ETSL57 Application of the Excise Tax on Air Conditioners in Unsalvageable or Scrap Vehicles

Excise Taxes and Other Levies Notice

March 2006

Background

This notice refers to a court case heard by the Federal Court (Pièces d'autos usagées RTA (1986) Inc. v Canada, 2005 FC 771) concerning an appeal of a decision of the Canadian International Trade Tribunal (CITT) dated April 21, 2004, in which CITT denied the plaintiff's refund application for overpayment of excise tax on vehicle air conditioners. The plaintiff is in the business of importing vehicles that are damaged beyond repair, to be dismantled for parts and scrap. The vehicles are not imported to be used as or sold as vehicles to be driven on roads. The plaintiff's appeal was allowed on May 5, 2005, and the Canada Revenue Agency chose not to appeal this decision.

As a result of the Federal Court decision, the excise tax is not applicable on an air conditioner installed in any vehicle that is unsalvageable or destined for parts or scrap.

Who can I contact?

For further information, call the Excise and Specialty Tax Directorate at 1-866-330-3304.