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, 20th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 154095
July 10, 2013
Dear [Client]:
Subject: EXCISE INTERPRETATION
Application [of the Air Travellers Security Charge Act] ATSCA to the collection of ATSC
Thank you for your letter of [mm/dd/yyyy], concerning the application of the Air Travellers Security Charge Act (Act) to the collection of the Air Travellers Security Charge (ATSC).
All legislative references are to the Act and the Regulations therein, unless otherwise specified.
Based on your letter and our conversation of [mm/dd/yyyy], we understand the following:
1. [...] (company B) is a charter airline whose primary business is workforce charters for the [...]. Company B also charters work for other airlines (company A) that has [...] customers.
2. Company A has a contract with a customer who needs air service transportation. Company A sub-charters company B to fly company A's customers. Company B is responsible for flights and passenger handling.
3. The air transportation service is acquired in Canada.
4. Company A and B are both designated air carriers.
5. Company B provides the air transportation service.
6. Company A pays company B for this service.
7. No ticket is issued.
Interpretation Requested
You would like to know who is responsible for the collection of the ATSC, company A or company B?
Interpretation Given
Based on the information provided, company A is liable to collect the ATSC.
Analysis
Section 4 of the Act states that:
"If no ticket is issued for all or part of a journey, and it is reasonable to consider that a ticket would ordinarily be issued by a person for the journey or for that part, as the case may be, such a ticket is, except for the purposes of paragraph 11(2)(c), deemed to have been issued by the person."
You mentioned that no ticket is issued; however, you confirmed that company A would be deemed to be the person issuing the ticket.
Section 14 of the Act states the following:
"14. (1) Subject to subsections (2) and (3), every designated air carrier from whom all or part of an air transportation service is acquired by a person who is required by this Act to pay a charge in respect of that service shall, as an agent of Her Majesty, collect the charge not later than the time the charge becomes payable by the person.
Multiple carriers - service acquired in Canada
(2) If an air transportation service acquired in Canada is comprised of transportation of an individual by air by two or more designated air carriers, any charge that is payable in respect of the service shall be collected
* (a) if all of the tickets for the service are issued by a designated air carrier, by that carrier; or
* (b) in any other case, by the designated air carrier operating the aircraft on which the individual first makes a chargeable emplanement.
Issuing carrier deemed to be supplier of service
(3) If a ticket for an air transportation service acquired in Canada is issued to a person by a designated air carrier that does not provide any part of the air transportation service, the air transportation service is deemed to have been acquired by the person from that designated air carrier."
Subsection 14(2) address the situation when the air transportation service is provided by multiple designated air carriers. Since this is not the case, subsection 14(2) does not apply.
Subsection 14(3) address the situation when the air transportation service is provided by a designated air carrier other than the one who is (deemed to be) issuing the ticket. Since company A is deemed to be issuing the tickets and company B is providing the air transportation service, company A is responsible to collect the ATSC as per subsection 14(3) of 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 Air Travellers Security Charge 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) 957-4138.
Yours truly,
Nathalie Robitaille
Excise Taxes and Other Levies Unit
Excise Duties & Taxes Division
Excise and GST/HST Rulings Directorate
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