10 March 2008 Excise Interpretation 100968 - Security For Non-Resident Exporters of Softwood Lumber

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 XXXXX concerning the application of the Excise Tax Act (ETA) to fuel sold to the Government of the Northwest Territories (GNWT).

All legislative references are to the ETA and the regulations therein, unless otherwise specified.

We understand that your client purchases fuel and pays excise tax on the purchases. Your client then sells the fuel to the GNWT.

Interpretation Requested

You would like to know whether your client is able to sell fuel to the GNWT exempt of the excise tax.

Interpretation Given

Based on the information provided, your client may sell fuel to the Government of the Northwest Territories (GNWT) exempt of excise tax if the GNWT has purchased the goods for any purpose other than that specified in subsection 68.19(1) as follows:

(a) resale,

(b) use by any board, commission, railway, public utility, university, manufactory, company or agency owned, controlled or operated by the government of the province or under the authority of the legislature or the lieutenant governor in council of the province, or

(c) use by Her Majesty in that right, or any agents or servants of Her Majesty in that right, in connection with the manufacture or production of goods or use for other commercial or mercantile purposes.

If the fuel is sold exempt of the Federal Excise Tax (FET), your client, as the supplier, would be eligible to file Form N15, "Application for Refund/Deduction of Excise Taxes" with the Canada Revenue Agency (CRA). The reason for the refund being that a subsequent exempt sale was made to GNWT.

In the case where your client is not aware of the purpose for which the fuel is to be used by GNWT, the FET is collectible by your client at the time of the sale. Then, depending upon the use of the fuel, the GNWT may be eligible to file the Form N15 directly with the CRA.

The foregoing comments represent our general views with respect to the subject matter of your request. These comments are not rulings and, in accordance with the guidelines set out in GST/HST Memorandum 1.4, Goods and Services Tax Rulings, do not bind the Canada Revenue Agency with respect to a particular situation. Future changes to the Excise Tax Act, regulations, or our interpretative policy could affect this interpretation.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (613) 954-4132.

Yours truly,

Joan Thompson
Rulings Officer
Excise Taxes and Other Levies

2008/02/19 — RITS 101808 — Application of the ATSC to Sub-Charter Flights