6 November 2003 GST/HST Interpretation 48394 - Value of Temporary Importation of Leased Aircraft

Please note that the following documents, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ces documents, bien qu'exacts au moment émis, peuvent ne pas représenter la position actuelle de l'Agence.

Dear XXXXX:

Thank you for your facsimile XXXXX (with attachments), in which you request authorization for partial relief from the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) with respect to the importation of two leased aircraft by your client.

We understand that:

•   XXXXX XXXXX (the "Lessee") has entered into an agreement to sublease the following aircraft from XXXXX XXXXX (the "Lessor"), a non-resident person with whom the Lessee deals at arm's length:

Aircraft Type

Model Number

Serial Number

Registration Number

XXXXX

XXXXX

XXXXX

XXXXX

XXXXX

XXXXX

XXXXX

XXXXX

•   The lease agreement for the XXXXXis for a period beginning on XXXXX, and the lease agreement for the XXXXX is for a period beginning on XXXXX. Both lease agreements will terminate on XXXXX.

•   The importation date of the XXXXX is XXXXX, and the importation date of the XXXXX is XXXXX. Both aircraft will be exported on or before XXXXX.

•   The total number of months that the aircraft are to be held in Canada by the Lessee under a lease with the Lessor will not exceed 24 months.

Based on the information provided as set out above, authorization is hereby granted to determine the value of the imported aircraft under subsection 215(2) of the Excise Tax Act and section 14 of the Value of Imported Goods (GST/HST) Regulations, as 1/60th of the value for duty of the aircraft for each month or part of a month that the aircraft remains in Canada, plus any remaining duties payable in respect of the aircraft. This authorization expires XXXXX. Any request for an extension to the authorization period should be submitted to this office for approval prior to the expiry date of the authorization.

In order to qualify for partial relief pursuant to section 14 of the Value of Imported Goods (GST/HST) Regulations, an imported conveyance must be exported on or before the earlier of the day that is 24 months after the day on which the conveyance is imported, and the day on which the lease is terminated. Also, if the conveyance is imported more than once, the cumulative number of months in the periods throughout which the conveyance is held in Canada by the lessee under a lease with the lessor must not exceed 24 months.

The importer is required to meet the Customs requirements as outlined in Customs Memorandum D8-1-1 Temporary Import Regulations with respect to the processing and control of temporary import documents and export documentation and procedures.

Please contact the Customs office XXXXX for additional information regarding import procedures and export requirements.

The foregoing comments represent our general views with respect to the subject matter of your letter. Any amendments to the Excise Tax Act could have an effect on the interpretation provided herein. These comments are not rulings and, in accordance with the guidelines set out in GST/HST Memoranda 1.4, do not bind the Canada Customs and Revenue Agency with respect to a particular situation.

Should you require clarification with respect to any of the issues discussed in this letter, please contact me at (613) 952-6743.

Additional reference material including forms and guides as well as CCRA products and services can be found on our website at www.ccra-adrc.gc.ca.

Yours truly,

Cheryl R. Leyton
Border Issues Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate