Canada Revenue Agency (CRA) published Notice ETSL77 Budget 2016 Restricting the Relief of Excise Tax on Diesel Fuel and Aviation Fuel advising of proposed changes effective July 1, 2016.
The notice provides information on two proposed excise tax amendments to the Excise Tax Act (the Act) included in the federal budget tabled by the Minister of Finance on March 22, 2016. The first amendment addresses fuel used as heating oil, and the second addresses diesel fuel and aviation fuel for use in the generation of electricity. These two amendments would come into force on July 1, 2016.
The Excise Tax Act (the Act) contains provisions that relieve the excise tax imposed on diesel fuel when used in specific instances.
Fuel oil delivered or imported after June 30, 2016 is subject to the new rules. The exemption for fuel oil purchased as heating oil for use in industrial processes would no longer apply after June 30, 2016.
Diesel fuel and aviation fuel consumed for motive purposes is subject to excise tax. No excise tax relief would apply to fuel used to produce electricity in any vehicle, regardless of the purpose for which the electricity is used. This would eliminate excise tax exemptions or refunds currently available for the portion of fuel consumed in a vehicle for the purpose of “hotel services”, on or after July 1, 2016.
Consult the CRA notice for more information.