4 October 1995 GST/HST Interpretation 1995-10-04 - Refund of Duties and Taxes, i.e., Customs Duty, Goods and Services Tax (GST), and Possible Excise Tax, Paid on a Motor Vehicle You Purchased From an Automobile Dealer in February 1992

                                                                        File 11842-3 XXXXX

                                                                        October 4, 1995

Dear XXXXX

This is in response to your letter of July 6, 1995, addressed to Ms. Valerie Morin, Diplomatic Liaison Officer, in which you inquire about a refund of duties and taxes, i.e., customs duty, goods and services tax (GST), and possible excise tax, paid on a motor vehicle you purchased from an automobile dealer in February 1992.

Ms. Pauline Crête-Méranger of Customs Tariff Programs has provided you with a response in relation to the customs duty. As she indicated in her letter to you dated July 8, 1995, your questions about the remaining taxes have been brought to our attention, namely the GST and excise tax.

With respect to your eligibility for GST relief on the purchase of the vehicle, it appears to us that your country's reciprocal agreement with Canada is quite clear on this subject. We understand that the Department of Foreign Affairs informed the Embassy of XXXXX by Diplomatic Note on April 5, 1991, that its diplomatic missions, consular posts, and personnel would not receive GST relief on the importation of goods (including foreign automobiles) which are imported by a Canadian dealer and subsequently sold to one of its diplomatic or consular personnel. To have the vehicle treated as an importation, for purposes of GST, and therefore to be relieved of paying tax, you would need to have imported it directly within the "first arrival" time frame specified by Customs regulations.

As for relief from excise tax, we note that the Motor Vehicle Purchase Agreement between XXXXX , the importer of record, and yourself, does not mention either of the items for which consular employees are provided excise tax relief under sections 6 and 8 of Schedule I to the Excise Tax Act; namely, a) an air conditioning unit, which would normally be listed on the purchase agreement as "Optional Equipment", or b) an amount levied where a motor vehicle exceeds standard mass weight, which would also receive a separate listing on the purchase agreement.

Should you have any further questions, please contact me at (613) 954-3551 or Joanne Hoople at (613) 952-8533.

Yours truly,

Marilyn Viger
Manager
Governmental Sectors and Federal-Provincial Relations
GST Rulings and Interpretations
Policy and Legislation

c.c.:      XXXXX
Pauline Crête-Méranger,
 Tariff Administrator,
 Tariff Programs
XXXXX
Valerie Morin,
 Diplomatic Liaison Officer
Joanne Hoople [Domus 2347]
Domus 2347: Legislative Background

The author of this letter refers to "principles of international law, ""free entry privileges on first arrival." To uphold the principles of international law, Canada has incorporated the Vienna Convention on Consular Relations into its domestic legislation. The convention is incorporated as Schedule II to the Foreign Missions and International Organizations Act (FMIOA).

Paragraph (1) of Article 49 of Schedule II to the FMIOA grants a consular employee relief from duty and taxes on importations and paragraph (2) of this article limits that relief to the "time of first arrival" Section 4 of the same legislation permits the department of Foreign Affairs to withdraw or restore these or other privileges according to the generally accepted principle of reciprocity.