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.
[Corporation Name]
[Corporation Address]
Excise Tax and Fuel Charge Division
Place de Ville, Tower A, 11th floor
320 Queen Street
Ottawa, ON K1A 0L5
Attention: [Client]
Case Number: 9000367
May 12, 2025
Dear [Client]:
Subject: Interpretation under the Excise Tax Act for Marine Gasoil
Thank you for your letter dated [mm-dd-yy] concerning the application of the Excise Tax Act (the Act) to Marine Gasoil.
All legislative references are to the Act.
STATEMENT OF FACTS
We understand the following:
1. [Corporation Name] is a licensed wholesaler under the Act.
2. [Corporation Name] purchases Marine Gasoil fuel (Marine Gasoil) and subsequently sells for use in ships/vessels. Marine Gasoil will be used for use as ships’ stores for travel within Canada and to foreign destinations outside Canada.
Interpretation Requested
[Corporation Name] would like to know:
1. If Marine Gasoil is a product that is subject to excise tax?
2. Does [Corporation Name] have to charge and collect federal excise tax (excise tax) on Marine Gasoil, sold for use as ships’ stores in ships/vessels that will travel within and outside Canada?
Interpretation Given
Marine Gasoil meets the definition of diesel fuel under the Act and is subject to excise tax.
[Corporation Name] has to charge and collect excise tax on Marine Gasoil sold for use as ships’ stores in ships/vessels that will travel within and outside Canada.
EXPLANATION
Under subsection 2(1) of the Act, the definition of diesel fuel includes any fuel oil that is suitable for use in internal combustion engines of the compression-ignition type, other than any such fuel oil that is intended for use and is actually used as heating oil.
Under subsection 23(1) of the Act, subject to subsections (6) to (8), imposes excise tax on goods listed in Schedule I of the Act that are manufactured in Canada and are delivered to a purchaser of those goods. Diesel fuel is a good found in Schedule I of the Act.
Under subsection 23(2) of the Act, where goods are imported, the excise tax imposed by subsection (1) shall be paid in accordance with the provisions of the Customs Act by the importer, owner or other person liable to pay duties under that Act, and where goods are manufactured or produced and sold in Canada, the excise tax shall be payable by the manufacturer or producer at the time of delivery of the goods to the purchaser thereof.
Marine Gasoil is suitable for use in an internal combustion engine of the compression-ignition type and is subject to excise tax.
In the case at hand, Marine Gasoil is sold as diesel fuel for use as ships’ stores. Fuel sold for use as ships’ stores is always subject to excise tax. There is no provision in the Act that allows a licensed wholesaler such as [Corporation Name] , to sell fuel for use as ships’ stores exempt of excise tax. [Corporation Name] must report the sale on it’s B200 Excise Tax Return and pay excise tax.
Refunding Provisions
There are two refunding provisions in the Act for ships ‘stores, however only one refund can be claimed.
Section 68.17 of the Act provides that “…If tax under Part III has been paid in respect of any goods and a manufacturer, producer, wholesaler, jobber or other dealer has sold the goods for use as ships' stores, an amount equal to the amount of that tax shall, subject to this Part, be paid to that dealer if that dealer applies for it within two years after that sale of the goods.”
Where the purchaser/end-user certifies that the fuel will be used as ships' stores, the licensee who paid the excise tax may apply for a refund of that tax under section 68.17 of the Act. The refund would essentially reduce the cost of the fuel to the licensee, by an amount equal to the refunded excise tax. This would allow the licensee to pass these savings on to the purchaser/end-user by way of a reduced sales price. The purchaser/end-user would therefore effectively have acquired the fuel free from excise tax.
Subsection 68.01(2) of the Act states: “if tax under this Act has been paid in respect of fuel and no application is made in respect of the fuel by any person under section 68.17 or 70, the Minister may pay an amount equal to the amount of that tax to a purchaser who applies for the payment and who uses the fuel as ships’ stores.” This provision permits a refund to the end-user that acquires the fuel, provided that they retain documentation to qualify for the ships’ stores and no application is made in respect of the fuel by any person under section 68.17 or 70.
Documentation supporting the refund application must be reliable and verifiable. It must indicate the date of the transaction, the excise tax paid and a description and the quantity of the fuel delivered onboard the listed conveyance. To support the fact that the fuel used on board the conveyance qualifies for ships’ stores, the documentation must also identify the listed conveyance, the departure location of the conveyance and the destination
A refund application can be made using Form N15 Excise Tax Application for Refund.
For more information on ships’ store refer to ETSL78 Information for Vendors, Purchasers and End-Users Regarding the Application of the Excise Tax on Fuel for Use as Ships’ Stores.
Should you have any questions or require clarification, please call me at 438-451-1430.
For account-related enquires, please call the Prince Edward Island Tax Centre at 1-877-432-5472.
Sincerely,
Martha Persaud
Martha Persaud, CPA
Senior Rulings Officer
Excise Taxes and Other Levies Unit
Excise Tax and Fuel Charge Division
Legislative Policy and Regulatory Affairs Branch
Email this Content