TransCanada’s BC System GST Practices are Changing

TransCanada's BC System GST Practices are Changing

TransCanada is implementing a few minor changes to its Goods & Services Tax (GST) practices on the BC System.

Background – Excise Tax Act

Pursuant to the Excise Tax Act all Canadian natural gas transporters are required to invoice GST on all services. GST for transportation of gas that is consumed in Canada is set at 7%. GST for transportation of gas for that is consumed in the United States may qualify for zero-rating (0% GST).

Background – Current BC System GST Practices

GST status (7% or zero-rating) is determined by your contract and nomination. All demand charges for FS-1 and STFS-1 service are currently zero rated. Commodity charges for IT-1 services are zero rated for deliveries to Kingsgate and charged 7% GST for deliveries to BC delivery points or the Alberta/BC Border.

Changes

Effective November 1, 2005, TransCanada will make the following three changes to its GST practices:

i) Shippers who wish to zero-rate unutilized Demand Charges under a firm, or Commodity Charges under an interruptible, export transportation contract will be required to execute a one-time Declaration that the contract is eligible for zero-rating. TransCanada will mail you a Declaration form during the first week of October. This Declaration will also be imbedded in the pro forma Temporary Assignment form posted on TransCanada's website.

ii) 7% GST will be charged on all Demand Charges associated with ‘backhauls' on FS-1 and STFS-1.

iii) 7% GST will be charged on all demand charges related to gas delivered to BC delivery points or the Alberta/BC Border.

How to Obtain Further Information?

Questions regarding GST ‘declarations':

contact Sherry Hill @ 403-920-2619

or Billie Irving @ 403-920-5092

General GST questions:

Pat Blixt @ 403-920-5547

or Pipe Line @ 403-920-PIPE (7473)

or Toll Free @ 1-877-920-PIPE (7473)