Issue
Is an entity entitled to an on-road credit for operating a vehicle that is not a vehicle for transporting passengers or goods in undertaking roadwork activities under paragraph 42(2)(b) of the Energy Grants (Credits) Scheme Act 2003 (EGCSA)?
Decision
No, an entity is not entitled to an on-road credit for operating a vehicle that is not a vehicle for transporting passengers or goods in undertaking roadwork activities under paragraph 42(2)(b) of the EGCSA.
Facts
The client is contracted to undertake roadwork activities.
The client uses a diesel-powered bulldozer and excavator. These vehicles have a gross vehicle mass (GVM) of greater than 20 tonnes and are registered with the relevant transport authority for use on public roads.
The vehicles are not vehicles for transporting passengers or goods and are transported on a trailer pulled by a prime mover to the site of the roadwork activities.
Once at the site, the vehicles undertake roadwork activities such as: • removal of overburden • ripping and pushing dirt to form the road, and/or • excavating to lower a hill.
Reasons for Decision
Subsection 42(1) of the EGCSA provides that you are entitled to an on-road credit if you purchase diesel fuel for use in a registered vehicle with a GVM of 20 tonnes or more or incidental use in relation to such a vehicle.
However, if the vehicle is not for transporting passengers of goods, paragraph 42(2)(b) of the EGCSA limits an on-road credit to where the vehicle is operating on a road for the purpose of moving it to a 'place' where it is to operate (whether or not on road); or from a 'place' where it has operated (whether or not on a road).
The Explanatory Memorandum to the Energy Grants (Credits) Scheme Bill 2003 says: The stationary use provisions in DAFGS were developed to counter the situation where vehicles over 20 tonnes could arrive at a location, remain on a public road and commence operations unrelated to the movement or transport operations of the vehicle (e.g. stationary construction activities such as in operating a crane) which would otherwise all qualify for the grant. In order to ensure these activities do not qualify for a credit, a requirement has been introduced that vehicles of 20 tonnes or more must be for transporting goods or passengers in order to be eligible for an on-road credit for all of their operations. If a vehicle is not for transporting goods or passengers (e.g. a special purpose vehicles such as mobile cranes), it will only be eligible for the movement to or from the place where it is to be, or has been used.
That is, the Explanatory Memorandum shows a clear intent not to allow an on-road credit for non-transport operations. In this instance, the vehicles are transported on a trailer pulled by a prime mover to and from the place where they are to undertake roadwork activities. Thus the vehicles are not, at any time, engaged in transport operations.
Accordingly, an entity is not entitled to an on-road credit for operating a vehicle that is not a vehicle for transporting passengers or goods in undertaking roadwork activities under paragraph 42(2)(b) of the EGCSA, as the fuel has not been used in moving the vehicle to or from a place where it is to operate. Rather, fuel has been used in roadwork activities.