Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 20th floor
320 Queen Street
Ottawa, ON K1A 0L5
XXXXX
XXXXX
XXXXX
XXXXX
XXXXX
Case Number: 117777
Attention: XXXXX
December 10, 2009
Dear Sir:
Subject:
EXCISE INTERPRETATION - Fuel Exported from Canada
Thank you for your letter of XXXXX concerning the application of the Excise Tax Act (ETA).
All legislative references are to the ETA and the regulations therein, unless otherwise specified.
We understand that:
1. XXXXX is a Canadian company that is not resident in Quebec.
2. XXXXX rents tanks from XXXXX and from XXXXX in order to store and mix B99.9 and B100 (referred to herein collectively as bio-diesel).
3. XXXXX purchases, sells, stores, imports, exports and manufactures bio-diesel by blending different types of bio-diesel fuel together.
4. XXXXX has a manufacturer license under the ETA.
5. XXXXX expects to make ongoing sales in the future to a sister company, XXXXX.
6. XXXXX is a U.S. company that does not have an establishment in Canada.
7. The fuel XXXXX will sell to XXXXX will be purchased by XXXXX from various suppliers in Canada or the United States and transported to XXXXX for blending and temporary storage until sold for export.
8. The fuel being sold by XXXXX to XXXXX will originate in XXXXX and end up in the United States or in Europe.
9. For those sales to the United States, XXXXX will export it from Canada and XXXXX will import it into the United States.
10. There are two possible scenarios with respect to the transfer of ownership and delivery terms in the contract between XXXXX and XXXXX.
(a) Scenario 1:
- title will pass in XXXXX;
- XXXXX shall hire the carrier and pay the related costs;
- XXXXX shall take out insurance to protect the purchaser XXXXX against loss or damage of the property while it is being transported; and
- XXXXX shall handle customs clearance into the U.S. and act as importer in fact and importer of record.
(b) Scenario 2:
- XXXXX shall hire the carrier and pay the related costs;
- XXXXX shall take out insurance to protect the purchaser against loss or damage of the property while it is being transported;
- Ownership will transfer when the rail car actually crosses the Canada/United States border, which means the transfer of ownership will not occur in Canada or the United States but at the border.
- While the rail car is traveling in Canada, ownership of the product will belong to XXXXX
- In the United States, ownership of the product will belong to XXXXX
The following clause will be included in the contract:
XXXXX.
Interpretation Requested
You would like to know whether Canada Revenue Agency will consider that the fuel has been exported from Canada to the United States under the two scenarios presented and that the tax imposed under the ETA will not be payable by XXXXX.
Interpretation Given
Based on the information provided, excise tax will not be payable by XXXXX on the fuel exported from Canada to the United States under either scenario provided that satisfactory evidence of exportation is maintained by them.
Explanation
Section 66 of the ETA states that:
"the tax imposed under this Act is not payable if evidence satisfactory to the Minister is produced to establish
(a) that the goods in respect of which it is imposed have been exported from Canada by the manufacturer, producer or licensed wholesaler by whom the tax would otherwise be payable in accordance with any regulations made under this Act that are applicable to the goods; ..."
The exporter must maintain documentary evidence to prove that the goods were exported from Canada.
Evidence of exportation may include but is not limited to:
• a copy of the invoice showing the sale of the goods to a foreign purchaser;
• a copy of the transportation document (i.e. waybill, pro-bill, airbill, consist sheet, bill of lading or sea waybill) showing direct and unbroken transit to the foreign purchaser;
• the export entry validated by an authorized officer of the Canada Border Services Agency (Form E15);
• the import documentation required when the goods are exported to the U.S.(Form 7501)
• any other evidence of delivery satisfactory to the Agency.
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, its 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) 954-4132.
Yours truly,
Joan Thompson
Rulings Officer
Excise Taxes and Other Levies
Excise & GST/HST Rulings Directorate
UNCLASSIFIED
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