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 Duties and Taxes Division
Place de Ville, Tower A, 11th Floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 181882
Dear [Client]:
Subject: EXCISE RULING – [Sale of Diesel Fuel]
Thank you for your letter of [mm/dd/yyyy], concerning the application of the Excise Tax Act to fuel sold at the […] Terminal in […][City 1], […][Province 1].
All legislative references are to the Excise Tax Act (ETA) and the regulations therein, unless otherwise specified.
STATEMENT OF FACTS
We understand the following:
- […][The Company] holds an excise manufacturer’s licence under the ETA.
- [The Company] sold tax-paid diesel fuel to […][ACo].
- Title and risk of the diesel fuel was passed on to [ACo] at [the Company]’s […] Terminal in [City 1], [Province 1].
- The terms of the contract are Free On Board (FOB) [City 1].
- [ACo] sold the diesel fuel to their customer […][BCo], and the transfer of ownership took place in international waters.
- [The Company] is shown on the documents as being the exporter of record.
RULING REQUESTED
You would like to know if the diesel fuel sold to [ACo] constitutes an export sale and if such sale can be tax-exempt under section 66 of the ETA.
RULING GIVEN
Based on the facts set out above, we rule that the sale of diesel fuel from [the Company] to [ACo] took place in Canada and does not constitute an export according to section 66. As a result, the diesel fuel sold to [ACo] must be tax-paid.
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the Canada Revenue Agency (CRA) is bound by the ruling(s) given in this letter provided that: none of the issues discussed in the ruling(s) are currently under audit, objection, or appeal; no future changes to the type in relevant legislation, regulations or the CRA’s interpretative policy affect its validity; and all relevant facts and transactions have been fully and accurately disclosed.
EXPLANATION
The ETA states that:
23 (1) Subject to subsections (6) to (8), whenever goods mentioned in Schedule I are imported or are manufactured or produced in Canada and delivered to a purchaser of those goods, there shall be imposed, levied and collected, in addition to any other duty or tax that may be payable under this or any other law, an excise tax in respect of the goods at the applicable rate set out in the applicable section of that Schedule, computed, if that rate is specified as a percentage, on the duty paid value or the sale price, as the case may be.
66 “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”.
Memorandum D20-1-1 issued by the Canada Border Services Agency defines an “Exporter
in respect of goods that are exported to mean the holder of a business number for the purposes of the Act who exports commercial goods or causes them to be exported. For the purposes of this memorandum, the exporter may be a non-resident, in which case he resides outside Canada, but exports goods from Canada”.
The publication further explains under the section “Who Must Report Goods for Export?”:
Exporters
4. The exporter, including a non-resident exporter, is the entity who exports the goods from Canada. The exporter is not to be construed as the person involved in the transportation arrangements (e.g. carriers or customs service providers).
5. The exporter may delegate the act of completing and/or submitting export declarations or documents to a third party such as a customs service provider, but, ultimately, it is the exporter who remains liable for ensuring that true and accurate information is provided within the prescribed time frames (refer to the “Time Frames” section).
Customs Service Providers
6. Where customs service providers are acting on behalf of an exporter, they will submit the export documentation according to the requirements specified for exporters.
Even though [the Company] is shown on the documents as being the exporter of record, [the Company] did not export or cause the diesel fuel to be exported. [The Company] sold the fuel to [ACo] in Canada and title and risk of the diesel fuel was passed on to [ACo] at [the Company]’s […] Terminal in [City 1], [Province 1].
Consequently, paragraph 66(a) of the ETA does not apply to this transaction since [the Company] did not export the diesel fuel or cause it to be exported, and the sale actually took place in Canada.
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
Excise Duties and Taxes Division
Excise and GST/HST Rulings Directorate
Email this Content