12 December 2004 GST/HST Ruling 53412 - Invoicing of $100 Automotive Air Conditioner Excise Tax

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.

Dear XXXXX:

Thank you for the letter XXXXX from XXXXX of your XXXXX office with attachments, and for your e-mail XXXXX and your fax XXXXX providing additional information, concerning the application of the Excise Tax to the transaction described below.

Statement of Facts

Our understanding of the facts, the transaction(s), and the purpose of the transaction(s) is as follows:

XXXXX is an Insurance Broker with offices in XXXXX.

XXXXX was directly retained or instructed by XXXXX to arrange a contract of insurance covering Errors and Omissions.

XXXXX arranged the issuance of the insurance policy through XXXXX.

XXXXX completed the incorrect form with XXXXX. The Canadian Assured Tax Form identified the contract as a direct assured business.

XXXXX issued the insurance policy number XXXXX and provided to the Canada Revenue Agency (CRA) with the information required by subsection 5(2) of the Excise Tax Act (ETA).

The CRA invoiced the XXXXX for the Excise Tax of 10% of the premium paid or payable.

Ruling Requested

The premium of $XXXXX for the policy number XXXXX issued to XXXXX is not taxable under Part I of the ETA.

Ruling Given

Based on the facts set out above, we rule that the premium of $XXXXX for the policy number XXXXX issued to XXXXX is not taxable under Part I of the ETA.

This ruling is subject to the general limitations and qualifications outlined in section 1.4 of Chapter 1 of the GST/HST Memoranda Series. We are bound by this ruling provided that none of the above issues is currently under audit, objection, or appeal; that there are no relevant changes in the future to the Excise Tax Act, or to our interpretative policy; and that you have fully described all necessary facts and transaction(s) for which you requested a ruling.

Explanation

Under subsection 4(1) of the ETA, the tax does not apply to a contract of insurance with any insurer authorized under the laws of Canada to transact the business of insurance if the contract is entered into through a broker in Canada.

Under subsection 4(4) of the ETA, where a contract of insurance is entered into or renewed through more than one broker or agent, the contract is deemed to have been entered into or renewed through the broker or agent directly retained or instructed by the insured and not through any other broker or agent.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 954-6720.

Yours truly,

Denis Linteau
Other Levies Unit Unit
Excise Duties and Taxes Division Division
Excise and GST/HST Rulings Directorate

2004/12/14 F — RITS 56109 — Inquiétudes concernant les rapports mensuels