Issue
Is an applicant entitled to a diesel fuel rebate under the residential premises category in paragraph 78A(1)(b) of the Excise Act 1901 for diesel fuel purchased for use in generating electricity for powered sites and an ablution block in a caravan park attached to a roadhouse?
Decision
Yes. An applicant is entitled to a diesel fuel rebate under the residential premises category in paragraph 78A(1)(b) of the Excise Act for diesel fuel purchased for use in generating electricity for powered sites and an ablution block in a caravan park attached to a roadhouse.
Facts
The applicant operates a roadhouse with an attached caravan park consisting only of powered sites.
The applicant purchased diesel fuel to generate electricity for the powered sites and ablution block at their caravan park.
There are no on-site vans in the caravan park - occupants provide their own caravans.
All electricity generated for the caravan park is supplied from the roadhouse generator.
The electricity generated provides heating of water for an ablution block, and power for lighting, air-conditioning and other electrical appliances in the caravans.
Reasons for Decision
Subsection 78A(1) of the Excise Act, provides that a diesel fuel rebate is payable (subject to various conditions) to a person who purchases diesel fuel for use by him or her in various activities.
Paragraph 78A(1)(b) of the Excise Act states that one eligible use of diesel fuel is to generate electricity at residential premises for use in: (i) providing food and drink for (ii) providing lighting, heating, air-conditioning, hot water or similar amenities for; or (iii) meeting other domestic requirements of
residents of the premises.
Section 78 of the Excise Act uses the definition of the term 'residential premises' that appears in subsection 164(7) of the Customs Act 1901. Subsection 164(7) of the Customs Act defines 'residential premises' as being premises used as a house, or other premises at which at least one person resides. However, subsection 164(7) of the Customs Act contains various specific exclusions from the meaning of residential premises. One such exclusion is premises used in the business of a hotel, motel or boarding house or a similar business.
Therefore, the applicant will be entitled to a diesel fuel rebate provided the premises constitute 'residential premises' for the purposes of subsection 164(7) of the Customs Act, and are not used in the business of a hotel, motel or boarding house or a similar business. A further requirement (from subsection 78A(1) of the Excise Act) is that the diesel fuel must be used to generate electricity 'at' the residential premises. Finally, it must be established that the electricity is used to provide amenities to the 'residents' of the premises.
Each of these points will be examined in turn.
1. Does the caravan park constitute 'residential premises'?
The term 'residential premises', with reference to caravans and caravan parks, was discussed in depth by the Administrative Appeals Tribunal (AAT) in Re: Adelaide Caravan Park Pty Ltd and Dept of Primary Industry Technology and Commerce (1985) 7 ALD 756 ( Adelaide Caravan Park Case ). In that case it was determined that, prima facie, individual caravans or a caravan park may comprise 'residential premises'.
The powered sites at the applicant's caravan park may be described as 'premises used as a house, or other premises at which at least one person resides', and are therefore 'residential premises'.
2. Is the caravan park specifically excluded from the definition of residential premises?
In the Adelaide Caravan Park Case , the AAT determined that the business of running a caravan park that consists solely of powered sites with amenities, is not similar to the business of a hotel, motel or boarding house, as the caravan park is not providing the accommodation, nor the meal-making facilities. This decision was affirmed in the AAT by the majority in ES & G Asplin and Department of Industry, Technology and Commerce (1986) 9 ALN N246.
The applicant is not providing caravans, merely powered sites and amenities. Therefore the applicant is not providing accommodation or meal-making facilities. The powered sites cannot be described as premises used in the business of a hotel, motel or boarding house or a similar business; therefore they are not excluded from the definition of 'residential premises' in subsection 164(7) of the Customs Act.
3. Is the diesel fuel used to generate electricity 'at the residential premises'?
The term 'at residential premises' was discussed by the Full Court of the Federal Court in Collector of Customs Tasmania v. Flinders Island Community Association (1985) 7 FCR 205. In that case it was stated that the term should be taken to require a close connection between the generation of electricity and the residential premises, and that what is a sufficiently close connection must depend upon the circumstances of each case.
The applicant operates a roadhouse with attached caravan park. All electricity generated for the caravan park is supplied from the roadhouse generator. It is considered that the proximity between the generation of electricity and the residential premises is sufficiently close to satisfy the test that the diesel fuel is used 'at residential premises'.
4. Is the electricity used to provide amenities to the 'residents' of the premises?
In the Adelaide Caravan Park Case it was determined that an overnight stay would be sufficient for users of sites at a caravan park to qualify as 'residents'. It was also determined that if premises fit within the definition of 'residential premises', then persons who use the premises as a place to eat, drink and sleep qualify as 'residents'.
The applicant has powered sites that are available for use by persons who provide their own caravans. The caravans are 'residential premises', therefore the persons who use the caravans and associated amenities for which the diesel fuel is used, are 'residents' of the premises.
Conclusion
The powered sites at the applicant's caravan park meet the definition of 'residential premises'. The diesel fuel is purchased for use in generating electricity at these residential premises, and the electricity will be used to provide amenities to residents of these premises.
The applicant is therefore entitled to a rebate for diesel fuel purchased for use in generating electricity for powered sites and an ablution block in a caravan park attached to a roadhouse.
Note: for the purposes of this ATO ID, it is assumed the applicant meets all of the general requirements that must be satisfied in order to claim a diesel fuel rebate. This ATO ID focuses purely on whether the applicant's intended use of diesel fuel is eligible for a diesel fuel rebate.