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: 200925
Dear [Client]:
Subject: EXCISE RULING
[federal excise tax on an automobile air conditioner]
Thank you for your letter of May 9, 2019 requesting a ruling toward a refund of federal excise tax charged on an automobile air conditioner.
All legislative references are to the Excise Tax Act (ETA) and the regulations therein, unless otherwise specified.
RULING REQUESTED
You would like to receive a ruling from the Canada Revenue Agency (CRA) as requested by the Canadian Border Services Agency (CBSA) to support a refund application for a $100 federal excise tax levied on an air conditioner unit entering Canada in a salvaged automobile registered in Canada (CAN) though purchased by you in the United States (USA).
1. You purchased a […][vehicle] which was registered in New Brunswick (NB), CAN with the condition listed as salvage, from […][Company A] sold through […](USA).
2. The vehicle was involved in an accident in the USA and written off by […][Company B].
3. You provided a NB Motor Vehicle Branch vehicle ownership certificate showing the vehicles’ physical status as salvage.
4. You provided a CARFAX which indicated the vehicle when new had been registered in Nova Scotia (NS) CAN and in all subsequent years in NB CAN.
5. You provided a […] Brokerage receipt which indicated a federal excise tax of $100 had been paid.
6. You have stated the vehicle is intended to be returned to road worthiness and not sold as parts.
RULING PROVIDED
We rule that as the vehicle was being returned to CAN and not being imported. The federal excise tax of $100 levied on the automobile air conditioner under ss 23(1), ss 23(2) and paragraph 7 of Schedule I was levied in error and eligible for refund.
EXPLANATION
The […][vehicle] was purchased in NS CAN at which time the federal excise tax of $100 on air conditioner was payable by the vehicle manufacturer. The history of the vehicle displayed on the CARFAX document indicates it was never exported into the USA and remained registered in CAN. The vehicle although physically outside of CAN when damaged and sold, was simply being returned to CAN.
APPLICABLE LEGISLATION
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.
23 (2) 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.
68 (1) If a person, otherwise than pursuant to an assessment, has paid any moneys in error in respect of any goods, whether by reason of mistake of fact or law or otherwise, and the moneys have been taken into account as taxes, penalties, interest or other sums under this Act, an amount equal to the amount of the moneys shall, subject to this Part, be paid to the person if the person applies for the payment of the amount within two years after the payment of the moneys.
Schedule 1, Section 7,
Air conditioners designed for use in automobiles, station wagons, vans or trucks whether
(a) separate, or
(b) included as permanently installed equipment in an automobile, station wagon, van or truck at the time of sale or importation of the vehicle by the manufacturer or importer thereof, as the case may be, one hundred dollars
and, for purposes of this section and section 8, an evaporator unit designed for use with or as part of an automotive type air conditioning system shall be deemed to be an air conditioner described in this section except where the evaporator unit is used for repair or replacement purposes.
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.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (613) 670-7208.
Yours sincerely,
Michael Ryder
Excise Duties and Taxes Division
Excise and GST/HST Rulings Directorate
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