ATO ID 2002/627: Income - Photovoltaic Rebate
Date of decision: 28 March 2002
Year of income: Year ending 30 June 2002 Year ending 30 June 2003 Year ending 30 June 2004
Business line: Small Business/Individual Taxpayers

Issue
Is a rebate received under the Commonwealth Photovoltaic Rebate Program, assessable income under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Decision
No. The rebate received under the Commonwealth Photovoltaic Rebate Program is not assessable income under section 6-5 of the ITAA 1997.

Facts
The taxpayer, an individual, installed a Small Grid Interactive Renewable Generator (SGIRG) at their home. A rebate towards the cost of acquiring and installing the system was received by the taxpayer from the Commonwealth Government under the Commonwealth Photovoltaic Rebate Program. The rebate was deducted from the cost of the system by the supplier of the system. The photovoltaic system was installed to help reduce greenhouse emissions and to minimise the taxpayer's domestic electricity bills. The system was installed by the taxpayer for domestic and private reasons; the taxpayer is not in the business of producing electricity and did not enter into the arrangement for the purpose of making a profit.

Reasons for decision
Summary: The issue in this case is whether the rebate received by the taxpayer, on the installation of a SGIRG at the taxpayer's residence, constitutes income. Income, or more specifically assessable income, is divided into two categories: As there are no specific provisions within the income tax legislation regarding payments under the Commonwealth Photovoltaic Rebate Program, it is only necessary to consider if the payment is income according to ordinary concepts. In this instance the taxpayer is not in the business of producing and or selling electricity. As the transaction is clearly a non-commercial or domestic transaction, the rebate is not income according to ordinary concepts. Thus the rebate is not assessable income in the hands of the taxpayer.

Legislative references: Income Tax Assessment Act 1997 section 6-5 section 6-10
Subject references: Income Solar energy equipment Government grants income