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For the purposes of subparagraph 78A(1B)(1)(aa) of the Excise Act 1901 (EA), is diesel fuel rebate payable for diesel fuel purchased for use in the maintenance of forestry roads used for transporting felled timber to a mill located outside the forest or plantation?

Diesel fuel rebate is payable for the maintenance of forestry roads, as provided by subparagraph 78A(1B)(1)(aa) of the EA, if the roads are integral to the transportation of timber felled in a forest or plantation.

The applicant purchased diesel fuel for maintenance of forestry roads. The forestry roads are used for the transportation of felled timber from the forest to a mill located outside the forest.

Subparagraph 78A(1B)(1)(aa) of the (EA) provides that a rebate is payable to a person who purchases diesel fuel for use by him or her in primary production other than for the purposes of propelling a road vehicle on a public road.

Subsection 78A(7) of the EA provides that the same respective meaning is attributed to primary production as appears in section 164 of the Customs Act 1901 (CA). Subsection 164(7) of the CA provides that primary production includes forestry.

Subsection 164(7) of the CA also specifically defines forestry. Paragraph (f) of the definition of "forestry" includes 'the making and maintaining in a forest or plantation referred to in paragraph (a) or (b) of a road that is integral to the activities referred to in paragraph (a), (b) or (c)'. Paragraph (c) provides that forestry includes 'the transporting, milling or processing, in a forest or plantation, of timber felled in the forest or plantation'.

The diesel fuel at issue was used in the maintenance of a forestry road that is used for the purpose of transporting felled timber to a mill. This activity satisfies paragraph (f) of the forestry definition in so far as the road is integral to the transporting, in a forest or plantation, of timber felled in the forest or plantation.

This activity amounts to forestry pursuant to paragraph (f) of the definition of 'forestry'. On this basis a rebate of duty is payable under subparagraph 78A(1B)(1)(aa) of the EA.