30 May 2005 General Information Letter 60715 - GENERAL INFORMATION LETTER Jet Fuel Purchased for a Domestic Leg of an International Flight

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 your fax XXXXX (with attachments), concerning the application of excise tax to the operations of your client, XXXXX.

Statement of Facts

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

1. XXXXX is a Canadian corporation that carries on business as a manufacturer and supplier of denatured ethyl and beverage grade alcohols.

2. XXXXX is not licensed under subsection 64(2) of the Excise Tax Act (ETA).

3. XXXXX is licensed under the Excise Act, 2001 (Canada). XXXXX is applicable to XXXXX and licence XXXXX is applicable to XXXXX, being locations in XXXXX where denatured ethyl alcohol is manufactured by XXXXX.

4. XXXXX purchases regular unleaded gasoline (the "Gasoline in Issue") from XXXXX. XXXXX will be referred to individually as a "Supplier" and collectively as the "Suppliers").

5. XXXXX uses the Gasoline in Issue to denature ethyl alcohol so that the denatured ethyl alcohol is rendered unfit for human consumption. The denaturing process is in accordance with the Excise Act, 2001 (Canada), the Denatured and Specially Denatured Alcohol Regulations, and all other applicable current and predecessor statutes and regulations.

6. XXXXX does not use the Gasoline in Issue in internal combustion engines.

7. After XXXXX uses the purchased Gasoline in Issue to denature ethyl alcohol, the denatured ethyl alcohol is sold primarily to XXXXX, and also to certain other purchasers (XXXXX and the other purchasers will be referred to individually as a "Purchaser" and collectively and "Purchasers").

8. XXXXX understands that one or more of the Purchasers use the denatured ethyl alcohol, purchased from XXXXX to produce a blended gas-denatured ethyl alcohol fuel mixture, which is sold by the Purchaser to its customers.

Ruling Requested

Is the Gasoline in Issue a product subject to excise tax?

Ruling Given

Based on the facts set out above, we rule that the Gasoline in Issue is not a product subject to excise tax.

XXXXX can purchase unleaded gasoline for use to denature ethyl alcohol exempt of excise tax using the following blanket certificate:

"We certify that the gasoline which we will purchase from you during the period from _______________ to _______________ is for use to denature ethyl alcohol in accordance with the provisions of the Excise Act, 2001.

____________________________

Signature of Purchaser"

Additional Comment

We are of the understanding that XXXXX in the future may begin manufacturing E85 gas-denatured ethyl alcohol grade gasoline. Should XXXXX begin this undertaking, they may be required to obtain a licence under the ETA. The CRA excise tax licensing group should be contacted at 1-866-330-3304 in the event that XXXXX does require an excise tax licence.

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.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact Doug Rollins, Officer, at (613) 952-6178.

Yours truly,

Doug Rollins
Manager
Excise Taxes Unit
Excise Duties and Taxes Division Division
Excise and GST/HST Rulings Directorate

2005/08/22 — RITS 61650 — Part I Tax on Insurance Premiums (Other than Marine) Relief from Penalties and Interest – Subsection 88(1) of the Excise Tax Act