Overview

Effective July 1, 2022, until December 31, 2024, the gasoline tax rate on unleaded gasoline will decrease from 14.7 cents per litre to 9.0 cents per litre and the fuel tax rate on clear diesel (including blended), clear kerosene and biodiesel will decrease from 14.3 cents per litre to 9.0 cents per litre. 

The Ministry of Finance has developed a process to credit retailers, wholesalers, collectors and importers who have inventories of gasoline and/or fuel for which tax was pre-paid at the higher tax rates.

Retailers, wholesalers and importers who hold inventory purchased at the higher rate will be required to record inventory amounts of all eligible product at 12:01 a.m., on July 1, 2022, complete an inventory report and submit this report to their suppliers as soon as possible.

Suppliers will issue credits to accounts based on inventory reported. Collectors will take a tax credit from the ministry for credits provided to their dealers.

Collectors do not need to complete an inventory report at the time of the tax rate change because collectors hold untaxed inventories.

Preparing for the tax rate change

Ensure that the lower tax rate will be in effect in your systems from the beginning of July 1, 2022, until the end of December 31, 2024. 

Before the tax rate change, communicate with your dealers if you:

Fuel and Gasoline Products Inventory Report

Dealers will use the ministry’s Fuel and Gasoline Products Inventory Report unless you provide them your own inventory report.

If you create your own inventory report, include the following information: 

  • The dealer’s:
    • legal Name
    • business address
    • business number
    • supplier’s name
  • A description and quantity of tax-paid products on hand at the time of the tax rate decrease
  • The tax rate difference for each of those products (5.7 cents for gasoline and 5.3 cents for fuel) 
  • The tax credit owed for each product  
  • The total tax credit claimed 
  • Certification as displayed on the ministry’s Fuel and Gasoline Products Inventory Report form 
  • A space for a signature, as well as the signatory’s printed name. Electronic signatures are acceptable. 

You may accept inventory reports electronically. 

If you have not received all the inventory reports from your dealers by October 31, 2022, you should contact the ministry at 1-866-668-8297 ext. 16011 for assistance. 

Corporately owned stores

If you have corporately owned stores that hold tax included inventory you can consolidate your inventory from multiple locations on one inventory report and include this credit on Line 14 of the Generic return. Please include an explanation of this tax credit on your schedule detailing Line 14 adjustment(s). 

Consignment

If you provide product to retailers or wholesalers on a consignment basis and no tax has been pre-paid, you do NOT need to report this inventory. This product, when sold to end users, will reflect the decreased rate on July 1, 2022.

Tax paid product

If you purchased tax paid products you can account for them as usual using line 11 and 14 of the Generic return. Please refer to the Guide for Completing the Generic Fuel Collector for Gasoline, Diesel and Related Products for details.

Fuel and Gasoline Products Summary Report

In some cases, there may be commercial sensitivity around sharing inventory reports.

Dealers can consolidate information from inventory reports onto a Fuel and Gasoline Products Summary Report.

Crediting your dealers’ accounts

Receive inventory reports and summary reports from your dealers and apply credits to their accounts for their next purchase of gasoline or fuel products.

Reject any inventory reports from customers who you know are end users.

If you are unable to process a request from any of your dealers, you should inform them of the reason why and ask them to contact the ministry at 1-866-668-8297 ext. 16011 for assistance. 

Reporting requirements

Generic Collector Summary for Gasoline and Related Products, for gasoline tax collectors

You can include tax credits you have given to dealers each month, between July 2022 and October 2022. Claim the credit on Line 14 of the Generic return. Please include an explanation of this tax credit on your schedule detailing Line 14 adjustment(s).

Consolidate the Tax Credit (Column C) by product type for all the Fuel and Gasoline Products Inventory Report(s) you receive and the Tax Credit (Column B) by product type for all the Fuel and Gasoline Products Summary Report(s) you receive. 

All Inventory reports can be consolidated, and one single credit amount by product type, can be reported on the Generic Collector Summary Line 14 – Adjustments and/or Tax Credits on the Generic Collector Summary for Diesel and Related Products. 

Generic Collector Summary for Diesel and Related Products, for fuel tax collectors

You can include tax credits you have given to dealers each month, between July 2022 and October 2022. Claim the credit on Line 14 of the Generic return. Please include an explanation of this tax credit on your schedule detailing Line 14 adjustment(s).

Consolidate the Tax Credit (Column C) by product type for all the Fuel and Gasoline Products Inventory Report(s) you receive and the Tax Credit (Column B) by product type for all the Fuel and Gasoline Products Summary Report(s) you receive. 

All Inventory reports can be consolidated, and one single credit amount by product type, can be reported on the Generic Collector Summary Line 14 – Adjustments and/or Tax Credits on the Generic Collector Summary for Diesel and Related Products.

Audit and compliance

The ministry recognizes that the model chosen to help deliver credits requires the participation of designated collectors. Where errors are subsequently uncovered on any inventory reports received, the ministry will follow up with those dealers directly.

Record keeping

You must keep a copy of your Fuel and Gasoline Products Inventory Report (if applicable) and documentation in support of the report for seven years.

You must also keep a copy of all Fuel and Gasoline Products Inventory Report(s) or Fuel and Gasoline Products Summary Report(s) you received from your dealers for a period of seven years. 

If you would like to send copies of all Fuel and Gasoline Products Inventory Report(s) and Fuel and Gasoline Product Summary Reports to the ministry, contact us at 1-866-668-8297 ext. 16011.

HST guidance from the Canada Revenue Agency

If a registered supplier refunds an amount to a registered retailer or distributor (for example, the customer) the supplier has the option to refund or not refund the Harmonized Sales Tax (HST).

If a supplier refunds the gasoline and fuel tax including the HST to the customer, the supplier will be required to provide a credit note to the customer or the customer may issue a debit note to the supplier for the HST. The supplier will be able to deduct the amount of the HST paid to the customer when calculating its net tax for the period when the credit/debit note was issued.  The customer is required to add the amount of HST adjusted, refunded or credited when determining its net tax for the reporting period in which the credit/debit note was issued.

If the registered supplier does not refund the HST to the customer when the gasoline and fuel tax is refunded, then there are no HST consequences.  Specifically, as the customer was entitled to claim an input tax credit (for example, customer was allowed to claim a credit on their GST/HST return) for the amount initially paid for the gasoline/fuel, this means that the gasoline or fuel held as inventory by the customer would not have imbedded HST. Therefore, there is no need to refund or credit the HST when the gasoline and fuel tax is refunded.

For more information about HST please contact the Canada Revenue Agency at 1-800-959-8287.

Contact us

For any questions regarding this program, please contact us:

Stay connected

For up-to-date information on changes about the gasoline and fuel tax programs please subscribe to the Ministry of Finance’s email alert service.

Definitions

Collector:
a person designated as a collector under the Gasoline Tax Act and/or Fuel Tax Act.
Dealer:
a person who purchases gasoline or fuel for resale. This could be either a retailer or wholesaler as set out in the glossary.
End user:
a person who purchases gasoline or fuel for their own use; they do not re-sell the product.
Eligible product:
gasoline or fuel for which an amount on account of tax has been pre-paid prior to the temporary tax decrease that will begin on July 1, 2022.
Fuel:
diesel, blended diesel, clear kerosene and biodiesel.
Gasoline:
unleaded gasoline and ethanol blended gasoline.
Importer:
a person who brings or causes to be brought into Ontario fuel or gasoline in bulk.
Retailer:
a person who purchases gasoline or fuel to sell to end users.
Supplier:
a person who sells gasoline or fuel to a wholesaler or retailer. This could be either a wholesaler or collector as set out in this glossary.
Wholesaler:
a person who purchases gasoline or fuel to sell for resale. Wholesalers may or may not be a designated collector. If the person is not a designated collector, all the person’s purchases of gasoline and/or fuel products include an amount equal to the tax for the purpose of resale.