Section 354.1 — Excise Tax Act: Specified motor vehicle leases

If a supply of a specified motor vehicle is made by way of lease, licence or similar arrangement for a lease interval (within the meaning of subsection 136.1(1)) under an agreement entered into before the implementation date for a participating province, used tangible personal property, or a leasehold interest in such property, (in this section referred to as the “trade-in”) is accepted by the supplier as full or partial consideration for the supply, the retail sales tax of the province would have been payable by the recipient in respect of that lease interval had the trade-in not been accepted and that tax not been suspended or repealed concurrent with the application to that supply of subsection 165(2) or 218.1(1), as the case may be, and the value of the consideration for the supply as otherwise determined under this Part exceeds the amount (in this section referred to as the “adjusted value”) that is the value, excluding the amount of any tax under this Part in respect of the supply, on which that retail sales tax in respect of that lease interval would have been calculated but for the suspension or repeal of that tax, for the purposes of subsection 165(2) or 218.1(1), as the case may be, the value of the consideration for the supply is deemed to be equal to the adjusted value.