Please note that the following Policy Statement, although correct at the time of issue, may not have been updated to reflect any subsequent legislative changes.

GST/HST Policy Statement P-074

Date of Issue

December 1, 1992

Subject

Taxable status of storage charges.

Legislative Reference(s)

Part V of Schedule VI to the Excise Tax Act.

National Coding System File Number(s)

11720-1

Effective Date

January 1, 1991

Text

This statement of administrative policy discusses the taxable status of storage charges in respect of gas to be exported. In circumstances where gas storage facilities are being provided by a registered resident in Canada as part of a storage agreement, the storage is considered a supply of a storage service, not a supply of real property. It is not considered to be a supply of real property because access to certain storage facilities is not specifically provided to the user and/or a "lease" agreement or "licence" to use is not evident.

Therefore, in the circumstances where the non-resident shipper acquires the gas in Canada for export, the storage service would not qualify as a zero-rated supply under section 7 of Part V of Schedule VI to the Excise Tax Act since it cannot be said that the service is not "primarily for the consumption, use or enjoyment in Canada of any person."

In the circumstances where a non-resident shipper imports gas into Canada for the single purpose of storing the gas in the storage facilities of a registered carrier, the storage service would qualify as a zero-rated supply under section 4 of Part V of Schedule VI because it is a supply of a service in respect of tangible personal property that is ordinarily situated outside of Canada and that is temporarily imported for the sole purpose of having the service performed. The gas is then exported as soon as is practicable after the service is performed.

There is no further processing of the gas while in storage, except that which is reasonably necessary for the transportation of the gas.

Tax would only be recoverable where the non-resident shipper is registered for GST purposes.