Issue
Does an entity which carries on a media production and broadcasting enterprise have the retail sale of goods or services or the provision of hospitality as its principal purpose at the place where the mobile broadcast vans are used, as required by subparagraph 53(4)(a)(i) of the Energy Grants (Credits) Scheme Act 2003 (EGCSA)?
Decision
No. An entity which carries on a media production and broadcasting enterprise does not have the retail sale of goods or services or the provision of hospitality as its principal purpose at the place where the mobile broadcast vans are used, as required by subparagraph 53(4)(a)(i) of the EGCSA.
Facts
An entity runs an enterprise involved in media production, broadcasting and sundry other activities.
As part of that enterprise, the entity uses mobile media broadcast vans. From these vans the entity carries out media production and/or media broadcast activities.
In some places the vans do not have ready access to a commercial supply of electricity. In these instances, a mobile diesel powered generator is used to generate electricity for air conditioning and lighting for the vans.
Reasons for Decision
Subsection 53(1) of the EGCSA states that a person is entitled to an off-road credit if they purchase diesel fuel for a use by them that qualifies.
Paragraph 53(4)(a) of the EGCSA provides that the following is a use that qualifies: use at particular premises to generate electricity for use in the course of carrying on, at those premises, an enterprise that: (i) has, as its principal purpose, the retail sale of goods or services (other than electricity) or the provision of hospitality; and (ii) and does not have, at those premises, ready access to a commercial supply of electricity;...
In this instance what must be considered is whether the electricity is for use in the course of carrying on, at those premises, an enterprise that has as its principal purpose the retail sale of goods or services or the provision of hospitality.
Accordingly, although the entity may carry on a range of activities as part of its media enterprise, we need to consider the nature of the activities carried on at the place where the diesel fuel is used to generate electricity, that is, the place where the media broadcast vans are placed, and determine if the principal purpose of those activities is the retail sale of goods or services or the provision of hospitality.
In the Macquarie Dictionary, 2001, rev. 3rd edn, The Macquarie Library Pty Ltd, NSW,
'Retail' is defined as: 1. the sale of commodities to household or ultimate consumers, usually in small quantities (opposed to wholesale )...
'Hospitality' is defined as: the reception and entertainment of guests or strangers with liberality or kindness.
At the place where the broadcast vans are positioned, the entity is engaged in the activities of media production and or media broadcasting. These activities clearly do not involve the retail sale of either goods or services. Neither do they constitute hospitality as defined above.
Therefore, the entity cannot be considered to be carrying on, at the place where the electricity is generated, an enterprise that has as its principal purpose the retail sale of goods or services or the provision of hospitality for the purposes of subparagraph 53(4)(a)(i) of the EGCSA.