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: 153890
June 25, 2013
Dear [Client]:
Subject: EXCISE INTERPRETATION
Excise Tax on Gasoline - Spillage Loss
Thank you for your letter of [mm/dd/yyyy] concerning the application of the Excise Tax Act to the spillage loss of gasoline.
All legislative references are to the Excise Tax Act and the regulations therein, unless otherwise specified.
We understand the following:
• A licensed wholesaler sells gasoline to a gas station at the retail level.
• The fuel is delivered from the wholesaler to the retailer via tanker truck.
• Upon transfer of the fuel into the tanker truck at the terminal of the wholesaler, the invoice to the customer is generated.
• Federal excise tax is charged on the sale of the gasoline.
• At the time of delivery, there is a small spillage of gasoline such that the gasoline delivered to the retailer is less than the amount charged on the invoice.
• Now, the wholesaler wishes to issue a credit to the retailer to refund the part of the selling price of the gasoline that was spilled, and concurrently wants to issue a refund of the federal excise tax that was charged on that spilled portion of gasoline.
Interpretation Requested
You would like to know whether the Excise Tax Act allows for a refund of the federal excise tax paid on the spilled portion of gasoline, and if not, whether the CRA would allow for such a refund. Further, if it were allowed, you would like to know how it would be reported, either on a B200 Excise Tax Return or on an N15 Application for Refund/Rebate.
Interpretation Given
Based on the information provided, there is no refund provision available under the Act for the situation described. Accordingly, the CRA would not allow for such a refund.
Subsection 23(1) of the Act - Tax on various articles at schedule rates - stipulates 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...".
Further, Subsection 9(a) of Schedule I of the Act enumerates the rate of excise tax, that being $0.10 per litre.
Finally, Subsection 23(4) - Tax on resale by licensed wholesaler of Schedule I goods - states that "Whenever goods mentioned in Schedule I are sold by a licensed wholesaler...there shall be imposed, levied and collected...an excise tax in respect of those goods at the applicable rate set out in the applicable section of that Schedule, computed...at the time the goods are delivered to the purchaser...".
The amount of federal excise tax due is based on the amount of gasoline purchased by the licensed wholesaler from the manufacturer. Subsequently, the federal excise tax is due at the time of delivery from the licensed wholesaler to the retailer.
Accordingly, the amount of federal excise tax due to the CRA is unaffected by the gasoline spillage. The licensed wholesaler is free to provide whatever amount of credit to the retail customer they see fit, however, there is no federal excise tax component to this transaction.
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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