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.
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TO:
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XXXXX
XXXXX
XXXXX
XXXXX
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FROM:
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Michael Moskovic
Senior Rulings Officer
Other Levies Unit
20th floor, Tower 'A', Place de Ville
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DATE:
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February 2, 2006
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CASE NUMBER:
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77509
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SUBJECT:
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Air Travellers Security Charge (ATSC)
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I refer to your memo XXXXX regarding the application of the ATSC to XXXXX, where it charged and collected the ATSC in error. As we discussed, XXXXX charged its passengers the ATSC for one-way flights XXXXX, where there were no emplanements in Canada.
XXXXX position
XXXXX agrees that the ATSC was collected in error, but it contends that a proper amount of ATSC has been remitted to the CRA on all chargeable emplanements. Any ATSC collected in error belongs to XXXXX because the likelihood of a passenger trying to recoup it from XXXXX or the CRA is minimal. Administratively, it would be cumbersome for XXXXX to refund its passengers the over-charged ATSC amount(s). Its passengers have paid a "net price" and are likely unaware of the error.
Legislation
Section 2 of the Air Travellers Security Charge Act (ATSCA) provides legislative definitions, including the term "chargeable emplanement", for purposes of applying the ATSC. This term describes the type of emplanement that must be included in an air transportation service for the service to be subject to a charge. "Chargeable emplanement" means an embarkation by an individual at a listed airport on an aircraft operated by a particular air carrier, subject to specific exceptions. In this case, there are no emplanements – chargeable or not – in Canada.
Subsection 15(1) of the ATSCA provides that amounts collected by a person as or on account of the ATSC are considered to be held in trust for Her Majesty.
Pursuant to subparagraph 17(2)(b)(iii) and paragraph 17(2)(c) of the ATSCA, a registered air carrier must remit to the CRA all other amounts collected as or on account of the ATSC.
Subsection 32(2) of the ATSCA provides for a refund or credit of an amount collected as or on account of the ATSC in excess of the ATSC properly collectible. A person is entitled to a refund or credit, from a registered air carrier, of the ATSC collected in error. This includes a situation where no ATSC was payable.
Interpretation Provided
The ATSC does not apply where an air transportation service does not include a chargeable emplanement. Such is the case with an XXXXX routing, as there is no emplanement in Canada. However, if XXXXX or any registered air carrier charges its customers the ATSC for this routing, it must either:
(i) refund the ATSC to its customers [subsection 32(2)]; or
(ii) remit it to the CRA [subparagraph 17(2)(b)(iii) and paragraph 17(2)(c)].
Although XXXXX is not required to charge the ATSC in this circumstance, it cannot keep the ATSC that it has collected from its customers.
The foregoing comments represent our general views with respect to the subject matter of your memo. Proposed amendments to the ATSCA, if enacted, could have an effect on the interpretation provided herein.
Should you or your team members have any questions, please feel free to call me anytime at (613) 957-9877.
2005/10/20 — RITS 58003 — Follow-up – Request for Additional Information
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