Issue
Is the use of a forklift to unload empty modules from a vehicle, move the modules into a shed where they are loaded with livestock, move the full modules back to the vehicle and load the modules onto the vehicle the 'rearing of livestock' for the purposes of paragraph 22(1)(c) of the Energy Grants (Credits) Scheme Act 2003?
Decision
No. The use of a forklift to unload empty modules from a vehicle, move the modules into a shed where they are loaded with livestock, move the full modules back to the vehicle and load the modules onto the vehicle is not the 'rearing of livestock' for the purposes of paragraph 22(1)(c) of the EGCSA.
Facts
An entity operates a transport business.
The entity collects chickens from agricultural properties. Diesel powered forklifts are used to unload empty containers from the prime mover and take the containers to a shed where the chickens are manually placed in the containers.
When the containers are full, forklifts take them out of the shed and load them onto the prime mover.
Once loaded onto the prime mover, the chickens are transported to a plant where they are slaughtered and processed.
The chickens being loaded are 'livestock' for the purposes of section 22 of the EGCSA.
Reasons for Decision
Section 53 of the EGCSA provides that, subject to the conditions and restrictions specified in the regulations, an entity is entitled to an off-road credit if they purchase or import into Australia off-road diesel fuel for a use by them that qualifies, including 'primary production'.
The definition of 'primary production' in section 21 of the EGCSA includes 'agriculture'. 'Agriculture' is defined in section 22 of the EGCSA as meaning, subject to certain conditions, a number of activities, including at paragraph 22(1)(c) 'the rearing of livestock'.
'Rearing of livestock' is not defined in the EGCSA and therefore takes on its common meaning. 'Rear' is defined in the Macquarie Dictionary 2001 rev. 3rd edn, The Macquarie Library Pty Ltd, NSW as 'to care for and support up to maturity: to rear a child'.
Consequently, the 'rearing of livestock' includes all activities required to breed, raise and care for the animals for the specific purpose for which they are being reared, in accordance with accepted commercial animal husbandry and management practices.
The diesel fuel rebate scheme was the precursor to the Energy Grants (Credits) Scheme, and was administered under the Customs Act 1901 and the Excise Act 1901. The Customs Act allowed a diesel fuel rebate to be paid for the rearing of livestock, and the decisions in the following cases remain relevant.
In Australian National Railways v. Collector of Customs, South Australia (1985) 8 FCR 264 (the Railways Case), Impast Pty Ltd v. Collector of Customs No. W91/290 AAT No. 8355; and Re: French Island Barge Pty Ltd v. Collector of Customs No.V92/255 AAT No 8625, the Federal Court and Administrative Appeals Tribunal concluded that: (a) the rearing of livestock ends when the purpose for which the animals are reared is complete, and (b) the transport of livestock to an abattoir, a slaughtering point, or to a port for export occurs after the rearing of livestock is over, and does not form part of the 'rearing of livestock'.
Notably, in the Railways Case, Davies, J said that: the transportation of livestock by contractors which takes place in the course of rearing livestock, as distinct from transportation which takes place for the purpose of sale or other disposal, is an operation of primary production as defined...
In this case, the activities of unloading the empty containers from the prime mover, transferring the containers to a shed where they are loaded with chickens, the transfer of the full containers back to the prime mover and their loading on the prime mover so they can be sent for slaughter and processing are all activities which take place after the rearing of the chickens is complete, and are undertaken as part of the transport of the chickens for slaughter and processing.
In line with the above cases, the transport of livestock to a place of slaughter and processing does not form part of the rearing of the livestock.
Accordingly, the use of a forklift to unload empty modules from a vehicle, move the modules into a shed where they are loaded with livestock, move the full modules back to the vehicle and load the modules onto the vehicle is not the 'rearing of livestock' for the purposes of paragraph 22(1)(c) of the EGCSA.