ARTICLE · 23 JULY 2026

Stored Aviation Fuel Sales – GST Liability

Millar Kreklewetz

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The Canada Revenue Agency maintains that aviation fuel delivered into airport storage tanks rather than directly into aircraft is subject to GST/HST, creating significant tax risks for fuel suppliers and airlines.

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Robert Kreklewetz

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A longstanding GST/HST issue in the aviation industry has been whether aviation fuel purchased for use on international commercial flights remains zero-rated when it is delivered into airport storage tanks or “fuel farms”, rather than directly “into the wing” of an aircraft. In recent roundtable discussions with the Canada Revenue Agency (“CRA”), the Agency maintained its position that fuel delivered into storage tanks is taxable because of the risk of diversion to other uses.

This report reviews how the CRA position appears to have become a live audit issue for fuel suppliers and airlines and how retroactive GST/HST billing can raise complicated input tax credit (“ITC”) issues.

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