Issue
Do firebreak maintenance and wildfire control activities carried out on behalf of a government authority constitute 'agriculture' as defined in subsection 164(7) of the Customs Act 1901 for the purposes of the diesel fuel rebate scheme (off-road scheme)?
Decision
No. Firebreak maintenance and wildfire control activities carried out on behalf of a government authority are not 'agriculture' as defined in subsection 164(7) of the Customs Act for the purposes of the off-road scheme.
Facts
The taxpayer is contracted by a government authority to undertake regular fire break maintenance and wildfire control activities.
The wildfire control activities involve constructing control lines in the direct path of wildfires, establishment of control lines away from the fire edge, and the movement of fire fighting machinery.
Neither the entity undertaking the firebreak maintenance and wildfire control activities nor the government authority are carrying out the activities of the cultivation of the soil, the cultivation or gathering in of crops, the rearing of live-stock or viticulture, horticulture, pasturage or apiculture.
The work is carried out off-road in National Parks.
Reasons for Decision
Subsection 164(1) of the Customs Act and subsection 78A(1) of the Excise Act 1901 provide that a rebate is payable to a person who purchases diesel fuel for use in specified off-road activities, including 'primary production' (otherwise than for the purpose of propelling a road vehicle on a public road). The term 'primary production' is in turn defined in subsection 164(7) as meaning a number of activities including 'agriculture.'
The term agriculture is defined for the purposes of both the Customs Act and the Excise Act in subsection 164(7) of the Customs Act to mean, subject to certain limitations, the following four activities, plus a range of specific activities: • the cultivation of the soil; or • the cultivation or gathering in of crops; or • the rearing of live-stock; or • viticulture, horticulture, pasturage or apiculture.
The most pertinent specific activities included within the definition of agriculture are contained in paragraphs (la) and (n) of the definition of agriculture in subsection 164(7) of the Customs Act.
Paragraph 164(7)(la) of the Customs Act includes within the meaning of agriculture, the carrying out of firefighting activities: (i) by a person who carries on a core agricultural activity; or (ii) by a person contracted by that person to carry out the first-mentioned activity.
Paragraph 164(7)(n) of the Customs Act includes within the meaning of agriculture, the construction or maintenance of firebreaks undertaken: (i) by a person who carries on a core agricultural activity; or (ii) by a person contracted by that person to carry out the construction or maintenance.
To qualify as agriculture under either of the above paragraphs, the activities must be carried out by a person who carries on a core agricultural activity, or by a person contracted by that person.
For the purposes of the off-road scheme, a core agricultural activity is defined in subsection 164(7) of the Customs Act and is essentially any of the four primary activities dot pointed above when undertaken for the purposes of, or for purposes that will directly benefit, a business undertaken to obtain produce for sale.
The entity undertaking the firebreak maintenance and wildfire control activities is not carrying on a core agricultural activity. Nor is the government authority that has contracted the entity to undertake the activities. Therefore, the activities do not qualify as agriculture under paragraphs 164(7)(la) or 164(7)(n) of the Customs Act.
Accordingly, firebreak maintenance and wildfire control activities carried out in a National Park on behalf of a government authority are not 'agriculture' as defined in the Customs Act for the purposes of the diesel fuel rebate scheme.