Issue
Does the generation of electricity to run pumps on a non-propelled vessel servicing the fishing fleet, fall within the definition of 'fishing operations' for the purposes of eligibility for the diesel fuel rebate under subsection 164(7) of the Customs Act 1901 (Customs Act) and paragraph 78(1)(aa) of the Excise Act 1901 (Excise Act)?
Decision
Yes. Generation of electricity to run pumps and refrigeration on a non-propelled vessel servicing the fleet is an eligible activity for the purposes of subsection 164(7) of the Customs Act and paragraph 78A(1)(aa) of the Excise Act.
Facts
The applicant operates a fuel bunker barge.
The barge is non-propelled and is anchored offshore. It provides services to the fishing fleet (Australian vessels).
Fuel is used on the barge to generate electricity for pumps which are used in supplying fuel and drinking water to the fleet and to power a refrigerated container for storage of the catch in emergencies, such as refrigeration breakdown on board vessels which form part of the fleet.
Reasons for Decision
Under paragraph 78A(1)(a) of the Excise Act and paragraph 164(1)(aa) of the Customs Act a rebate is payable to a person who purchases diesel fuel for use by the person in 'primary production'.
'Primary production' means agriculture, fishing operations or forestry.
For the purposes of the diesel fuel rebate, 'fishing operations' are defined in subsection 164(7) of the Customs Act. The definition contains a list of activities that are related to fishing.
The activities described under the definition of 'fishing operations' include the operation of a 'dedicated mother vessel' in connection with the activities referred to in paragraphs (a), (b), (c) or (d) of the definition. The term 'dedicated mother vessel' is not defined in the legislation. The terms 'dedicated mother vessel', 'mother vessel' and 'mother ship' are used interchangeably within the fishing industry.
The ordinary meaning of the term 'dedicated mother vessel' is that of a larger ship that is wholly committed to providing facilities and supplies to a group or number of smaller ships.
The fuel bunker barge is registered as a dumb barge and has no method of propulsion. However, the functions of the vessel in providing services including fuel and stores and emergency refrigeration are considered to be operations of a 'dedicated mother vessel'.
Rebate is payable for fuel used in the operation of a 'dedicated mother vessel' for activities in the taking, catching or capturing of fish and for the processing of fish on board vessels. Accordingly, diesel fuel used on the fuel bunker barge to generate electricity for pumps for supplying fuel and drinking water to the fishing fleet and to power a refrigerated container for storage of the catch in emergency situations, such as refrigeration breakdown on board vessels which form part of the fleet, is being used in 'fishing operations' and is eligible for rebate.