reduction applicable to the relevant taxable fuel.

441. Activities such as growing flowers and plants for pleasure or presentation, or developing and maintaining parks, gardens, recreation reserves or similar areas, whilst exhibiting some of the characteristics of agriculture are excluded from the definition of agriculture by paragraph 43-15(2)(b). These activities are not undertaken for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.

Status of non-profit bodies

442. The fact that an entity that is carrying on agricultural activities may be a non-profit body will not, in itself, prohibit the entity from satisfying the requirement that its activities are carried on for the purpose of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.

443. Therefore, provided the agricultural activities are conducted by a non-profit body in the course of carrying on its enterprise and:

•

are carried on in a commercial manner;

•

would meet the standard business tests if the body were not non-profit; and

•

the body is registered or required to be registered for GST,^[170]

it will have a nil carbon reduction amount if it acquires taxable fuel for use in an activity that qualifies as agriculture.

444. However, where an agricultural activity conducted by a non-profit body would not meet the normal business tests - for example where the present and prospective cash flows from the sale of produce are nominal in relation to expenditure - the non-profit body's activities are excluded from the definition of agriculture by paragraph 43-15(2)(b). Therefore the non-profit body must reduce its fuel tax credit amount by the carbon reduction applicable to the taxable fuel.

Taxable fuel acquired for use in propelling a vehicle on a public road

445. You are entitled to a fuel tax credit under section 41-5 of the FT Act for taxable fuel you acquire for use in a vehicle^[171] with a GVM greater than 4.5 tonnes, travelling on a public road.

Meaning of 'public road'

Roads that are public roads

446. A 'road' is defined in common law as a way from one place to another which enables passage between the two. It is well established that, under the common law, a 'road' becomes a 'public road' when the owner of the land has unequivocally indicated an intention to dedicate the road for public use, and the public has accepted the proffered dedication.^[172]

447. However, in Australia the vast majority of public roads are constructed by government. In Brodie and Anor v. Singleton Shire Council,^[173] Kirby J observed:

.... from the start, the building of public highways and roads in Australia was a responsibility of government, and eventually of statutory bodies (and not parishes and men thereof as in England...)^[174]

448. There are statutory authorities in each state and territory which are responsible for the construction, management and maintenance of the public road transport infrastructure within their own jurisdictions. Roads which are constructed, managed or maintained by these authorities are public roads. These roads fall into three main categories, being:

•

national highways;

•

state and territory highways and main roads; and

•

local roads and streets.

National highways

449. The roads making up the national highways network are constructed and maintained by the states and territories out of funding provided by the Federal Government. These major highways are easily identifiable. They are public roads for the purposes of section 43-15.

State and territory highways and main roads

450. Each state or territory has a statutory authority^[175] which is responsible for the construction of highways and main roads within the state or territory. State and territory highways and main roads are the major connecting roads between towns.

451. It is usually the case that the governing statute provides for the formal declaration, proclamation or dedication of the highways and main roads for which the particular state or territory statutory authority is responsible.^[176]

452. The Commissioner considers that, in each state or territory, the roads which are constructed and maintained by the state or territory authority which has the primary responsibility for highways and main roads are public roads for the purposes of section 43-15.

Local roads

453. Within each state and the Northern Territory there are numerous local government authorities with statutory responsibility for the construction and maintenance of local roads within their own areas.

454. Local roads are the smaller connecting roads and suburban streets within the boundaries of a local government area.

455. The powers of local government authorities in each state and the Northern Territory are enumerated in a statute which creates local government in that state or territory. The legislative powers and responsibilities in each statute apply to each individual local government area within the same state or territory. However, the statutes are not identical and this gives rise to variations according to the state or territory in which a particular local government area is located.

456. Although local government statutes do not always provide for dedication or declaration of roads as public roads, such statutes normally vest the ownership of local roads in a local government authority.^[177] In Australia, the vesting by statute in local government authorities of fee simple in land over which there are public streets leaves the streets dedicated to the public.^[178] As noted by Murray CJ in Attorney-General; Ex rel Australian Mutual Provident Society v. Corporation of the City of Adelaide:^[179]

... although the fee simple of all public streets within a municipality is vested in the Corporation of that Municipality, I think it is clear that the Corporation has not an unencumbered estate in the land, and an unrestricted right to use it in any manner it pleases. The surface is a street dedicated to the public, and it is as a street that the Corporation acquires its title to the land ... It holds, therefore, subject to the rights of the public to use the street for passing and re-passing, except in so far as those rights may be taken away or limited by statute.^[180]

457. The Commissioner considers that, in each local government area, those roads and streets which are vested in, constructed or maintained by a local government authority for general public usage are public roads for the purposes of section 43-15.

Public roads under the common law

458. If a road is not under the control and management of a state or territory authority which is responsible for the provision of road infrastructure to the public, then whether the road is a 'public road' under the common law is a question of fact.

459. In order to establish that a road has been dedicated as a public road at common law, there must be established an 'unequivocal indication of the intention of the owner of the land to dedicate it to the public as a road'.^[181]

460. To establish whether a land owner has dedicated a road as a public road under the common law, some of the matters to be considered are:

•

whether there has been a declaration of an intention to dedicate;

•

delineation on maps or plans of roads set apart for public use;

•

use by the public;

•

whether vehicles must be registered to use the road and state or territory traffic laws are applicable while the vehicles use the road; or

•

the expenditure of money by public bodies in forming or maintaining the land as a road.

461. When considered with all the relevant evidence, the above matters may amount to an unequivocal indication of the intention of the owner of the land to dedicate it to the public as a road. Where that dedication is accepted by the members of the public as such, the road is a public road.

462. However, the courts have indicated that caution is necessary in determining whether a dedication of a road has been made. In President of the Shire of Narracan v. Leviston^[182] Barton J said:

... by placing too liberal a construction in favour of the public and against the landowner upon acts of passage which are tolerated by him, there is a danger lest, in the sparsely settled districts of a country like this, where roads are few and unmade, and mutual concessions on the part of the land owners and the public are necessary, land owners should be put upon the defensive, and be forced to set obstructions in the way of every act which, in a long course of time, might be construed as the assertion of a right of public highway.^[183]

463. The comments of Barton J were referred to with approval by Lockhart J in Attorney-General for the Northern Territory of Australia v. Minister for Aboriginal Affairs and Others.^[184]

Roads that are not public roads

Roads managed by statutory authorities not having responsibility for highways, main roads and local roads

464. Where a road is constructed or maintained by a statutory authority principally and primarily for the purposes of carrying out the statutory objects of the authority, and any public use of the road is subordinate to those statutory objects, then the road is not a public road.

465. Where such a statutory scheme confers a limited right of public access, which is subordinate to the main objects of the statute, then members of the public have a lesser entitlement to that access than the entitlement they have to use public highways, main roads, local roads and suburban streets. The Commissioner considers that where the public does not have a plenary right of access and use, a road cannot be characterised as a public road.

466. Similar principles apply where a statute confers upon an authority the responsibility for control and management of land on which a forest or plantation exists. The authority may make and maintain roads to have access within the forest or plantation for their forestry management purposes. Whilst members of the public may use these roads, their use is subordinate to the use of the authority, which may deny, without any notice, access to the road by members of the public. These roads are not public roads.

Roads over privately owned land

467. An owner of private property may permit members of the public to pass over the property. A person may lawfully enter private land where the person has an express or implied invitation, licence, permission, lawful authority or consent of the person in possession of the land.^[185] A person who initially enters land with lawful authority becomes a trespasser if the consent of the owner is revoked.^[186]

468. The use of a road over private land by members of the public does not create a public road, notwithstanding that the owner of the land does not hinder the use of the road by the public. Private land cannot become a public road without an effective act of dedication by the owner.^[187]

Appendix 2 - Your comments

469. You are invited to comment on this draft Ruling, including the proposed date of effect. Please forward your comments to the contact officer by the due date.

470. A compendium of comments is prepared for the consideration of the relevant Rulings Panel or relevant tax officers. An edited version (names and identifying information removed) of the compendium of comments will also be prepared to:

•

provide responses to persons providing comments; and

•

be published on the ATO website at www.ato.gov.au.

471. Please advise if you do not want your comments included in the edited version of the compendium.

Appendix 3 - Detailed contents list

472. The following is a detailed contents list for this Ruling:

Not previously issued as a draft

References

ATO references:
NO 1-3YX0O3B

Related Rulings/Determinations:

PGBR 2005/3
TR 97/11
TR 97/11ER
TR 2006/10
FTD 2006/3
FTD 2009/1
FTD 2010/1
MT 2006/1
FTR 2006/1
FTR 2008/1
FTR 2012/D2
FTR 2012/D3

Subject References:
acquire
acquire, or manufacture in, or import into, Australia
apportionment
apportionment of fuel
business
business purposes
carrying on your enterprise
agricultural activities
agricultural construction activity
agricultural property
agricultural soil/water activity
agricultural waste activity
apiculture
apportionment of fuel
carrying out of earthworks for use in a core agricultural activity
claims
core agricultural activity
cultivation of the soil
cultivation or gathering in of crops
diesel fuel
eligible use
energy grant
energy grants (credits) scheme
gathering in
grants
horticulture
in
live-stock activity
off-road credits scheme
off-road diesel fuel
off-road scheme
on-road credits scheme
pasturage
person who carries on a core agricultural activity
place adjacent to an agricultural property
public road
rearing of live-stock
solely
status of contractors and subcontractors
sundry agricultural activity
vehicle
viticulture

Legislative References:
ANTS(GST)A 1999
ANTS(GST)A 1999 9-20
ANTS(GST)A 1999 Div 23
ANTS(GST)A 1999 184-1
FTA 2006 41-5(1)
FTA 2006 41-5(2)
FTA 2006 41-15
FTA 2006 41-25
FTA 2006 Subdiv 41-B
FTA 2006 42-5
FTA 2006 Div 43
FTA 2006 43-8(4)
FTA 2006 43-8(4)(b)
FTA 2006 43-10
FTA 2006 Subdiv 43-B
FTA 2006 43-15
FTA 2006 43-15(1)
FTA 2006 43-15(1)(a)
FTA 2006 43-15(1)(b)
FTA 2006 43-15(1)(c)
FTA 2006 43-15(1)(d)
FTA 2006 43-15(1)(e)
FTA 2006 43-15(1)(f)
FTA 2006 43-15(1)(g)
FTA 2006 43-15(1)(h)
FTA 2006 43-15(1)(i)
FTA 2006 43-15(2)
FTA 2006 43-15(2)(a)
FTA 2006 43-15(2)(b)
FTA 2006 43-20
FTA 2006 43-20(1)
FTA 2006 43-20(1)(a)
FTA 2006 43-20(1)(b)
FTA 2006 43-20(1)(c)
FTA 2006 43-20(1)(d)
FTA 2006 43-20(2)
FTA 2006 43-25
FTA 2006 43-25(a)
FTA 2006 43-25(b)
FTA 2006 43-25(c)
FTA 2006 43-25(d)
FTA 2006 43-25(e)
FTA 2006 43-30
FTA 2006 43-30(a)
FTA 2006 43-30(b)
FTA 2006 43-30(c)
FTA 2006 43-30(d)
FTA 2006 43-30(e)
FTA 2006 43-35
FTA 2006 43-35(a)
FTA 2006 43-35(b)
FTA 2006 43-40
FTA 2006 43-40(a)
FTA 2006 43-40(b)
FTA 2006 43-40(c)
FTA 2006 43-40(d)
FTA 2006 43-40(e)
FTA 2006 43-40(f)
FTA 2006 43-40(g)
FTA 2006 43-40(g)(ii)
FTA 2006 43-40(g)(iii)
FTA 2006 43-40(h)
FTA 2006 43-40(i)
FTA 2006 43-40(j)
FTA 2006 43-45
FTA 2006 43-45(2)
FTA 2006 43-45(2)(a)
FTA 2006 43-45(2)(b)
FTA 2006 43-45(2)(c)
FTA 2006 43-45(2)(d)
FTA 2006 43-50
FTA 2006 43-55
FTA 2006 43-60
FTA 2006 43-65
FTA 2006 43-70
FTA 2006 43-75
FTA 2006 Div 44
FTA 2006 Subdiv 45A
FTA 2006 Div 60
FTA 2006 60-5(1)
FTA 2006 61-15
FTA 2006 61-20
FTA 2006 Div 65
FTA 2006 65-5(1)
FTA 2006 65-5(2)
FTA 2006 65-5(3)
FTA 2006 65-5(4)
FTA 2006 110-5
FT (Consequential and Transitional Provisions) Act 2006
FT (Consequential and Transitional Provisions) Act 2006 Sch 3 10
FT (Consequential and Transitional Provisions) Act 2006 Sch 3 11
Customs Act 1901
Customs Act 1901 164
Customs Act 1901 164(7)
Customs Act 1901 164(7)(c)
Customs Act 1901 164(7)(ca)
Customs Act 1901 164(7)(s)
Customs Tariff Act 1995 9
Excise Act 1901
Excise Act 1901 78A
Excise Tariff Act 1921
Real Property Act 1886
Local Government Act 1928-1941 (Vic) 249(5)
Local Government Act 1999 (SA) 208(1)
Main Roads Act 1930 (WA) 13
Roads Act 1993 (NSW) 13
Roads and Jetties Act 1935 (Tas) 7
Transport Act 1983 (Vic) Sch 2
Transport Infrastructure Act 1994 (Qld) [23]

Case References:
Attorney-General; Ex rel Australian Mutual Provident Society v. Corporation of the City of Adelaide
[1931] SASR 217

Attorney-General for the Northern Territory v. Minister for Aboriginal Affairs (NSW G235 of 1988), unreported decision, 3 August 1988

Attorney-General for the Northern Territory of Australia v. Minister for Aboriginal Affairs and Others
(1989) 23 FCR 536
Australian National Railways Commission v. Collector of Customs SA
(1985) 8 FCR 264
(1985) 69 ALR 367
Australian Native Landscapes Pty Ltd v. Collector of Customs
[1997] 81 FCA (21 February 1997)
(1997) 24 AAR 353
(1997) 44 ALD 531
Barker v. R
(1983) 153 CLR 338
(1983) 47 ALR 1
(1983) 57 ALJR 426
Belmont Farm v. Minister of Housing and Local Government
(1962) 13 P & CR 417
Brodie and Anor v. Singleton Shire Council
(2001) 206 CLR 512
(2001) 180 ALR 145
Case 21/98
(1998) 98 ATC 263
(1998) 40 ATR 1166
AAT No. 13,430
[1998] AATA 874
Chief Executive Officer of Customs v. WMC Resources Ltd (as agent for East Spar Alliance)
(1998) 158 ALR 241
(1998) 87 FCR 482
Cohns Industries Pty Ltd v. Deputy Federal Commissioner of Taxation (Cth)
(1979) 37 FLR 508
(1979) 24 ALR 658
Collector of Customs v. Pozzolanic Enterprises Pty Limited
(1993) 43 FCR 280
(1993) 115 ALR 1
Collector of Customs v. Reg Russell and Sons Pty Ltd No. WAG 95 of 1994 FED No. 421/95

Collector of Customs v. Rottnest Island Authority
(1994) 119 ALR 406
(1994) 48 FCR 177
Collector of Customs (Tas) v. Davis
(1989) 23 FCR 378
(1989) 10 AAR 439
Collector of Customs, Tasmania v. Flinders Island Community Association
(1985) 7 FCR 205
60 ALR 717
Cowell v. Rosehill Racecourse Co Ltd
(1937) 56 CLR 605
(1937) 11 ALJR 32-HCA- 22/04/1937
[1937] ALR 273
Cuisenaire v. Reed
(1962) 5 FLR 180
[1963] VR 719
Esso Australia Ltd v. Chief Executive Officer of Customs
[1998] AATA 366
Federal Commissioner of Taxation v. BHP Minerals Ltd
(1983) 51 ALR 166
14 ATR 389
83 ATC 4407
Federal Commissioner of Taxation v. Hammersley Iron Pty Ltd
(1980) 33 ALR 251
Federal Commissioner of Taxation v. Payne
(2001) HCA 3
(2001) 46 ATR 228
2001 ATC 4027
(2001) 202 CLR 93
(2001) 177 ALR 270
(2001) 75 ALJR 442
Hemens (Valuation Officer) v. Whitsbury Farm and Stud Ltd and other appeals
[1987] 1 All ER 430
In the Estate of Nicholas
[1955] VLR 291
[1955] ALR 817
Kiossess v. Corporation of the City of Henley and Grange
(1971) 6 SASR 186
(1971) 33 LGRA286
Lincoln Hunt Australia Pty Ltd v. Willesee
(1986) 4 NSWLR 457-NSWSC-13/02/1986
Lippett v. Robertson
[1953] SASR 13
Marsal Pty Ltd & Ors v. Comptroller of Stamps (Vic)
(1982) 82 ATC 4536
Permanent Trustee Company of New South Wales Ltd v. Campbelltown Municipal Council
(1960) 105 CLR 401
[1961] ALR 164
(1960) 6 LGRA 340
President of the Shire of Narracan v. Leviston
(1906) 3 CLR 846
(1906) 12 ALR 294
Proserpine Co-operative Sugar Milling Association v. Commissioner of Taxation
(1996) 96 ATC 5016
(1996) 34 ATR 129
Randwick Municipal Council v. Rutledge
(1959) 102 CLR 54
Re BHP Billiton Petroleum Pty Ltd and Chief Executive Officer of Customs
[2002] AATA 705
50 ATR 1156
(2002) 69 ALD 453
Re BHP Petroleum and Collector of Customs
(1987) 11 ALD 413
6 AAR 245
Re Central Norseman Gold Corporation Limited and Collector of Customs, Western Australia AAT No. W84/118
(1985) 8 ALN N288
Re City of Nunawading and Comptroller-General of Customs No. V93/540
AAT No.9758
(1994) 36 ALD 628
Re Day and Deputy Commissioner of Taxation
[2004] AATA 1305 (7 December 2004)
58 ATR 1189
Re Elf Farm Supplies Pty Ltd and Chief Executive Officer of Customs
[1998] AATA 929
(1998) 28 AAR 485
Re French Island Barge Pty Ltd and Collector of Customs No.
V92/255 AAT No. 8625
Re Impast Pty Ltd and Collector of Customs No. W91/290
AAT No. 8355
Re LM & TMR Quinlivan and the Quinlivan Family Trust and the Chief Executive Officer of Customs
[1997] AATA 11810
(1997) 25 AAR 142
Re McDermott Industries and V- - Chief Executive Officer of Customs
(1997) 47 ALD 134
Re Proprietary Articles Trade Association of South Inc.
[1949] SASR 88
Re Raymond Cedric and Brian Richard Wallace v. CEO of Customs AAT No. 13,015
[1998] AATA 633 (25 June 1998)
(1998) 27 AAR 430
Re Rylane Pty Ltd and Collector of Customs No. W94/26
AAT No. 9692
[1994] AATA 9692
Re Vicmint Partners Pty Ltd and Chief Executive Officer of Customs
(1997) 48 ALD 475
Re Wandoo Alliance Pty Ltd v. Chief Executive Office of Customs
[2001] AATA 801
(2001) 34 AAR 98
Re Water Administration Ministerial Corporation and Chief Executive Officer of Customs (13 August 1997) N96/1212
AAT No. 12,111
Sisters of Mercy Property Association v. Newtown and Chilwell
(1944) 69 CLR 369
Vickery v. Municipality of Strathfield
(1911) 11 SR (NSW) 354
(1911) 28 WN (NSW) 107-NSWSC-31/08/1911
YZ Finance Co. Pty Ltd v. Cummings
(1963-1964) 109 CLR 395

Other References:
The Australian Oxford Dictionary, 1999, Oxford University Press, Melbourne
Customs and Excise Legislation Amendment Bill 1995
Explanatory Memorandum to the Customs and Excise Legislation Amendment Bill 1995
The Macquarie Dictionary, 2001, rev. 3rd edn, The Macquarie Library Pty Ltd, NSW
New Shorter Oxford English Dictionary (1993)
Oxford Dictionary of English (2003)
PSLA 2010/3
Revised Explanatory Memorandum to the Fuel Tax Bill 2006 and the Fuel Tax (Consequential and Transitional Provisions) Bill 2006
Second Reading Speech, Customs and Excise Legislation Amendment Bill 1995
Supplementary Explanatory Memorandum to the Customs and Excise Legislation Amendment Bill 1995