ETSL30 Notice to manufacturers and wholesalers of refined petroleum products

Excise Taxes and Other Levies Notice

April 2, 1996

Most refineries are selling petroleum products into the distribution system using the internationally accepted temperature corrected method of measurement. This methodology adjusts the volume of petroleum products being sold to a constant temperature of 15 degrees Celsius.

Recent developments in the industry regarding the application of the federal excise tax to sales of refined petroleum products require the Canada Revenue Agency (CRA) to clarify its position with respect to accounting for excise tax.

The CRA will permit licensees to account for excise tax based on either ambient temperature volume method or temperature corrected volume method providing the excise tax is calculated using the same method that determines the volume charged to and paid for by the customer as indicated on the invoice. The method chosen for each customer is to be used consistently for at least a two-year period. Switching methods within the year or seasonally is not in accordance with generally accepted accounting practices.

If you wish to change the basis of your tax accounting, contact your regional excise office.