Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 20th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number 146849
November 23, 2012
Dear [Client]:
Subject: EXCISE INTERPRETATION
Ships’ Stores
Thank you for your letter of [mm/dd/yyyy] concerning the application of the excise tax to ships’stores.
All legislative references are to the Excise Tax Act and the regulations therein, unless otherwise specified.
We understand that a foreign vessel enters Canadian waters, fuels and then leaves Canadian waters.
A K36A is obtained and approved by Customs.
INTERPRETATION REQUESTED
You would like to know if the fuel qualifies as ships’ stores and whether the purchaser of the fuel is eligible for a refund of excise tax paid on the fuel.
INTERPRETATION GIVEN
Based on the information provided, we have the following comments.
The Ships’ Stores Regulations, which can be found at the following website http://laws.justice.gc.ca/eng/regulations/SOR-96-40/index.html, list the class of conveyances and goods that qualify as ships’stores.
A form K36A Ships’ Stores Declaration and Clearance Certificate that has been duly authorized by the Canada Border Services Agency (CBSA) is an indication to the CRA that the goods qualify as ships’stores.
Two scenarios may occur. First, if the end-user (or vessel) acquires the fuel tax paid and obtains an authorized K36A from the CBSA, subsection 68.01(2) of the Excise Tax Act (ETA) allows for a refund of the tax paid by the end-user on the fuel used as ships’ stores if a refund claim is submitted within two years after the purchase. A Refund application can be made using form N15, Excise Tax Act Application for refund/rebate, which can be found at the following website, http://www.cra-arc.gc.ca/E/pbg/ef/n15/README.html.
Secondly, if it is known at the time of purchase that the fuel will be used as ships’ stores and the purchaser has obtained a form K36A duly authorized by the CBSA, section 68.17 of the ETA allows the supplier (manufacturer, producer, wholesaler, jobber or other dealer) to sell the fuel tax-exempt and claim the refund themselves. They, in turn, must be able to substantiate the exemption of the tax with supporting document such as a copy of the K36A authorized by the CBSA.
When a K36A form cannot be obtained, the CRA will accept other alternate documentation, such as an official log book, showing that the vessel proceeded outside Canada.
The foregoing comments represent our general views with respect to the subject matter of your request. These comments are not rulings and, in accordance with the guidelines set out in GST/HST Memorandum 1.4, Goods and Services Tax Rulings, do not bind the Canada Revenue Agency with respect to a particular situation. Future changes to the ETA, regulations, or our interpretative policy could affect this interpretation.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-957-4138.
Yours truly,
Nathalie Robitaille
Excise Taxes and Other Levies Unit
Excise Duties and Taxes Division
Excise and GST/HST Rulings Directorate
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