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, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 151964
April 8, 2013
Dear [Client]:
Subject: EXCISE INTERPRETATION
Detergent Additives Added to Gasoline at Retail Locations
Thank you for your letter of March 14, 2013 concerning the application of the Excise Tax Act to the addition of detergent to fuel.
All legislative references are to the Excise Tax Act and the regulations therein, unless otherwise specified.
We understand that:
• Your client plans to add detergent additives to its fuel.
• Your client will be doing so at its gas stations located at its retail premises in Canada.
• At the time of delivery from the wholesaler to your client, the additive is injected into the gas storage tank prior to the gas being pumped into it.
• This is performed exclusively at your client's retail locations, which are the physical point of sale of the gasoline to the customer.
Interpretation Requested
You would like to know whether the addition of the detergent to the fuel at your client's retail locations will be considered manufacturing for the purposes of the Excise Tax Act.
Interpretation Given
Based on the information provided, the addition of detergent to fuel by your client at their retail locations would not make your client meet the definition of "manufacturer or producer" under the Excise Tax Act, and they would therefore not be liable for excise tax as a manufacturer or producer pursuant to subsection 23(1).
Subsection 23(1) states that "...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...an excise tax in respect of the goods at the applicable rate set out in the applicable section of that Schedule...".
Subsection 9(a) of Schedule I states the applicable rate of excise tax on unleaded gasoline, that being $0.10 per litre.
Subsection 2(1) defines "manufacturer or producer", and within that definition, Paragraph (f) states that it includes "any person who, by himself or through another person acting for him, prepares goods for sale by...blending [or] mixing [them]" but within that paragraph, an exception is contained, that being "...other than a person who so prepares goods in a retail store for sale in that store exclusively and directly to consumers."
In the instant case, your client adds the detergent to gasoline it receives from the wholesaler. While this would normally constitute the preparation of goods for sale by blending or mixing, your client is doing so at gas stations located on its retail premises, this is performed exclusively at your client's retail locations, and said locations are the physical point of sale of the gasoline to the customer. Accordingly, your client would fall within the exception contained in Paragraph (f) of the definition of "manufacturer or producer" contained in Subsection 2(1), and they would not be liable for excise tax as a "manufacturer or producer" under the Act.
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 Excise Tax Act, 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) 957-1140.
Yours truly,
Neil Varan
Excise Taxes and Other Levies Unit
Excise Duties and Taxes Division
Excise and GST/HST Rulings Directorate
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