Excise - Payments - Diesel and Alternative Fuels Grants Scheme - fuel used in refrigerated trailers transported by contractors

Can a company claim an on-road grant under section 9 of the Diesel and Alternative Fuels Grants Scheme Act 1999 (the Act) for fuel used in a refrigerated trailer that is transported by the prime mover of a contractor?

Yes, a company can claim an on-road grant under section 9 of the Act for fuel used in a refrigerated trailer that is transported by the prime mover of a contractor.

A company conducts a refrigerated goods transport business using their own prime movers and refrigerated trailers with a gross vehicle mass (GVM) of 20 tonnes or more. Normally the refrigerated trailers are transported by the company's own prime movers. Sometimes the refrigerated trailers are transported by other contractors who supply the fuel in their prime movers. However, the company supplies the fuel used in the refrigerated trailers while they are being transported by the contractors.

Section 9 of the Act relevantly states: '(1) You are entitled to a fuel grant for the use of diesel fuel or alternative fuel in a vehicle that has a GMV of 20 tonnes or more if you purchased the diesel fuel or alternative fuel, or imported it into Australia. (2) However, you are only entitled to the grant to the extent that you use the diesel fuel or alternative fuel, in carrying on your enterprise, in operating the vehicle on a public road in Australia.'

Therefore, to be entitled to a fuel grant under the on-road scheme: • The transport company must purchase and use the diesel fuel in a vehicle with a GVM of 20 tonnes or more; and • The vehicle must be operated on a public road in Australia as part of the company's enterprise.

As discussed in Excise Bulletin EB 2001/1, a vehicle is not defined in the Act and therefore it takes on the ordinary meaning. The revised third edition of the Macquarie dictionary states: 'A vehicle is any receptacle, or means of transport in which something is carried or conveyed.'

The Act does not restrict the eligibility for an on-road grant to motor vehicles so a refrigerated trailer will qualify as a vehicle. Therefore, the diesel fuel purchased and used to power the refrigeration unit attached to a trailer would satisfy the first requirement above, provided the GVM was 20 tonnes or more.

Enterprise is defined in subsection 5(1) of the Act as having: '...the meaning given by section 38 of the A New Tax System (Australian Business Number) Act 1999 (ABN Act)'

Section 38 of the ABN Act states in part: 'An enterprise is an activity, or series of activities, done: (a) in the form of a business; or (b) in the form of an adventure or concern in the nature of trade ...'

The company's operations are to transport perishable goods on contract using refrigerated trailers. The company normally uses its own prime movers to transport the refrigerated trailers, however, sometimes they use the prime movers of other contract transport operators. In both situations, the company is clearly conducting an enterprise and the refrigerated trailer is being operated on a public road as part of that enterprise.

Accordingly, the diesel fuel purchased and used by the company in the refrigerated trailers that it uses as part of its enterprise is eligible for a diesel fuel grant even when the trailers are transported on a public road by the prime movers of other contractors.