19 February 2008 Excise Interpretation 101808 - Excise Tax and the Government of the NWT

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 letter XXXXX concerning the application of subsection 14(3) of the Air Travellers Security Charge Act to sub-charter flights.

All legislative references are to the Air Travellers Security Charge Act (ATSCA) and the Regulations therein, unless otherwise specified.

Interpretation Requested

You would like to know whether subsection 14(3) or any other legislative provisions applies to the following scenario:

Scenario

1. The air transportation service is acquired in Canada, and involves domestic air travel between listed airports.

2. Registered Air Carrier "X" and Registered Air Carrier "Y" are both designated air carriers.

3. Registered Air Carrier "X" and Registered Air Carrier "Y" are both in the business of charter flights.

4. Registered Air Carrier "X" sells air transportation to individuals or groups and invoices them.

5. Registered Air Carrier "X" enters into an agreement with Registered Air Carrier "Y" for "Y" to provide the air transportation service.

6. Tickets are issued by Registered Air Carrier "X".

7. Registered Air Carrier "Y" provides the air transportation service.

8. Registered Air Carrier "X" pays Registered Air Carrier "Y" for this service.

Interpretation Given

Based on the information provided, the issuing air carrier (Registered Air Carrier "X") is liable for the ATSC.

Analysis

The general rule of subsection 14(1) is subject to subsections 14(2) and (3). Subsection 14(2) does not apply in this circumstance, as it involves an air transportation service, acquired in Canada, which is provided by two or more carriers. In your example, only one registered air carrier provides the air transportation service. Therefore, the application of the ATSC in this case falls under subsection 14(3), which deems the issuing carrier as the party liable for the ATSC.

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 ATSCA, 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) 954-6720.

Yours truly,

Sharon Kendall
Excise Taxes and Other Levies Unit
Excise Duties & Taxes Division
Excise and GST/HST Rulings Directorate

2007/07/05 — RITS 95225 — Calculation of Duties on Imported Cigars