FCN14 Rebate under Section 49
June 2021
The purpose of this notice is to provide information on the rebate under section 49 of the Greenhouse Gas Pollution Pricing Act, including who is eligible for the rebate and how to apply for it.
Generally, a person that has paid an amount of fuel charge in excess of the amount that was payable by that person under Part 1 of the Act may be eligible for a rebate under section 49, provided they apply for the rebate within two years of the original filing of the return and the payment of the fuel charge for which the rebate is claimed. The rebate is calculated by using the fuel charge rate in effect at the time when the person paid the charge to the Canada Revenue Agency (CRA).
Refer to the Act for more information on the various rebates available, including the rebate under section 49, or refer to other fuel charge notices for information specific to each registration type.
In this publication, all references to the “Act” and all references to legislative provisions are to the Greenhouse Gas Pollution Pricing Act. The information included in this publication is for reference purposes only and does not replace the Act or its regulations. Should there be any discrepancy between this information and that contained in the Act or its regulations, the legislative provisions apply.
If the information in this publication does not completely address your particular situation, you may wish to refer to the Act or its regulations, or contact your CRA regional excise office for additional information. These offices are listed at Contact Information – Excise Duties, Excise Taxes, Fuel Charge and Air Travellers Security Charge.
Application of the fuel charge
The federal fuel charge applies on 21 types of fuel and combustible waste. For a list of the fuel types and combustible waste that are subject to the fuel charge and the applicable rates, go to Fuel Charge Rates.
The federal fuel charge applies to certain fuel-related business activities in Alberta, Manitoba, Ontario, Saskatchewan, Nunavut and Yukon. Provinces and territories where the fuel charge applies are known as listed provinces.
Table of Contents
Overview
Under section 49, a rebate must be paid to a person if the person paid an amount of fuel charge in excess of the amount that was payable by that person, whether the amount was paid by mistake or otherwise. The amount of the rebate is the amount of the excess fuel charge the person paid to the CRA.
Errors made on a fuel charge return that do not result in an overpayment of the fuel charge, such as reporting an incorrect listed province, do not require an application under section 49. In such cases, the person should amend its fuel charge return and the related schedule to correct the error.
Eligibility for the rebate
Persons that may be eligible for a rebate under section 49 would generally be registered distributors. However, other persons that pay an excess fuel charge amount to the CRA may also be eligible for a rebate. These persons include other fuel charge registrants and non-registrants such as:
- registered emitters that use fuel outside their covered facilities
- registered users that use fuel for purposes other than non-covered activities
- farmers, fishers or greenhouse operators that divert qualifying fuel to non-eligible activities
The Act contains provisions that impose an obligation on these persons to report and pay the fuel charge to the CRA under certain conditions. If they pay an amount in excess of the amount that was payable to the CRA under the Act, they may similarly be eligible for a rebate under section 49.
A person who is eligible for a rebate may claim the rebate by using Form B403, Rebate for Fuel Charge Paid in Error.
Restrictions
A person’s eligibility for a rebate under section 49 is subject to certain restrictions and limitations.
Under subsection 49(3), a fuel charge rebate is not to be paid to a person if the amount has been taken into account as fuel charge for a reporting period that has been assessed by the CRA or the amount paid was assessed by the CRA.
Under subsection 49(4), a rebate of the fuel charge will not be paid unless the person files Form B403 within two years after the earlier of:
- the day the amount was taken into account in determining the net charge for a reporting period of the person; and
- the day that the amount was paid to the Receiver General.
Under subsection 49(5), a person cannot file more than one rebate application in a calendar month. However, a single application may cover multiple reporting periods.
Under section 50, a rebate is not to be paid to a person if it can reasonably be regarded that the person has obtained or is entitled to obtain a rebate, refund or remission of the amount under any other section of this Act or any other federal act.
Under section 51, a rebate is not to be paid to a person at any time unless all returns of which the CRA has knowledge and that are required to be filed at or before that time by the person under Part 1 of the Greenhouse Gas Pollution Pricing Act, the Excise Tax Act, the Income Tax Act, the Excise Act, 2001, and the Air Travellers Security Charge Act have been filed with the CRA.
Under section 53, only one application may be made for a rebate with respect to any matter.
Under section 54, which applies if a trustee is appointed to administer the estate of a bankrupt person under the Bankruptcy and Insolvency Act, any fuel charge rebates that the bankrupt person was entitled to prior to the appointment will not be paid unless all returns that are required to be filed under Part 1 of the Greenhouse Gas Pollution Pricing Act, the Excise Tax Act, the Income Tax Act, the Excise Act, 2001, and the Air Travellers Security Charge Act have been filed and all outstanding amounts have been paid.
Example 1
A registered distributor delivers 500 litres of gasoline to a non-registrant retailer in a listed province. The non-registrant retailer is not eligible to register and is not eligible for relief through an exemption certificate. As a result, the fuel charge applies to this transaction. The registered distributor erroneously reports and pays an amount of fuel charge to the CRA based on 600 litres of gasoline delivered to the retailer.
Two months later, the registered distributor recognizes its error and overpayment based on the additional 100 litres of gasoline. The registered distributor files a single application in respect of the matter using Form B403 within the applicable two-year time period and none of the specified restrictions in subsection 49(3), section 50 or section 51 of the Act apply.
The registered distributor is eligible for a rebate under section 49 for the amount of fuel charge reported and paid on the extra 100 litres reported.
Example 2
A registered distributor delivers 1,000 litres of light fuel oil (diesel) to a registered emitter at its covered facility in a listed province. The fuel charge is not applied because the registered emitter provided its exemption certificate (Form L401-1, Fuel Charge Exemption Certificate for Registered Emitters or Users of Fuel) to the registered distributor at the time of delivery. The registered distributor is able to confirm that the delivery is subject to the exemption and is not required to report or pay the fuel charge on its return for those deliveries.
The registered emitter later removes/diverts 100 litres of the light fuel oil from its covered facility in the listed province. As the fuel is no longer for use at the person’s covered facility and being used for exempt purposes, the registered emitter reports and pays an amount of fuel charge to the CRA for the quantity of fuel that was removed/diverted from the covered facility.
Three months later, the registered emitter determines that it had erroneously reported and paid the fuel charge on 300 litres of fuel, instead of the 100 litres removed/diverted from its covered facility. The registered emitter files a single application in respect of the matter using Form B403 within the applicable two-year time period and none of the specified restrictions in subsection 49(3), section 50 or section 51 of the Act apply.
The registered emitter is eligible for a rebate under section 49 for the amount of fuel charge reported and paid on the extra 200 litres reported.
Example 3
A registered distributor delivers 500 litres of gasoline and 500 litres of light fuel oil (diesel) to an eligible farmer at their farm. The fuel charge is not applied because the farmer provided their exemption certificate (Form L402, Fuel Charge Exemption Certificate for Farmers) to the registered distributor prior to the time of delivery. The registered distributor is able to confirm that the delivery is subject to the exemption and is not required to report or pay the fuel charge on its return for those deliveries.
The farmer diverts 200 litres each of the gasoline and light fuel oil from their intended eligible farming activities. Using Form B401, Fuel Charge Return for Non-registrants under the Greenhouse Gas Pollution Pricing Act, and related Form B401-1 Fuel Charge Return Schedule for Non-registrants under the Greenhouse Gas Pollution Pricing Act, the farmer reports and pays an amount of fuel charge to the CRA to take into account the quantity of fuel not eligible for fuel charge relief. However, the farmer erroneously reports and pays the fuel charge based on 300 litres of gasoline and 250 litres of light fuel oil.
Three months later, the farmer realizes that they erroneously reported and paid an excess fuel charge amount on 100 litres of gasoline and 50 litres of light fuel oil. The farmer files a single application in respect of the matter using Form B403 within the applicable two-year time period and none of the specified restrictions in subsection 49(3), section 50 or section 51 of the Act apply.
The farmer is eligible for a rebate under section 49 for the amount of fuel charge reported and paid on the extra 100 litres of gasoline and the extra 50 litres of light fuel oil.
Example 4
A registered distributor delivers 500 litres of gasoline to a non-registrant retailer in a listed province. The fuel charge applies to this delivery as no exemption certificate was provided. The registered distributor reports and pays an amount of fuel charge to the CRA based on 600 litres of gasoline being delivered.
Three years later, the registered distributor determines that it reported 100 litres of gasoline in error and made an overpayment.
The registered distributor is not eligible for a rebate under section 49 for the excess amount of fuel charge reported and paid, as the statutory two-year time limit has passed.
Ineligibility for the rebate
Section 49 does not apply to transactions where registrants or non-registrants (customers) have paid an embedded charge to a fuel charge registrant (supplier). These are indirect payments of the charge that form part of the cost base of the fuel involved. Only persons that have reported and paid an amount to the CRA are entitled to apply for a rebate under section 49.
Any questions regarding embedded charges are a matter between the supplier and its customers.
Example 5
A registered distributor delivers fuel to a fisher who is eligible for relief through the use of an exemption certificate (Form L403, Fuel Charge Exemption Certificate for Fishers). The fisher fails to provide its completed exemption certificate to the registered distributor at, or prior to, the time of delivery of the fuel. As a result, the registered distributor reports and pays a charge under subsection 17(1) for deliveries made where an exemption certificate does not apply. The fuel charge is included as part of the costs of the fuel delivered to the fisher.
A year after the fuel was delivered, the fisher provides a completed exemption certificate to the registered distributor and completes and submits an application for a rebate of the fuel charge under section 49 of the Act.
The fisher did not report or pay a fuel charge amount to the CRA and would not be eligible to apply for a rebate under section 49.
Example 6
A registered distributor delivers aviation gasoline to a registered specified air carrier who is eligible for relief through the use of an exemption certificate (Form L401-2, Fuel Charge Exemption Certificate for Registered Specified Carriers). The carrier fails to provide its completed exemption certificate to the registered distributor at, or prior to, the time of delivery of the fuel. As a result, the registered distributor reports and pays a charge under subsection 17(1) for deliveries made where an exemption certificate does not apply. The fuel charge is included as part of the costs of the fuel delivered to the carrier.
The registered specified air carrier provides a completed exemption certificate to the registered distributor five months after the fuel was delivered and completes and submits an application for a rebate of the fuel charge under section 49 of the Act.
The registered specified air carrier is not eligible for a rebate under section 49 as the exemption certificate was not provided at, or prior to, the time of delivery.
Applying for the rebate
A person that has overpaid a fuel charge to the CRA should mail Form B403 to the Sudbury Tax Centre at the following address:
Sudbury Tax Centre
Fuel Charge Program
Post Office Box 20000 Station A
Sudbury ON P3A 5C1
Alternatively, the person can submit this form electronically by using the “Submit documents” function in My Business Account. They should not enclose receipts or other supporting documents with their application but should keep those documents for future review. The CRA may request and review any information it deems necessary to determine whether the person is eligible for the rebate.
Persons with questions regarding the status of their rebate applications can call the Sudbury Tax Centre at 1-877-432-5472.
Further information
For all technical publications related to the Greenhouse Gas Pollution Pricing Act and its regulations, go to Fuel charge technical information.
To make a technical enquiry on the fuel charge or for additional information on the application of the fuel charge for each type of registration, go to Contact Information – Excise Duties, Excise Taxes, Fuel Charge and Air Travellers Security Charge.
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