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, 11th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 188887
Dear [Client]:
Subject: EXCISE INTERPRETATION
Fuel Used to Heat Petroleum Storage Tanks
Thank you for your fax of July 21, 2016, concerning the application of the Excise Tax Act to fuel used to heat petroleum storage tanks.
All legislative references are to the Excise Tax Act and the regulations therein, unless otherwise specified.
We understand that you would like to sell fuel to a client that will use the fuel to heat a petroleum storage tank prior to applying a coating to protect the metal of the tank. It is your belief that the fuel should be classified as fuel used to heat a space as such you would like to supply the fuel to this client without charging the federal excise tax.
INTERPRETATION REQUESTED
You would like to know whether you can supply fuel to your client without charging the federal excise tax for heating a space of a petroleum storage tank.
INTERPRETATION GIVEN
Subsection 2(1) of the Act provides the following definitions:
“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.”
“heating oil means any fuel oil that is consumed exclusively for providing heat to a home, building or similar structure and that is not consumed for generating heat in an industrial process, including any commercial process that involves removing moisture from a good.”
In other words, unless the fuel is actually used exclusively to heat a home, building or similar structure, it is deemed to be diesel and is subject to excise tax.
Based on the information provided, the fuel supplied to this client to heat a petroleum storage tank prior to applying a coating to protect the metal of the tank is not considered to be heating oil as it is not fuel used exclusively to heat a home, building or similar structure. As such, fuel sold to your client should be diesel fuel as it is already subject to excise tax. Heating oil should not be sold for use for this purpose.
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the interpretation(s) given in this letter, including any additional information, is not a ruling and does not bind the Canada Revenue Agency (CRA) with respect to a particular situation. Future changes to the Act, regulations, or the CRA’s interpretative policy could affect the interpretation(s) or the additional information provided herein.
If you require clarification with respect to any of the issues discussed in this letter, please call Sharon Kendall, Officer, directly at 613-670-7206.
Yours truly,
Dennis Dekleva
Manager
Excise Taxes and Other Levies Unit
Excise Duties & Taxes Division
Excise and GST/HST Rulings Directorate
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