Excise Act, 2001 (S.C. 2002, c. 22)

Marginal note:Imposition — bulk wine taken for use

• 134 (1) Duty is imposed on bulk wine that is taken for use at the rates set out in Schedule 6.

• Marginal note:Payable by responsible person

  (2) Subject to sections 144 to 146, the duty is payable at the time the wine is taken for use and is payable by the person who is responsible for the wine at that time.

• Marginal note:Exception

  (3) Subsection (1) does not apply to wine

  • (a) that is produced by an individual for their personal use and that is consumed in the course of that use; or

  • (b) that is produced in Canada from honey or apples and composed wholly of agricultural or plant product grown in Canada.

Marginal note:Imposition — wine packaged in Canada

• 135 (1) Duty is imposed on wine that is packaged in Canada at the rates set out in Schedule 6.

• Marginal note:Wine produced for personal use and by small producers

  (2) Subsection (1) does not apply to wine that is

  • (a) produced in Canada from honey or apples and composed wholly of agricultural or plant product grown in Canada;

  • (a.1) produced and packaged by an individual for their personal use; or

  • (b) produced by a wine licensee and packaged by or on behalf of the licensee during a fiscal month in a particular fiscal year of the licensee if

    • (i) the total sales by the licensee of products that are subject to duty under subsection (1), or that would have been so subject to duty in the absence of this subsection, in the fiscal year ending immediately before the particular fiscal year did not exceed $50,000, and

    • (ii) the total sales by the licensee of those products during the particular fiscal year before the fiscal month did not exceed $50,000.

• Marginal note:Time of imposition

  (3) The duty is imposed at the time the wine is packaged. It is also payable at that time unless the wine is entered into an excise warehouse immediately after packaging.

• Marginal note:Payable by responsible person

  (4) The duty is payable by the person who is responsible for the wine immediately before it is packaged.

• Marginal note:Wine licensee ceases to be liable for duty

  (5) If an excise warehouse licensee becomes liable under section 140 for duty on the wine, the person required under subsection (4) to pay the duty ceases to be liable to pay it.

Marginal note:Definitions

• 135.1 (1) The following definitions apply in this section.

  inflationary adjusted year

  inflationary adjusted year means 2018 and every year after that year. (année inflationniste)

  reference year

  reference year means a 12-month period that begins on April 1 of a year and ends on March 31 of the following year. (année de référence)

• Marginal note:Annual adjustments

  (2) Each rate of duty set out in Schedule 6 applicable in respect of a litre of wine is to be adjusted on April 1 of an inflationary adjusted year so that the rate is equal to the greater of

  • (a) the rate determined by the formula

    A × B

    where

    A

    is the rate of duty applicable to the litre on March 31 of the inflationary adjusted year, and

    B

    is the amount, rounded to the nearest one-thousandth, or, if the amount is equidistant from two consecutive one-thousandths, rounded to the higher one-thousandth, determined by the formula

    C/D

    where

    C

    is the Consumer Price Index for the 12-month period ending on September 30 of the particular year preceding the inflationary adjusted year, and

    D

    is the Consumer Price Index for the 12-month period ending on September 30 of the year preceding the particular year, and

  • (b) the rate of duty referred to in the description of A in paragraph (a).

• Marginal note:Adjustment — 2023

  (2.1) In respect of the inflationary adjusted year that is 2023, the description of B in paragraph (2)(a) is deemed to be equal to 1.02.

• Marginal note:Adjustment — 2024

  (2.2) In respect of the inflationary adjusted year that is 2024, the description of B in paragraph (2)(a) is deemed to be equal to 1.02.

• Marginal note:Adjustment — 2025

  (2.3) In respect of the inflationary adjusted year that is 2025, if the amount determined for B in paragraph (2)(a) without reference to this subsection is greater than 1.02, the description of B in that paragraph is deemed to be equal to 1.02.

• Marginal note:Rounding

  (3) The adjusted rate determined under subsection (2) is to be rounded to the nearest one-thousandth or, if the adjusted rate is equidistant from two consecutive one-thousandths, to the higher one-thousandth.

• Marginal note:Consumer Price Index

  (4) In this section, the Consumer Price Index for any 12-month period is the result arrived at by

  • (a) aggregating the Consumer Price Index for Canada, as published by Statistics Canada under the authority of the Statistics Act, for each month in that period;

  • (b) dividing the aggregate obtained under paragraph (a) by 12; and

  • (c) rounding the result obtained under paragraph (b) to the nearest one-thousandth or, if the result obtained is equidistant from two consecutive one-thousandths, to the higher one-thousandth.

• Marginal note:Application of adjusted rate

  (5) If duties on wine are imposed in a reference year but become payable in another reference year that begins in an inflationary adjusted year, those duties are determined at the rate of duty as adjusted under subsection (2) on the first day of the other reference year.

Marginal note:Duty payable on removal from warehouse

• 136 (1) Subject to subsection (2), if packaged wine is removed from an excise warehouse for entry into the duty-paid market, duty is payable on the wine at the time of its removal and is payable by the excise warehouse licensee.

• Marginal note:Removals for consignment sales

  (2) If a small wine licensee removes packaged wine that the licensee produced or packaged from the excise warehouse of the licensee for delivery and sale on a consignment basis at a retail store operated on behalf of two or more small wine licensees and that is not located on the premises of a wine licensee, the wine is deemed to be removed from the warehouse for entry into the duty-paid market at the time the wine is sold.

• Meaning of small wine licensee

  (3) In this section, a wine licensee is a small wine licensee during a fiscal year of the licensee if, in the previous fiscal year, the total amount of wine sold by the licensee did not exceed 60,000 litres.

Marginal note:Duty payable on packaged wine taken for use

137 Subject to sections 144 to 146, if non-duty-paid packaged wine that is in the possession of an excise warehouse licensee or a licensed user is taken for use, duty is payable on the wine at the time it is taken for use and is payable by the licensee or user.

Marginal note:Duty payable on unaccounted packaged wine

• 138 (1) Duty is payable on non-duty-paid packaged wine that has been received by an excise warehouse licensee or a licensed user but that cannot be accounted for by the licensee or user

  • (a) as being in the excise warehouse of the licensee or the specified premises of the user;

  • (a.1) in the case of packaged wine described by subsection 136(2), as being in a store described by that subsection;

  • (b) as having been removed, used or destroyed in accordance with this Act; or

  • (c) as having been lost in prescribed circumstances, if the licensee or user fulfills any prescribed conditions.

• Marginal note:When duty payable

  (2) Duty is payable by the licensee or user at the time the wine cannot be accounted for.

Marginal note:Duty on wine in marked special container relieved

• 139 (1) Duty imposed under subsection 135(1) is relieved on wine that is contained in a marked special container of wine from which the marking has been removed in accordance with section 156.

• Marginal note:Duty on returned wine relieved

  (2) Duty imposed under subsection 135(1) or levied under subsection 21.2(2) of the Customs Tariff is relieved on wine that is returned to the bulk wine inventory of a wine licensee in accordance with section 157.

Liability of Excise Warehouse Licensees and Licensed Users

Marginal note:Non-duty-paid packaged alcohol

140 If non-duty-paid packaged alcohol is entered into an excise warehouse immediately after being packaged, the excise warehouse licensee is liable for the duty on the alcohol at the time it is entered into the warehouse.

Marginal note:Imported packaged alcohol

141 If, in accordance with subsection 21.2(3) of the Customs Tariff, imported packaged alcohol is, without the payment of duty, released under the Customs Act to the excise warehouse licensee or licensed user who imported it, the excise warehouse licensee or licensed user is liable for the duty on the alcohol.

Marginal note:Transfer between warehouse licensees

• 142 (1) If non-duty-paid packaged alcohol is removed from the excise warehouse of an excise warehouse licensee (in this subsection referred to as the “transferor”) to the excise warehouse of another excise warehouse licensee, at the time the alcohol is entered into the warehouse of the other licensee,

  • (a) the other licensee becomes liable for the duty on the alcohol; and

  • (b) the transferor ceases to be liable for the duty.

• Marginal note:Transfer to licensed user

  (2) If non-duty-paid packaged alcohol is removed from an excise warehouse to the specified premises of a licensed user, at the time the alcohol is entered into those premises,

  • (a) the licensed user becomes liable for the duty on the alcohol; and

  • (b) the excise warehouse licensee ceases to be liable for the duty.

• Marginal note:Transfer from licensed user

  (3) If non-duty-paid packaged alcohol is removed from the specified premises of a licensed user to an excise warehouse, at the time the alcohol is entered into the warehouse,

  • (a) the excise warehouse licensee becomes liable for the duty on the alcohol; and

  • (b) the licensed user ceases to be liable for the duty.

Non-dutiable Uses and Removals of Alcohol

Marginal note:Approved formulations

143 The Minister may impose any conditions or restrictions that the Minister considers necessary in respect of the making, importation, packaging, use or sale of, or other dealing with, an approved formulation.

Marginal note:Non-dutiable uses — approved formulations

144 Duty is relieved on bulk alcohol and non-duty-paid packaged alcohol used by a licensed user in an approved formulation.

Marginal note:Duty not payable — bulk alcohol

• 145 (1) Duty is not payable on bulk alcohol

  • (a) taken for analysis by an alcohol licensee or a licensed user in a manner approved by the Minister;

  • (b) destroyed by an alcohol licensee or a licensed user in a manner approved by the Minister; or

  • (c) used by a licensed user in a process in which the absolute ethyl alcohol is destroyed to the extent approved by the Minister.

• Marginal note:Duty not payable — packaged alcohol

  (2) Duty is not payable on non-duty-paid packaged alcohol

  • (a) taken for analysis by an excise warehouse licensee or a licensed user in a manner approved by the Minister;

  • (b) destroyed by an excise warehouse licensee or a licensed user in a manner approved by the Minister;

  • (c) used by a licensed user in a process in which the absolute ethyl alcohol is destroyed to the extent approved by the Minister; or

  • (d) in the case of wine, taken for use by an excise warehouse licensee if that licensee is also the wine licensee who produced or packaged the wine and the wine is provided free of charge to individuals for consumption as a sample at the premises where the licensee produces or packages wine.

• Marginal note:No duty payable — alcohol taken for analysis or destroyed

  (3) Duty is not payable on bulk alcohol or non-duty-paid packaged alcohol that is taken for analysis or destroyed by the Minister.

Marginal note:Duty not payable — vinegar

• 146 (1) Duty is not payable on alcohol that is used by a licensed user to produce vinegar if not less than 0.5 kg of acetic acid is produced from every litre of absolute ethyl alcohol used.

• Marginal note:Deemed taken for use if deficiency

  (2) If a licensed user uses alcohol to produce vinegar and less than 0.5 kg of acetic acid is produced from every litre of absolute ethyl alcohol used, the licensed user is deemed to have taken for use, at the time the vinegar is produced, the number of litres of that alcohol that is equivalent to the number determined by the formula

  A - (2 × B)

  where

  A

  is the number of litres of absolute ethyl alcohol used, and

  B

  is the number of kilograms of acetic acid produced.

Marginal note:Duty not payable — packaged alcohol

• 147 (1) Duty is not payable on non-duty-paid packaged alcohol, other than alcohol contained in a marked special container, that is removed from an excise warehouse

  • (a) for delivery

    • (i) to an accredited representative for their personal or official use,

    • (ii) to a duty free shop for sale in accordance with the Customs Act,

    • (iii) to a registered user for use in accordance with their registration, or

    • (iv) as ships’ stores in accordance with the Ships’ Stores Regulations; or

  • (b) for export by the excise warehouse licensee in accordance with this Act.

• Marginal note:Duty not payable — special container of spirits

  (2) Duty is not payable on spirits contained in a marked special container that is removed from an excise warehouse

  • (a) for delivery to a registered user for use in accordance with their registration, if the container is marked for delivery to and use by a registered user; or

  • (b) for export by the excise warehouse licensee in accordance with this Act, if the container was imported.

• Marginal note:Duty not payable — special container of wine

  (3) Duty is not payable on wine imported in a marked special container that is removed from an excise warehouse for export by the excise warehouse licensee in accordance with this Act.

• Marginal note:Duty not payable — wine samples

  (4) Duty is not payable on non-duty-paid packaged wine, other than wine contained in a marked special container, that is removed from the excise warehouse of the wine licensee who produced or packaged the wine if the wine is to be provided free of charge to individuals as a sample consumed at the premises where the licensee produces or packages wine.