Issue
Is the commercial production of mushroom substrate for sale 'horticulture' as defined in section 33 of the Energy Grants (Credits) Scheme Act 2003?
Decision
No. The commercial production of mushroom substrate for sale is not 'horticulture' as defined in section 33 of the EGCSA.
Facts
The client operates a business that produces mushroom substrate for sale to mushroom growers and others.
Reasons for Decision
Section 33 of the Act defines 'horticulture' as including: (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
As horticulture is defined inclusively in the legislation, an activity can be considered 'horticulture' if it falls within any of the activities specified in the definition of horticulture or the common meaning of the term.
The cultivation, propagation or production of fruit, trees, seeds etc. involve a number of activities undertaken over a period of time to arrive at the end product. It is evident from the Federal Court case Australian Native Landscapes Pty Ltd v. Collector of Customs (1998) 24 AAR 353; (1997) 44 ALD 531 ( Australian Native Landscapes' Case ) that certain activities undertaken separately are not horticulture, but when undertaken as part of an overall process to cultivate, propagate or produce fruit, trees, seed etc by the person who ultimately grows the final product are horticulture.
In Australian Native Landscapes' Case , the Federal Court considered whether the commercial manufacture of potting mix was 'horticulture' under the Diesel Fuel Rebate Scheme , which was the precursor to the Energy Grants (Credits) Scheme, and was administered under the Excise Act 1901 and the Customs Act 1901 . The Customs Act contained a definition of 'horticulture' in subsection 164(7). That definition was the same as the definition contained in section 33 of the EGCSA and the findings from that decision remain relevant.
The Federal Court held that the manufacture of potting mix for commercial sale was not 'horticulture' and confirmed the distinction made by the Administrative Appeals Tribunal (AAT) between the commercial production of potting mix for sale and the production of potting mix by a grower for his or her own purposes, which may be regarded as horticulture.
Later, in Elf Farm Supplies Pty Ltd v. CEO of Customs the AAT [1998] AATA 929 ( Elf's Case ) applied the distinction made in Australian Native Landscapes' Case , to determine that the commercial production of mushroom substrate for sale to mushroom growers to be used in the cultivation of edible fungi was not 'horticulture'.
In this case the mushroom substrate is produced for sale and is analogous to the commercial production of potting mix in Australian Native Landscapes' Case and the commercial production of mushroom substrate in Elf 's Case.
Accordingly the production of mushroom substrate for sale is not 'horticulture'.