Diesel fuel rebate scheme: fishing operations - processing fish

Are the operations of a mother vessel in processing fish and travelling to and from port and the place it processes fish 'fishing operations' as defined in subsection 164(7) of the Customs Act 1901 for the purposes of the diesel fuel rebate scheme?

Yes. The operations of a mother vessel in processing fish and travelling to and from port and the place it processes fish are 'fishing operations' as defined in subsection 164(7) of the Customs Act for the purposes of the diesel fuel rebate scheme.

A company owns a mother vessel which is used in the course of its fish processing business. The mother vessel works in Australian waters and processes the fish on board. The fish are caught and subsequently fattened in tanks by Australian fish operators, who then sell the fish to the company and transfer the fish to the mother vessel.

The processing involves the cutting up, dismembering, cleaning and packing of the fish.

Following processing, the company sells the fish to both overseas and Australian vessels. The fish are transferred directly from the mother vessel to the purchasers' vessels.

The mother vessel remains at sea except when it needs to refuel in port.

For the purposes of the diesel fuel rebate scheme, a person is, subject to certain conditions, entitled to a diesel fuel rebate under subsection 164(1) of the Customs Act or 78A(1) of the Excise Act 1901 where they purchase diesel fuel for use in certain defined activities, including 'fishing operations'.

'Fishing operations' is defined for the purposes of both Acts in subsection 164(7) of the Customs Act as: ... (c) the processing of fish on board vessels ... (e) the operation of a dedicated mother vessel in connection with the activities referred to in paragraphs (a), (b), (c) or (d); or ... but does not include any activity referred to in paragraph (a), (b), (c), (d), (e) or (f) that is conducted, in whole or in part: (g) otherwise than for the purposes of a business; or (h) for business purposes connected with recreation, sport or tourism

'Processing' is defined in subsection 164(7) of the Customs Act as: (a) the cutting up, dismembering, cleaning, sorting or packing of fish ...

The mother vessel is being used to cut up, dismember, clean, and pack the fish on board the vessel. Therefore, the mother vessel's activities constitute processing of the fish and the requirements of paragraph (c) of the definition of fishing operations are satisfied.

The movement of the mother vessel to and from port to enable refuelling to take place will constitute fishing operations provided the requirements of paragraph (e) are satisfied. In considering whether an activity could be regarded as 'in connection with' agriculture or mining, the Courts generally considered whether the activity being examined could properly be described as one in connection with the defined agricultural or mining activity or was best described as an activity in connection with something else (see: Collector of Customs v. Pressure Tankers Pty Ltd and Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280; Collector of Customs for the State of Tasmania v. John Bernard Davis (1989) 23 FCR 378; Collector of Customs v. Cliffs Robe River Iron Associates (1985) 7 FCR 27; Australian National Railways Commission v. Collector of Customs (SA) (1985) 8 FCR 264).

The travel by the mother vessel to and from port to enable refuelling to take place is considered to be an activity 'in connection' with the processing of fish on board vessels. Therefore, the travel is connected with its fish processing activities and the requirements of paragraph (e) of the definition of fishing operations are satisfied.

Accordingly, the processing of the fish on board the mother vessel and the movement of the vessel to and from port to enable refuelling to take place will constitute fishing operations under paragraphs (c) and (e) respectively provided neither of the exclusions in paragraphs (g) and (h) are applicable.

The mother vessel's activities are carried out by the company in the form of a business that is not connected in any way with recreation, sport or tourism. Therefore the exclusions in paragraphs (g) and (h) do not apply. As the mother vessel's activities meet the requirements of paragraphs (c) and (e) and are not excluded by paragraphs (g) and (h), they are 'fishing operations' as defined in subsection 164(7) of the Customs Act for the purposes of the diesel fuel rebate scheme.