Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
XXXXX
XXXXX
XXXXX
XXXXX
Case Number: 108990
Business Number: XXXXX
Attention: XXXXX
November 10, 2009
Dear XXXXX:
Subject:
GST/HST RULING
XXXXX
Thank you for your letter of XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to certain items contained in the charges made in the supply made of fuel to XXXXX customers by your client, XXXXX.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
Statement of Facts
We understand that the following statements of fact apply to XXXXX's situation.
1. XXXXX imports fuel into Canada.
2. XXXXX is an upstream supplier of fuel. It sells fuel to Canadian suppliers who, in turn, sell to consumers.
3. XXXXX is a registered importer for purposes of the XXXXX and the XXXXX.
4. XXXXX includes in its charge to its XXXXX customers an amount for both of these taxes.
5. XXXXX includes in its charge to its XXXXX customers an amount representing the "oil spill recovery fee," which is imposed on XXXXX as a result of the operation of US law.
6. XXXXX includes in its charge to its XXXXX customers an amount representing freight costs. The freight cost at issue relates to the movement of the fuel from the US to a place in XXXXX.
7. XXXXX.
8. XXXXX.
9. XXXXX pays a third party a hauling fee per trip over the border. Amounts representing the hauling fee were included in the consideration for supply.
Ruling Requested
XXXXX, you would like to know if XXXXX is required to include as consideration for purposes of the application of GST/HST the following items:
1. the charge XXXXX makes for the XXXXX and the XXXXX;
2. the payment its XXXXX customers paid to XXXXX representing the US oil spill recovery fee XXXXX was required to pay by operation of US law; and
3. the charge XXXXX makes representing its freight costs for importing the fuel into XXXXX.
Ruling Given
Based on the facts set out above, we rule that all of the charges outlined above constitute consideration for the fuel for purposes of GST/HST.
This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.
Explanation
By virtue of subsection 165(1), every recipient of a taxable supply made in Canada is required to pay GST/HST in respect of the supply at a specific rate on the value of the consideration for the supply, except where the supply is otherwise an exempt supply or a zero-rated supply (i.e., taxed at the rate of 0%).
The term "consideration" is defined in subsection 123(1) to include any amount that is payable for a supply by operation of law. The meaning of consideration for GST/HST purposes is not limited to what is specifically listed as being included within the meaning of that term under subsection 123(1), but is broad enough to include almost any amount paid for a supply.
Section 154 provides for certain exceptions by excluding prescribed taxes, duties, and fees in determining consideration. Pursuant to section 154, the Taxes, Duties and Fees (GST) Regulations lists the prescribed levies. The XXXXX and XXXXX are not excluded from consideration under the Taxes, Duties and Fees (GST) Regulation and they therefore form part of the consideration for the supply of the fuel in question.
XXXXX. For GST/HST purposes, whether a tax is direct or indirect is not relevant in determining the consideration for a supply. The taxes or amounts imposed upon the recipient when XXXXX supplies the gasoline under the aforementioned Acts XXXXX form part of the consideration for the supply and the GST/HST is accordingly calculated on the consideration including those amounts.
The charge representing the US oil spill recovery fee is imposed on XXXXX by the operation of US law. The charge made by XXXXX referring to the US oil spill recovery fee represents a cost of doing business that XXXXX passes on to its customers. As such, it forms part of the consideration on which the GST/HST is to be calculated.
The amount representing the hauling fee is also a business input to XXXXX's business of importing fuel into XXXXX. As such it forms part of the consideration on which the GST/HST is to be calculated.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-957-1175.
Yours truly,
Dwight Kostjuk
Specialty Tax Unit
Financial Institutions & Real Property Division
Excise & GST/HST Rulings Directorate
UNCLASSIFIED
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