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 OL5
[Addressee]
Case Number: 183141
Dear [Client]:
Subject: EXCISE INTERPRETATION
On the ability to sell aviation gasoline and jet fuel Federal Excise Tax (FET) exempt and to apply for a FET refund on sales of these petroleum products as ships stores
Thank you for your letter of [mm/dd/yyyy], concerning issues related to international flights, ships stores and the FET on aviation gasoline and jet fuel.
All legislative references are to Excise Tax Act (the Act) Section 1-8 and the regulations therein, unless otherwise specified.
INFORMATION PROVIDED
We understand:
1. […][The Company] is a distributor of aviation fuel at several airports in Canada.
2. Approximately […]% of fuel sales are to foreign and domestic commercial airlines operating flights carrying passengers.
3. Approximately […]% of fuel sales are to foreign and domestic carriers operating flights carrying only cargo, (for example UPS and FedEx).
4. Approximately […]% of fuel sales are to foreign and domestic companies (including privately held companies) operating corporate aircraft (aircraft owned by a specific company that is used exclusively by employees for business purposes) carrying passengers and/or cargo.
5. [The Company] does not hold a wholesale license, (W license) granted under the Act.
6. [The Company] purchases all aviation fuel FET paid.
INTERPRETATION REQUESTED
You would like to know:
1. Are [the Company’s] customers entitled to purchase aviation fuel excise tax exempt when used to operate international flights?
2. Is [the Company] entitled to file an N-15 Application for Refund/Rebate, to recoup FET paid on fuel sold FET exempt as ships stores?
INTERPRETATION GIVEN
The Ships' Stores Regulations state that an “international aircraft means an aircraft operating internationally in the transportation of passengers or goods, or both, for reward”, and designate certain classes of goods as "ships' stores" where they are used on board. Fuel that is consumed on airplanes on international flights is eligible for relief of the FET by virtue of the Ships' Stores Regulations.
The sale of fuel for use as ships’ stores is always subject to FET under the Act. There is no provision in the Act which allows for the sale of fuel for use as ships’ stores exempt of the FET. However, where the fuel is for use as ships’ stores, the Act does provide for a refund of the FET.
Accordingly, [the Company’s] customers are not entitled to purchase aviation fuel excise tax exempt when used to operate international flights. However, pursuant to subsection 68.01(2) of the Act, [the Company’s] customers may apply for a refund of excise tax on tax-paid fuel, where [the Company] has not itself applied for a refund in respect of the fuel. Under section 68.17, where FET has been paid on the fuel and [the Company] has sold the fuel to a customer for use as ships’ stores, [the Company] may apply for a refund of the amount of the FET paid.
In order to be eligible for the rebate, [the Company] must obtain certification from their customer that the fuel is for use as ships’ stores. This can be done by providing [the Company], at the time of delivery, a form K36A Ships’ Stores Declaration and Clearance Certificate that has been authorized by the Canada Border Services Agency (CBSA) or other acceptable documentation.
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 Canada Revenue Agency (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.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-670-7208.
Yours truly,
Michael Ryder
Rulings Officer
Excise Duties and Taxes Division
Excise and GST/HST Rulings Directorate
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