Go to Home Page

Tax and Revenue Administration
Other Fuels - Refunds and Rebates
Information Circular CL-OF-4


Last Reviewed: December 22, 2016
Produced by: Alberta Treasury Board and Finance, Tax and Revenue Administration
For more information: tra.carbonlevy@gov.ab.ca

CL-OF-4 / December 2016

OTHER FUELS - REFUNDS AND REBATES

The Government of Alberta recognizes that many First Nations people and communities in the province prefer not to describe themselves as Indians/Indian bands. These terms have been used where necessary to reflect their legal meaning in the federal Indian Act.

NOTE: This information circular is intended to explain legislation and provide specific information. Every effort has been made to ensure the contents are accurate. However, if a discrepancy should occur in interpretation between this information circular and governing legislation, the legislation takes precedence.

This Information Circular explains exemptions from paying the carbon levy on other fuels under the Climate Leadership Act (the Act) and the Climate Leadership Regulation (the Regulation), which are administered by Alberta Treasury Board and Finance, Tax and Revenue Administration (TRA). Also discussed is the ability to apply for a licence to purchase fuel exempt from the carbon levy in certain circumstances.

Topics include:


DEFINITION OF OTHER FUELS

  1. The term “other fuels” is not definited in the Act or in the Regulation. It is a term used by TRA to represent the following fuels:
    • bunker fuel;

    • butane;

    • coal coke;

    • coke oven gas;

    • ethane;

    • gas liquids;

    • heating distillate oil;

    • heavy fuel oil;

    • high heat value coal;

    • kerosene;

    • low heat value coal;

    • methanol;

    • naphtha;

    • natural gas other than natural gas used for utility heating purposes (for more information on natural gas used for utility heating purposes, please see Information Circular CL-NG-4.

    • raw gas;

    • pentanes plus / condensate;

    • propane for heating purposes (for more information on propane for motive purposes, please see Information Circular CL-T-4);

    • refinery gas;

    • refinery petroleum coke; and

    • upgrader petroleum coke.

Back to Top

REFUND OF CARBON LEVY ON OTHER FUELS

  1. Generally, a recipient other than a consumer will pay carbon levy on the other fuel it purchases to the supplier who sells the other fuel to the recipient, and recovers the carbon levy from the purchaser who buys the other fuel from the recipient.


  2. A recipient who is not a consumer may apply to TRA for a refund or a credit for all or part of carbon levy paid by the recipient for other fuel in situations including when:
    • the recipient has paid carbon levy; and

    • one of the following circumstances has occurred:

      • other fuel was sold exempt from carbon levy to a holder of a carbon levy exemption certificate (for more information on carbon levy exemptions and licences, please see Information Circular CL-OF-3, Other Fuels − Exemptions and Licences);

      • other fuel was sold exempt from carbon levy to a carbon levy licence holder;

      • other fuel was exported from Alberta in bulk;

      • a verifiable quantity of other fuel was stolen or destroyed;

      • other fuel was rebranded and the carbon levy rate that applied to the other fuel after it was rebranded is lower than the carbon levy rate that applied to the other fuel before it was rebranded;

      • the recipient;

        • is unable to sell other fuel due to contamination;

        • is unable to recover carbon levy paid on other fuel from the person that sold the fuel to the recipient; and

        • provides satisfactory evidence that other fuel was disposed of in a manner that did not contravene an enactment and did not involve combustion or venting;

      • other fuel was sold to a person that purchased the other fuel on credit and all or a portion of the amount of the debt in respect of the sale is a bad debt;

      • the recipient remitted to TRA an amount of carbon levy that exceeded the amount that the recipient was required to remit when the other fuel was sold;

      • the recipient who purchased other fuel;

        • remitted an amount of carbon levy that exceeded the amount that the recipient was required to pay to the person that sold other fuel to the recipient; and

        • is unable to recover the excess amount from the person that sold other fuel to the recipient.
  1. A consumer may apply to TRA for a refund or a credit for all or part of carbon levy paid by the consumer for other fuel in situations including when:

    • carbon levy paid by the consumer exceeded the amount the consumer was required to pay and the consumer is unable to recover the excess amount from the vendor;

    • the consumer purchased other fuel and the consumer:
      • is unable to use other fuel due to contamination;

      • is unable to recover the carbon levy paid on other fuel from the vendor; and

      • provides satisfactory evidence to TRA that other fuel was disposed of in a manner that did not contravene an enactment and that did not involve combustion or venting;
    • other fuel was rebranded and the carbon levy rate applicable to the other fuel after the rebranding is lower than the carbon levy rate that was applicable before the rebranding.

Back to Top

PROCESS FOR APPLICATION OF REFUND

  1. Generally, an entity must register with TRA as a claimant before applying for a refund of carbon levy paid on other fuel. To register as a claimant with TRA, complete the appropriate Carbon Levy Claimant Registration form available on TRA's Carbon Levy Publications and Forms page.

    However, an entity that is already registered as a direct remitter with TRA does not need to register again as a claimant. For information on registering as a direct remitter, see Information Circular CL-OF-1, Other Fuels − Registration.


  2. An application for a refund of carbon levy, other than a refund related to a bad debt, must:

    • be made in the form and manner specified by TRA;

    • include the amount of carbon levy to be refunded; and

    • except for stolen or destroyed fuel under parapraph 7, be received by TRA not later four years after the end of the calendar year in which the circumstance giving rise to a claim for a refund has occurred.

  3. An application for a refund of carbon levy relating to other fuel that was stolen or destroyed must be received by TRA within one year after the date the other fuel was stolen or destroyed.


  4. On receipt of a refund application, TRA will review the application and TRA may ask for additional information to determine the claimant’s eligibility. Claimants are to maintain all invoices and any other records and documents required to prove the claim amount. Records relating to a refund must be kept for four years from the end of the calendar year in which the claim was paid.


  5. If TRA determines that the claimant is entitled to a refund, TRA will pay the refund equal to the amount of carbon levy paid under the Act and the Regulation by the claimant on the amount of other fuel eligible for a refund.


  6. The amount of refund TRA may pay for other fuel that was rebranded to a fuel with a lower carbon levy rate or to a substance that is not a fuel is the difference between the carbon levy paid on the other fuel before it was rebranded and the carbon levy, if any, payable on the fuel or substance after it was rebranded.


  7. Where losses of other fuel are unverifiable, TRA may, on application by a recipient, provide a refund of all or part of the carbon levy paid by the recipient on the lost other fuel.


  8. To apply for a refund of carbon levy paid by an exempt-sale vendor for sales of other fuel exempt from carbon levy to Indians and Indian bands, the exempt-sale vendor must complete form AT5201 - Alberta Indian Tax Exemption Retailer Registration - Fuel Other than Gasoline, Deisel, or Propane For Motive Use.


  9. If TRA refuses in whole or in part an application for a refund or credit, TRA will give to the claimant a notice of disallowance specifying the amount of the disallowance and the reasons for it.

Back to Top

REFUND FOR BAD DEBT AND THE APPLICATION PROCESS

  1. “Bad debt”means a debt owing by a purchaser to a recipient that the recipient has deducted in computing and reporting the recipient’s income for the current or preceeding year for the purposes of the Income Tax Act (Canada).


  2. An entity must register with TRA as a claimant before applying for a refund of carbon levy paid on the other fuel for bad debt. To register as a claimant with TRA, complete the appropriate Carbon Levy Claimant Registration form available on TRA's Carbon Levy Publications and Forms page.

    However, an entity that is already registered as a direct remitter with TRA does not need to register again as a claimant. For information on registering as a direct remitter, see Information Circular CL-OF-1, Other Fuels − Registration.


  3. An application for a refund of carbon levy in respect of a bad debt must

    • be made in the form and manner specified by TRA;

    • include the amount of carbon levy to be refunded; and

    • be received by TRA within four years after the end of the taxation year in which the bad debt was deducted in computing and reporting the claimant’s income for the taxation year for the purposes of the Income Tax Act (Canada).

  4. On receipt of an application, TRA will review the application and may request additional information to determine the claimant’s eligibility. Claimants are to maintain all invoices and any other records and documents required to prove the claim amount.


  5. If TRA determines that the claimant is entitled to a refund, TRA will pay the refund in the amount determined in accordance with the formula:

A / B x C

where

A is the amount of the bad debt at the time of the application to a maximum of the amount of B;

B is the original amount of the debt at the time of sale;

C is the amount of carbon levy that was remitted or paid relating to the sale.

  1. For the purposes of determining the amount of carbon levy owing in respect of a bad debt, at the time a claimant collects a portion of a debt owing by a purchaser to the claimant, the amount collected is deemed to include an amount of carbon levy proportionate to the amount of carbon levy in the debt immediately before the time of collection.


  2. If a claimant subsequently collects full or partial payment in respect of a bad debt for which the claimant has received a refund of carbon levy, the claimant must repay to TRA the portion of the carbon levy refunded to the claimant determined in accordance with the formula:

A / B x C

where

A is the amount of debt collected to a maximum of the amount of B;

B is the amount of the bad debt at the time of the application for a refund;

C is the amount of the refund received from TRA.

  1. For the purposes of determining the amount of the refund, if a claimant pays a fee to another person for the collection of accounts receivable on the claimant’s behalf, the fee does not reduce the amount collected for the purposes of determining the claimant’s bad debt with respect to those accounts receivable.

Back to Top

REBATE OF CARBON LEVY ON OTHER FUELS

  1. A consumer may apply to TRA for a rebate for all or part of carbon levy paid by the consumer on other fuels in situations including when:

    • other fuel was used by the Government of Canada;

    • other fuel

      • was purchased at a location on a reserve; or

      • delivered to an address on reserve; and

      • was purchased for personal use by an Indian or for use by an Indian band; or

    • the fuel was used by a consumer, other than an Indian or Indian band, for a purpose or use for which the consumer would have been entitled to purchase the fuel exempt from the carbon levy had the consumer provided a carbon levy exemption certificate or other evidence of exemption at the time the fuel was purchased.

  2. TRA will not pay a refund for an amount of carbon levy paid if the recipient or the consumer is entitled to a rebate for the amount.

Back to Top

PROCESS FOR APPLICATION OF REBATE

  1. To apply for a rebate of carbon levy paid on other fuel, an entity must first register with TRA as a claimant. To register as a claimant with TRA, complete the appropriate Carbon Levy Claimant Registration form available on TRA's Carbon Levy Publications and Forms page.

  2. An application for a rebate of carbon levy paid for other fuels must:

    • be made in the form and manner specified by TRA;

    • include the amount of carbon levy to be refunded;

    • except for a rebate to an Indian or Indian Band, be in respect of each calendar quarter; and

    • be received by TRA not later four years after the end of the calendar year in which the fuel was purchased.

  3. On receipt of an application, TRA will review the application and may request additional information to determine the claimant’s entitlement. Claimants are to maintain all invoices and any other records and documents required to prove the claim amount.


  4. If TRA determines that the claimant is entitled to a rebate, TRA will pay the rebate equal to the amount of carbon levy paid by the claimant on the amount of the other fuels eligible for the rebate.


  5. An application for a rebate by an Indian or an Indian band may be made at any time using form AT5133 − Indian or Indian Band Carbon Levy Claimant Registration.


  6. If TRA refuses an application for a rebate in whole or in part, TRA will provide the claimant with a notice of disallowance specifying the disallowed amount and the reasons for the disallowance.

Back to Top

Questions

For additional information on the Carbon Levy, please see TRA's Carbon Levy Publications and Forms page.

For general questions about the Climate Leadership Plan, please refer to the Climate Leadership Plan website at http://www.alberta.ca/climate-leadership-plan.aspx.

For questions about the administration of the carbon levy program, please email us at TRA.CarbonLevy@gov.ab.ca.

 



Home
| Using this Site | Privacy | Accessibility

Contact Us | Search | Site Map | Links

Copyright and Disclaimer

Copyright Government of Alberta

Go to Government of Alberta Home Page