Issue
Is diesel fuel, purchased by an entity to generate electricity for use in the course of carrying on an enterprise as a research station at a remote location, eligible for diesel fuel rebate under paragraph 164(1)(ad) of the Customs Act 1901 (Customs Act) and/or paragraph 78A(1)(ad) of the Excise Act 1901 (Excise Act)?
Decision
The diesel fuel used for power generation for research purposes is not eligible for rebate under paragraph 164(1)(ad) of the Customs Act and/or paragraph 78A(1)(ad) of the Excise Act.
Facts
The applicant carries on an enterprise as a research station, which is not able to be connected to the national power grid.
The applicant submits that its enterprise is eligible for the rebate under paragraph 164(1)(ad) of the Customs Act and paragraph 78A(1)(ad) of the Excise Act because: • it carries on a business in a remote location which does not have access to a commercial supply of electricity; and • all the diesel it uses for power generation is linked to the conduct of its business.
Reasons for Decision
Paragraph 164(1)(ad) of the Customs Act and paragraph 78A(1)(ad) of the Excise Act extended the diesel fuel rebate from 1 July 2002 to entities at particular premises to generate electricity for use in the course of carrying on, at those premises, an enterprise that meets the following two criteria: (i) it does not have, at those premises, ready access to a commercial supply of electricity; and (ii) it has, as its principal purpose, the retail sale of goods or services or the provision of hospitality.
The applicant's premises meet the first criterion because there is no ready access to a commercial supply of electricity.
However, the applicant cannot satisfy the second criterion. The applicant's enterprise cannot be characterised as one, which has as its principal purpose the 'retail sale of goods or services or the provision of hospitality'. The applicant entity's principal purpose is research and education.