Issue
Is off-road diesel fuel being used in 'fishing operations' as defined in subsection 34(1) of the Energy Grants (Credits) Scheme Act 2003 (EGCSA) when it is used to power a barge or other non-propelled vessel that services a fishing fleet?
Decision
Yes. Off-road diesel fuel is being used in 'fishing operations' as defined in subsection 34(1) of the EGCSA, when it is used to power a barge or other non-propelled vessel that services a fishing fleet.
Facts
The client operates a fuel bunker barge that is registered as a dumb barge. The barge is non-propelled and is anchored offshore. It provides services to an Australian fishing fleet.
Off-road diesel 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 when the refrigeration equipment on board vessels breaks down.
Reasons for Decision
The term 'fishing operations' is defined in section 34 of the EGCSA. The activities described under the definition of 'fishing operations' include the operation of a dedicated mother vessel in connection with activities such as the taking, catching or capturing of fish or the processing of fish on board vessels.
The terms 'dedicated mother vessel', 'mother vessel' and 'mother ship' are used interchangeably within the fishing industry. The Macquarie Dictionary 2001, rev. 3rd edn, The Macquarie Library Pty Ltd, NSW defines a 'mother ship' as 'the larger ship which services the group of smaller ships with which it sails'.
In Frank Markert Pty Ltd v. Collector of Customs Ltd [1990] AAT 6206 the Administrative Appeals Tribunal (AAT) considered whether a stationary non-propelled vessel can be providing services to a fishing fleet under the Diesel Fuel Rebate Scheme, the precursor to Energy Grants (Credits) Scheme, administered under the Excise Act 1901 and the Customs Act 1901 . The Customs Act contained a definition of 'fishing operations' in subsection 164(7). That definition also included the operation of a dedicated mother vessel in connection with activities such as the taking, catching or capturing of fish or the processing of fish on board vessels.
In that case, the client had barges anchored, on a semi-permanent basis, at fixed sheltered locations to provide fuel to trawler skippers who preferred to remain at sea rather than return to port to off-load their catches and/or to re-fuel. The AAT determined that: 14. In the result, I am satisfied that the fuel used in providing fishing vessels with the facility to stay at sea to fish is sufficiently proximate to the catching of fish to make the fuel used to reach the smaller barges and trawlers eligible for the statutory rebate. 15. The decision is to be set aside and the full rebate (including the amount claimed to power the generators on the three smaller barges) is allowed.
The client's fuel bunker barge is registered as a dumb barge and has no method of propulsion. Although the vessel is stationary, it is consistent with the view of the AAT that 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.
The definition of 'fishing operations' in section 34 of the EGCSA excludes activities that are conducted in whole or in part, otherwise than for the purposes of a business, or for business purposes connected with recreation, sport or tourism. In this case, the fishing fleet (and stationary vessel) are being used in the course of a fishing business and have no connection with recreation, sport or tourism.
Accordingly, diesel fuel is being used in 'fishing operations' as defined in section 34 of the EGCSA when it is used to power a barge or other non-propelled vessel that services a fishing fleet.