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.
[Addressee]
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
Case Number: 133413
April 1, 2011
Dear [Client]:
Subject:
Excise Interpretation
Supply of Bulk Refined Fuel Products to [...] [Customer X]
Thank you for your email of February 22, 2011 concerning the application of the Excise Tax Act (ETA) to the operations of [...] [(the Company)]. You have asked the Canada Revenue Agency (CRA) to clarify how the federal excise tax (FET) would apply for sales of bulk refined fuel products to [...] [(Customer X)]. Your email has been forwarded by the [...] Tax Services Office to Headquarters for reply.
Our understanding of the facts are as follows:
1. [Customer X] has issued a request for proposals (RFP) for the supply of bulk refined petroleum. [Customer X] currently holds a FET wholesalers "W" licence.
2. In order to meet the conditions of the RFP, [the Company] proposes to sell the refined fuel product to [...], an intermediary [(the Intermediary)]. [The Intermediary] will then transport and resell the fuel to [Customer X].
3. [The Company] holds a manufacturers "E" licence.
4. [The Intermediary] is not licensed for purposes of the FET.
Subsection 23(1) of the ETA, subject to subsections (6) to (8), imposes excise tax on items listed in Schedule I to the ETA, at the rate specified in the Schedule. Sections 9 and 9.1 of Schedule I to the ETA specify the rates of tax for motive fuel products.
As a licensed manufacturer under the ETA, [the Company] is required to remit, to the CRA, the FET on sales of motive fuel products. Since [the Intermediary] does not hold an excise tax licence, any sale by [the Company] to [the Intermediary] must be made on a FET tax-paid basis.
Subsection 23(6) of the ETA allows a licensed wholesaler to purchase motive fuel products exempt of FET. Since [Customer X] holds a "W" licence, they are entitled to purchase all fuel products exempt of FET by providing an exemption certificate at the time of purchase. Therefore, the reselling of motive fuel products, by [the Intermediary] to [Customer X], should be done exempt of FET.
Subsection 68.2(1) provides for a refund to a person who sells excise tax-paid goods to a licensed wholesaler. As such, [the Intermediary] would be entitled to file for a refund of the FET on the FET exempt sale of motive fuel products made to [Customer X]. [The Intermediary] can apply for a refund of the FET by using CRA form N15 Excise Tax Act - Application for Refund/Rebate.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (613) 954-899.
Yours truly,
Darren Weiner
Softwood Lumber and Other Taxes Unit
Excise Duties and Taxes Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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