Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
Excise Tax and Fuel Charge Division
Place de Ville, Tower A, 5th Floor
320 Queen Street
Ottawa ON K1A 0L5
[Client]
[Client Address]
RITS: 9000236
August 15, 2024
Subject: EXCISE INTERPRETATION – Eligibility for Refund of Excise Tax
Thank you for your letter of September 22, 2023 to the Canada Revenue Agency (CRA), concerning your eligibility for relief from the excise tax on fuel pursuant to section 68.17 of the Excise Tax Act (the Act) and the Ships’ Stores Regulations (the Regulations).
We apologize for the delay in responding to your letter.
All legislative references are to the Act and the Regulations, unless otherwise specified.
Statement of Facts
Based on the information that you have provided, we understand the following:
1. [Client] is a fuel vendor domiciled outside Canada that is not licensed under the Act.
2. [Client] purchases fuel with the excise tax embedded in the purchase price from Canadian suppliers and sells the fuel to cruise ships arriving in Canada solely to refuel.
3. The cruise ships promptly leave Canada after refueling.
4. The cruise ships which are not specifically listed in the Regulations are ocean-going, for commercial use, and required to report under section 95 of the Customs Act.
Interpretation Requested
You would like to know whether [Client] is eligible for refund of excise tax on the fuel sold to cruise ships.
Legislation
Under section 68.17 of the Act, a vendor is eligible for a refund of excise tax on fuel sold for use as ships’ stores.
The Regulations designate certain goods on board prescribed classes of conveyances as ships’ stores. In particular, as described in subitem 1(1) of the Schedule to the Regulations, fuel is designated as ships’ stores if it is consumed in the operation and maintenance of a conveyance meeting all of the following criteria:
1) it is an ocean-going ship;
2) it engages in international trade;
3) it is required to report under section 95 of the Customs Act; and
4) it is proceeding outside Canada.
Interpretation Given
[Client] would be eligible for refund of excise tax on the fuel sold to cruise ships in accordance with section 69.17 of the Act, provided that the cruise ships meet all the criteria under subitem 1(1) of the Schedule to the Regulations.
Explanation
Based on the information provided in your letter and our subsequent phone calls with you, the cruise ships you have described meet the criteria under subitem 1(1). The cruise ships are ocean-going vessels engaged in international trade through the transportation of passengers. According to your letter and our conversations, the cruise ships are entering Canada for the sole purpose of re-fueling and then leaving Canada immediately. The cruise ships in this scenario which are leaving with fuel, would be required to report under section 95 of the Customs Act.
Accordingly, it is the CRA’s view that [Client] would be eligible for refund of excise tax on the fuel sold to refuel the cruise ships pursuant to section 68.17 of the Act.
The interpretation(s) given in this letter, including any additional information, is not a ruling and does not bind the CRA with respect to a particular situation. Future changes to the Act, regulations, or the CRA’s interpretative policy could affect the interpretation(s) or the additional information provided herein. For further information see the publication “Requesting an Excise and Specialty Tax Ruling or Interpretation”.
If you require clarification with respect to any of the issues discussed in this letter, please call William Ferguson directly at 343-551-2259.
Yours truly,
Frances Truong
Acting Manager, Excise Taxes and Other Levies
Excise and Specialty Tax Directorate
Legislative Policy and Regulatory Affairs Branch
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