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 and GST/HST Rulings Directorate
Place de Ville, Tower A, 11th floor
320 Queen Street
Ottawa, ON. K1A 0L5
[Addressee]
Case Number: 176985
Business Number: […]
Dear [Client]:
Subject: EXCISE INTERPRETATION
Excise tax licensing - [whether manufacturing]
Thank you for your letter of [mm/dd/yyyy], regarding the excise tax licensing application to […] petroleum transactions, […]. I apologize for the delay in replying.
All legislative references are to the Excise Tax Act (the Act) and the regulations therein, unless otherwise specified.
INTERPRETATION REQUESTED
[…]([…][ABC]) is a licensed manufacturer. […]. [ABC] would like to know whether it would be considered as a licensed manufacturer, in either or both of these […] petroleum transactions.
Scenario #1
In the first example, [ABC] acquires gasoline/diesel fuel and ethanol/biomass from third party refiners in exchange for similar product at […]([…][X]).
[X] is a wholly-owned subsidiary of [ABC]. The activities are as follows:
(a) [ABC] receives a single invoice from the third-party refiner containing separate charges for each product as well as a fee to blend the product;
(b) [ABC] supplies proprietary additives to the third party refiners, and contracts with them to do the blending. The blended fuel is delivered to retail outlets;
(c)This arrangement is known as an exchange. It is done to expedite delivery.
Scenario #2
[ABC] also acquires diesel fuel/gasoline from [X]:
(a) [ABC] purchases ethanol and biomass from third-party producers and delivers it to the refinery, so that these products can be blended into ethanol-blended gasoline and bio-diesel;
(b) [ABC] retains title to the ethanol and biomass;
(c) [ABC] purchases diesel fuel/gasoline from [X]. [X] invoices [ABC] for these sales;
(d) In addition, [X] blends [ABC]’s proprietary additives into the diesel fuel and gasoline;
(e) [ABC] directs the blending;
(f) [X] charges a blending fee to [ABC] for this service.
INTERPRETATION GIVEN
“manufacturer or producer” includes:
“(f) any person who, by himself or through another person acting for him, prepares goods for sale by assembling, blending, mixing, cutting to size, diluting, bottling, packaging or repackaging the goods or by applying coatings or finishes to the goods, other than a person who so prepares goods in a retail store for sale in that store exclusively and directly to consumers.”
Scenario #1
Based on the information provided in this example, [ABC] is considered to be performing a marginal manufacturing operation. It is considered as a “manufacturer or producer” under the paragraph 2(1)(f) definition of “manufacturer or producer”.
Scenario #2
Based on the information provided in this example, [ABC] is considered to be performing a marginal manufacturing operation. It is considered as a “manufacturer or producer” under the paragraph 2(1)(f) definition of “manufacturer or producer”.
[…]
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, 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.
Should you have any questions with respect to this letter, please call me at (613) 670 7276. […].
Yours truly,
Dennis Dekleva
Excise Taxes and Other Levies
Excise Duties and Taxes Division
Excise and GST/HST Rulings Directorate
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