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Excise Tax Act (R.S.C., 1985, c. E-15)

Full Document:  

Act current to 2021-04-05 and last amended on 2020-07-01. Previous Versions

PART IXGoods and Services Tax (continued)

DIVISION VCollection and Remittance of Division II Tax (continued)

SUBDIVISION BRemittance of Tax (continued)

Marginal note:Definitions

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

    applicable legislated amount

    applicable legislated amount in a province for a returnable container of a particular class means

    • (a) except if paragraph (b) applies, the legislated consumers’ refund in the province for a returnable container of that class; or

    • (b) if, under an Act of the legislature of the province in respect of recycling, a legislated consumers’ refund for a returnable container of that class is specified and another amount (in this paragraph referred to as the “recycler’s reimbursement”) is specified as the amount to be paid, otherwise than specifically in respect of the handling of the container, for a used and empty returnable container of that class when supplied by a person who, on acquiring it used and empty, paid an amount as the legislated consumers’ refund for the container, but no amount is specified as the amount, or the minimum amount, to be charged by a distributor in respect of the supply of a filled and sealed returnable container of that class, the recycler’s reimbursement. (montant obligatoire applicable)

    consumers’ recycler

    consumers’ recycler, in respect of a returnable container of a particular class in a province, means a person who, in the ordinary course of their business, acquires in the province used and empty returnable containers of that class from consumers for consideration. (récupérateur)

    distributor

    distributor of a returnable container of a particular class in a province means a person who supplies beverages in filled and sealed returnable containers of that class in the province and charges a returnable container charge in respect of the returnable containers. (distributeur)

    legislated consumers’ refund

    legislated consumers’ refund in a province for a returnable container of a particular class means the amount, or the minimum amount, that, under an Act of the legislature of the province in respect of recycling, must be paid in certain circumstances for a used and empty returnable container of that class to a person of a class that includes consumers. (remboursement obligatoire aux consomma­teurs)

    recycler

    recycler of returnable containers of a particular class in a province means

    • (a) a person who, in the ordinary course of their business, acquires used and empty returnable containers of that class (or the material resulting from their compaction) in the province for consideration; or

    • (b) a person who, in the ordinary course of their business, pays consideration to a person referred to in paragraph (a) in compensation for that person acquiring used and empty returnable containers of that class and paying consideration for those containers. (recycleur)

    recycling

    recycling, in respect of a province, means

    • (a) the return, redemption, reuse, destruction or disposal of

      • (i) returnable containers in the province, or

      • (ii) returnable containers in the province and other goods; or

    • (b) the control or prevention of waste or the protection of the environment. (recyclage)

    refund

    refund, at any time in a province, means

    • (a) in relation to a returnable container of a particular class that is supplied used and empty, or that is filled with a beverage that is supplied, at that time in the province,

      • (i) the greatest of

        • (A) if there is an applicable legislated amount in the province for returnable containers of that class, that amount,

        • (B) if the supplier is a consumers’ recycler who, in the ordinary course of their business, sells the beverage in returnable containers of that class in the province and the usual returnable container charge that is charged by the supplier when so selling the beverage is not less than the amount (in this clause referred to as the “usual refund”) that is, at that time, the usual consideration that the supplier pays for supplies in the province of used and empty returnable containers of that class from consumers, the usual refund,

        • (C) if the supplier is a consumers’ recycler who does not, in the ordinary course of their business, sell the beverage in returnable containers of that class in the province, the amount that is, at that time, the usual consideration that the supplier pays for supplies in the province of used and empty returnable containers of that class from consumers, and

        • (D) if, at that time,

          • (I) in accordance with established industry practice, suppliers charge a common amount as the usual returnable container charge when selling the beverage in returnable containers of that class in the province, and

          • (II) it is not exceptional for the usual amount paid to consumers by consumers’ recyclers as consideration for supplies in the province of used and empty returnable containers of that class to vary among consumers’ recyclers,

          the greatest of those usual amounts paid to consumers not exceeding the usual returnable container charge, and

      • (ii) if none of clauses (i)(A) to (D) applies, the portion of the amount that is, at that time, the consideration paid, in the greatest number of cases, by consumers’ recyclers for supplies in the province of used and empty returnable containers of that class from consumers that does not exceed the amount that is, at that time, the returnable container charge charged in the greatest number of cases by suppliers when selling the beverage in returnable containers of that class in the province; and

    • (b) in relation to a returnable container of a particular class in respect of which a supply is made at that time in the province of a service to which subsection (7) applies,

      • (i) if the supplier is a consumers’ recycler, the amount that is, at that time, the usual consideration that the supplier pays for supplies in the province of used and empty returnable containers of that class from consumers, and

      • (ii) in any other case, the amount that is, at that time, the consideration paid, in the greatest number of cases, by consumers’ recyclers for supplies in the province of used and empty returnable containers of that class from consumers. (montant remboursé)

    returnable container

    returnable container in a province means a beverage container of a class of containers that

    • (a) are ordinarily acquired by consumers;

    • (b) when acquired by consumers, are ordinarily filled and sealed; and

    • (c) are ordinarily supplied in the province used and empty by consumers for consideration. (contenant consigné)

    returnable container charge

    returnable container charge, at any time, means

    • (a) in relation to a returnable container of a particular class containing a beverage that is supplied at that time in a province, the total of all amounts, each of which is charged by the supplier

      • (i) as an amount in respect of recycling in the province,

      • (ii) for the purpose of recovering an amount equivalent to the amount referred to in subparagraph (i) that was charged to the supplier, or

      • (iii) for the purpose of recovering an amount equivalent to the amount that was charged to the supplier by another supplier for the purpose referred to in subparagraph (ii) or for the purpose referred to in this subparagraph;

    • (b) in relation to a filled and sealed returnable container containing a beverage that is held by a person at that time for consumption, use or supply in a province,

      • (i) if the beverage is held at that time by the person for the purpose of making a supply in the province of the beverage in the container, the amount that the person can reasonably expect will be determined under paragraph (a) in respect of the container when the beverage is so supplied, and

      • (ii) in any other case, the amount in respect of the container that would reasonably be expected to be determined under paragraph (a) if the beverage were supplied at that time to the person in the province; and

    • (c) in relation to a returnable container of a particular class in respect of which a recycler of returnable containers of that class makes at that time a supply in a province of a service in respect of recycling to a distributor, or a recycler, of returnable containers of that class,

      • (i) if an Act of the legislature of the province in respect of recycling specifies an amount, or a minimum amount, that must be collected from, or paid by, a recipient in certain circumstances for the supply of a beverage in a returnable container of that class, that amount, and

      • (ii) in any other case, the amount in respect of the container that would reasonably be expected to be determined under paragraph (a) if the container were filled and sealed and contained a beverage that was being supplied at that time in the province. (droit sur contenant consigné)

    specified beverage retailer

    specified beverage retailer, in respect of a returnable container of a particular class, means a registrant

    • (a) who, in the ordinary course of the registrant’s business, makes supplies (in this definition referred to as specified supplies) of beverages in returnable containers of that class to consumers in circumstances in which the registrant typically does not unseal the containers; and

    • (b) whose circumstance is not that all or substantially all of the supplies of used and empty returnable containers of that class that are gathered by the registrant at establishments at which the registrant makes specified supplies are of containers that the registrant acquired used and empty for consideration. (vendeur au détail déterminé)

  • Marginal note:Taxable supply of beverage in returnable container

    (2) Subject to subsection (3), for the purposes of this Part, if a supplier makes a particular taxable supply (other than a zero-rated supply) in a province of a beverage in a filled and sealed returnable container of a particular class in circumstances in which the supplier typically does not unseal the container, and the supplier charges the recipient a returnable container charge in respect of the container,

    • (a) the consideration for the particular supply is deemed to be equal to the amount determined by the formula

      A - B

      where

      A
      is the consideration for the particular supply as otherwise determined for the purposes of this Part, and
      B
      is the returnable container charge;
    • (b) if the returnable container charge exceeds the refund for the container, the supplier is deemed to have made to the recipient, at the time at which the consideration for the particular supply becomes due or would, in the absence of section 156, have become due, a taxable supply in the province of a service in respect of the container for consideration, separate from the consideration for the beverage, that becomes due at that time and that is, subject to that section, equal to

      • (i) except if subparagraph (ii) applies, the amount by which the returnable container charge exceeds the refund for the container, or

      • (ii) if an Act of the legislature of the province is prescribed for the purposes of this paragraph,

        • (A) if that province is a participating province and that Act, or regulations made under it, specify an amount in respect of a returnable container of that class that must be equal to or not less than the total (in this clause referred to as the “tax-included charge”) of the returnable container charge to be charged in respect of the particular supply or a previous supply of the beverage in the container and any applicable tax under this Part, the amount determined by the formula

          A × [100/(100 + B)]

          where

          A
          is the amount by which the tax-included charge exceeds the refund for the container, and
          B
          is the total of the rate of tax under subsection 165(1) and the tax rate for the province, and
        • (B) in any other case, the amount determined in prescribed manner; and

    • (c) the recipient is deemed to have acquired that service for the same purpose as that for which the recipient acquired the beverage.

  • Marginal note:Exception for specified beverage retailer

    (3) Subsection (2) does not apply to a supply by a registrant of a beverage in a returnable container in respect of which the registrant is a specified beverage retailer if the registrant elects not to deduct the amount of the returnable container charge in respect of the container in determining the consideration for the supply for the purposes of this Part.

  • Marginal note:Supply of used container

    (4) If a person makes a particular supply in a province of a used and empty returnable container (or the material resulting from its compaction),

    • (a) the value of the consideration for the particular supply is deemed, for the purposes of this Part other than this section, to be nil; and

    • (b) if the consideration exceeds the refund for the container, the supplier is deemed, for the purposes of this Part, to have made to the recipient, at the time at which the consideration for the particular supply becomes due or would, in the absence of section 156, have become due, a taxable supply in the province of a service in respect of the container for consideration, that is separate from the consideration for the particular supply, equal to the excess amount.

  • Marginal note:Exception

    (5) Subsection (4) does not apply

    • (a) for the purposes of section 5 of Part V.1 of Schedule V or section 10 of Part VI of that Schedule; or

    • (b) to a supply made in a province of a used and empty returnable container of a particular class (or the material resulting from its compaction) if the usual business practice of the recipient is to pay consideration for supplies in the province of used and empty returnable containers of that class (or the material resulting from their compaction) that is determined based on the value of the material from which the containers are made or is otherwise determined based neither on the amount of the refund for the returnable containers nor on the amount of the returnable container charge in respect of filled and sealed returnable containers of that class containing beverages that are supplied in the province.

  • Marginal note:Supply of recycling service to distributor

    (6) For the purposes of this Part (other than section 5 of Part V.1 of Schedule V and section 10 of Part VI of that Schedule), if

    • (a) a recycler of returnable containers of a particular class makes a particular taxable supply in a province of a service in respect of the recycling of returnable containers of that class to a distributor of returnable containers of that class who is not a recycler who supplies such services to other distributors of returnable containers of that class,

    • (b) the recycler does not supply the containers to the distributor, and

    • (c) the consideration for the particular supply is based in whole or in part on the amount in that province of the returnable container charge in respect of returnable containers of that class or on an amount that a consumer could reasonably expect to receive for a used and empty returnable container of that class,

    the value of the consideration for the particular supply is deemed to be equal to the amount determined by the formula

    A - B

    where

    A
    is the consideration for the particular supply as otherwise determined for the purposes of this Part; and
    B
    is the total of all amounts each of which is the returnable container charge in that province for a returnable container in respect of which that consideration is paid or payable.
  • Marginal note:Supply between recyclers

    (7) For the purposes of this Part, if a recycler of returnable containers of a particular class makes a particular taxable supply in a province of a service in respect of the recycling of returnable containers of that class to another recycler of returnable containers of that class without supplying the containers to the other recycler and the consideration for the particular supply is based in whole or in part on the amount in that province of the refund, or the returnable container charge, in respect of returnable containers of that class, the value of the consideration for the particular supply is deemed to be equal to the amount determined by the formula

    A - B

    where

    A
    is the consideration for the particular supply as otherwise determined for the purposes of this Part; and
    B
    is the total of all amounts each of which is the refund in that province for a returnable container in respect of which that consideration is paid or payable.
  • Marginal note:Special rules in the case of prescribed provincial Act

    (8) Subject to subsection (9), if a registrant acquires, in a province in which an Act prescribed for the purposes of paragraph (2)(b) applies, a beverage in a returnable container for the purpose of making in that province a taxable supply of the beverage in the container in circumstances in which the registrant will charge a returnable container charge in respect of the container and be required to collect tax in respect of the supply,

    • (a) if a supply of a service in respect of the container is deemed under that paragraph to have been made to the registrant, the tax in respect of the supply of the service shall not be included in determining an input tax credit of the registrant; and

    • (b) if the registrant makes a supply in that province of the beverage in circumstances in which the registrant is deemed under that paragraph to have made a supply of a service in respect of the container, neither the consideration for the supply of that service nor any tax in respect of that supply shall be included in determining the net tax of the registrant.

  • Marginal note:Non-application of special rules

    (9) If a registrant is deemed under paragraph (2)(b) to have received or made at any time a supply in a province of a service in respect of a returnable container of a particular class containing a particular beverage, paragraph (8)(a) or (b), as the case may be, does not apply in respect of the supply if

    • (a) the usual business practice of the registrant at that time is to charge, when making supplies in the province of the particular beverage contained in returnable containers of that class, a returnable container charge that is not equal to the returnable container charge that the registrant pays in respect of returnable containers of that class containing the particular beverage when supplies of the beverage are made to the registrant in the province; or

    • (b) the registrant is a specified beverage retailer in respect of the container and elects under subsection (3) not to deduct the amount of the returnable container charge charged by the registrant in determining the consideration for the supply by the registrant of the particular beverage in the returnable container.

  • Marginal note:Change in practice — beginning to apply special rules

    (10) If, after changing their usual business practice with respect to supplies of a particular beverage in returnable containers of a particular class from the practice described in subsection (9), a registrant makes, at a particular time, in a province in which an Act prescribed for the purposes of paragraph (2)(b) applies, a supply of the particular beverage in a returnable container of that class in circumstances in which the registrant is deemed under that paragraph to have made a supply of a service in respect of the container and that supply of the beverage is the first supply by the registrant of the particular beverage in a returnable container of that class in respect of which paragraph (8)(b) applies since the change in practice, the registrant is deemed, for the purposes of this Part,

    • (a) to have made, at the particular time, a taxable supply of a service in respect of each filled and sealed returnable container of that class containing the particular beverage

      • (i) that was, immediately before the particular time, held by the registrant for the purpose of making a taxable supply of the particular beverage in the province in circumstances in which the registrant would be deemed under paragraph (2)(b) to have made a supply of a service in respect of the container, and

      • (ii) that was last supplied to the registrant in the province in circumstances in which the registrant was deemed under that paragraph to have received a supply of a service in respect of which the registrant was entitled to claim an input tax credit or would have been so entitled if tax would, in the absence of section 156 or 167, have been payable in respect of that supply of the service; and

    • (b) to have collected, at the particular time, tax in respect of each supply of a service in respect of a returnable container that is deemed under paragraph (a) to have been made by the registrant equal to the tax that was payable or would, in the absence of section 156 or 167, have been payable by the registrant in respect of the supply to the registrant of the service referred to in subparagraph (a)(ii) in respect of that container.

  • Marginal note:Change in practice — ceasing to apply special rules

    (11) If, after changing their usual business practice with respect to supplies of a particular beverage in returnable containers of a particular class to the practice described in subsection (9), a registrant makes, at a particular time, in a province in which an Act prescribed for the purposes of paragraph (2)(b) applies, a supply of the particular beverage in a returnable container of that class in circumstances in which the registrant is deemed under that paragraph to have made a supply of a service in respect of the container and the supply is the first supply by the registrant of the particular beverage in a returnable container of that class in respect of which paragraph (8)(b) would have applied but for the change in practice, the registrant is deemed, for the purposes of this Part,

    • (a) to have received, at the particular time, for use exclusively in a commercial activity of the registrant, a taxable supply of a service in respect of each filled and sealed returnable container of that class containing the particular beverage

      • (i) that was, immediately before the particular time, held by the registrant for the purpose of making a taxable supply of the particular beverage in the province in circumstances in which the registrant would be deemed under paragraph (2)(b) to have made a supply of a service in respect of the container, and

      • (ii) that was last supplied to the registrant in the province in circumstances in which the registrant was deemed under that paragraph to have received a supply of a service in respect of which, owing solely to paragraph (8)(a), the registrant was not entitled to claim an input tax credit or would not have been so entitled if tax would, in the absence of section 156 or 167, have been payable in respect of that supply of the service; and

    • (b) to have paid, at the particular time, tax in respect of each supply of a service in respect of a returnable container that is deemed under paragraph (a) to have been received by the registrant equal to the tax that was or would, in the absence of section 156 or 167, have been payable by the registrant in respect of the supply to the registrant of the service referred to in subparagraph (a)(ii) in respect of that container.

  • Marginal note:Ceasing to be registrant while special rules apply

    (12) If a person who makes supplies of a particular beverage in filled and sealed returnable containers of a particular class in a province in which an Act prescribed for the purposes of paragraph (2)(b) applies ceases at any time to be a registrant, the person is deemed, for the purposes of this Part,

    • (a) to have received, immediately before that time, a supply of a service in respect of each filled and sealed returnable container of that class containing the particular beverage that was held by the person immediately before that time and in respect of which paragraph (8)(b) would have applied if the particular beverage in the container had been supplied by the person immediately before that time in circumstances in which the person would have been deemed under paragraph (2)(b) to have made a supply of a service in respect of the container; and

    • (b) to have paid, immediately before that time, tax in respect of each supply of a service in respect of a returnable container that is deemed under paragraph (a) to have been received by the person equal to the tax that was payable or would, in the absence of section 156 or 167, have been payable by the person in respect of the supply to the person of the service that was deemed under paragraph (2)(b) to have been made to the person when the person acquired the partic­ular beverage.

  • Marginal note:Supplies under s. 167

    (13) For the purposes of this Part, if a registrant makes a taxable supply of a beverage in a filled and sealed returnable container under an agreement for the supply of a business or part of a business in circumstances in which subsection 167(1.1) applies to the supply and the registrant is deemed under subsection (2) to have made a supply of a service in respect of the container, the supply of the service is deemed to have been made under the agreement and not to be a service referred to in subparagraph 167(1.1)(a)(i).

  • Marginal note:Deemed tax collected where s. 156 or 167 applies

    (14) For the purposes of this Part, if

    • (a) a supplier makes a supply in a province of a beverage in a filled and sealed returnable container to a registrant and is deemed under paragraph (2)(b) to have made at any time a supply to the registrant of a service in respect of the container,

    • (b) because of section 156 or 167, no tax is payable in respect of the supplies to the registrant of the beverage and of the service,

    • (c) by reason only of paragraph (8)(a), the registrant would not have been entitled to claim an input tax credit in respect of the tax that would, in the absence of section 156 or 167, have been payable in respect of the supply of the service, and

    • (d) paragraph (8)(b) does not apply in respect of the supplies to the registrant of the beverage and the service in determining the net tax of the supplier,

    the registrant is deemed to have made, at that time, a particular taxable supply in the province of a service in respect of the container for consideration equal to the amount that would, without reference to section 156, be the value of the consideration for the supply of the service that is deemed under paragraph (2)(b) to have been made to the registrant in respect of the container and the registrant is deemed to have collected at that time tax in respect of the particular supply calculated on that consideration.

  • Marginal note:Deemed tax paid where s. 156 or 167 applies

    (15) For the purposes of this Part, if

    • (a) a supplier makes a supply in a province of a beverage in a filled and sealed returnable container to a registrant and is deemed under paragraph (2)(b) to have made at any time a supply to the registrant of a service in respect of the container,

    • (b) because of section 156 or 167, no tax is payable in respect of the supplies to the registrant of the beverage and of the service,

    • (c) paragraph (8)(a) would not have applied to the registrant in respect of the tax that would, in the absence of section 156 or 167, have been payable in respect of the supply of the service, and

    • (d) paragraph (8)(b) applies in respect of the supplies by the supplier to the registrant of the beverage and the service in determining the net tax of the supplier,

    the registrant is deemed to have received, at that time, a particular taxable supply in the province of a service in respect of the container for consideration equal to the amount that would, without reference to section 156, be the value of the consideration for the supply of the service that is deemed under paragraph (2)(b) to have been made to the registrant in respect of the container, the registrant is deemed to have paid, at that time, tax in respect of the particular supply calculated on that consideration and the registrant is deemed to have acquired that service for the same purpose as that for which the registrant acquired the beverage.

  • Marginal note:Fair market value of beverage in filled and sealed container

    (16) For the purposes of this Part, if a beverage in a filled and sealed returnable container in respect of which there is a returnable container charge is held at any time by a person for consumption, use or supply in a province in the course of commercial activities of the person, the fair market value of the beverage at that time is deemed not to include the amount that would be determined as the refund for the container if the beverage were supplied in the province by the person at that time in the filled and sealed container.

  • Marginal note:Basic tax content of beverage in filled and sealed container

    (17) The basic tax content at any time of a beverage in a filled and sealed returnable container that is held at that time by a person shall be determined as if the tax payable, if any, in respect of the last supply of a service in respect of the container that was deemed under subsection (2) or (15) to have been made to the person, and the tax payable, if any, in respect of the last supply of a service in respect of the container that was deemed under subsection (14) to have been made by the person, were additional tax payable by the person in respect of the last acquisition of the beverage by the person.

  • Marginal note:Addition to net tax

    (18) If

    • (a) a registrant makes a supply in a province of a beverage in a returnable container of a particular class in respect of which the registrant is a specified beverage retailer,

    • (b) paragraph (2)(a) applies in determining, for the purposes of this Part, the consideration for the supply, and

    • (c) the registrant makes at any time a supply in the province of that container used and empty for consideration without having acquired it used and empty for consideration,

    the registrant shall, in determining the net tax of the registrant for the reporting period that includes that time, add the amount determined by the formula

    A × B

    where

    A
    is
    • (i) if the province is a participating province, the total of the rate of tax under subsection 165(1) and the tax rate for the province, and

    • (ii) in any other case, the rate of tax under subsection 165(1); and

    B
    is the refund for a returnable container of that class in the province.
  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1990, c. 45, s. 12
  • 1993, c. 27, s. 89
  • 1997, c. 10, s. 209
  • 2007, c. 18, s. 28
 
Date modified: