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

Full Document:  

Act current to 2022-08-08 and last amended on 2022-06-23. Previous Versions

PART VIConsumption or Sales Tax (continued)

Tax Imposed (continued)

Marginal note:Adjustment of rates of tax on certain petroleum products

  •  (1) Commencing on April 1, 1986, the rates enumerated in Schedule II.1 shall be adjusted each January 1, April 1, July 1 and October 1, so that the rates applicable during the three month period commencing on the adjustment day are equal to the amounts obtained

    • (a) by multiplying

      • (i) the rates so enumerated

      by

      • (ii) the ratio, adjusted or altered in the manner prescribed pursuant to subsection (3) and rounded to the nearest one-thousandth or, where the ratio is equidistant from two one-thousandths, to the greater thereof, that

        • (A) the Industrial Product Price Index for Motor Gasoline, in the case of the rates enumerated in sections 1 and 2 of Schedule II.1, or

        • (B) the Industrial Product Price Index for Diesel Oil, in the case of the rate enumerated in section 5 of Schedule II.1,

        for the twelve month period ending on the day before the three month period immediately preceding the adjustment day bears to

        • (C) the Industrial Product Price Index for Motor Gasoline, in the case of the rates enumerated in sections 1 and 2 of Schedule II.1, or

        • (D) the Industrial Product Price Index for Diesel Oil, in the case of the rate enumerated in section 5 of Schedule II.1,

        for the twelve month period ending on September 30, 1985; and

    • (b) by rounding the product obtained under paragraph (a) to the nearest one hundred-thousandth of a dollar or, if the product is equidistant from two one-hundred-thousandths of a dollar, to the greater thereof.

  • Marginal note:Industrial Product Price Index

    (2) For the purposes of subsection (1), the Industrial Product Price Index for Motor Gasoline, or the Industrial Product Price Index for Diesel Oil, for a twelve month period is the result obtained

    • (a) by aggregating the most recent Industrial Product Price Index for Motor Gasoline or the most recent Industrial Product Price Index for Diesel Oil, as the case may be, for each month in the period, including the relevant data for the period from January 1, 1981 to December 31, 1985, released by Statistics Canada under the authority of the Statistics Act on or before the fifteenth day of the third month following the end of that period and adjusted or altered in the manner prescribed pursuant to subsection (3);

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

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

  • Marginal note:Adjustment regulations

    (3) The Governor in Council, on the recommendation of the Minister of Finance, may make regulations

    • (a) prescribing the manner in which the ratio referred to in subparagraph (1)(a)(ii) shall be adjusted or altered; and

    • (b) prescribing, for the purposes of subsection (2), the manner in which the Industrial Product Price Index for Motor Gasoline or the Industrial Product Price Index for Diesel Oil for any month shall be adjusted or altered.

  • Marginal note:Definition of terms

    (4) The Governor in Council may, by regulation, define the terms regular gasoline, unleaded gasoline, premium leaded gasoline and premium unleaded gasoline for the purposes of paragraph 50(1.1)(c) and of Schedule II.1.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • R.S., 1985, c. 7 (2nd Supp.), s. 17, c. 42 (2nd Supp.), s. 6, c. 12 (4th Supp.), s. 17

Marginal note:Goods exempted

  •  (1) The tax imposed by section 50 does not apply to the sale or importation of the goods mentioned in Schedule III, other than those goods mentioned in Part XIII of that Schedule that are sold to or imported by persons exempt from consumption or sales tax under subsection 54(2).

  • Marginal note:Articles partially exempted

    (2) The tax imposed by section 50 shall be imposed only on fifty per cent of the sale price if manufactured in Canada or fifty per cent of the duty-paid value if imported, of metric retail scales having a maximum weighing capacity of one hundred kilograms and specifically designed for the weighing of goods in retail operations, when sold or imported before January 1, 1984.

  • Marginal note:Idem

    (3) The tax imposed by section 50 on the sale price of mobile homes and modular building units shall be imposed on only fifty per cent of the sale price thereof.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • R.S., 1985, c. E-15, s. 51
  • R.S., 1985, c. 7 (2nd Supp.), s. 18

Marginal note:Appropriation by manufacturer or producer

  •  (1) Where goods that were manufactured or produced in Canada are appropriated by the manufacturer or producer thereof for his own use, the sale price of the goods shall be deemed to be equal to the sale price that would have been reasonable in the circumstances if the goods had been sold, at the time of the appropriation, to a person with whom the manufacturer or producer was dealing at arm’s length.

  • Marginal note:Exception

    (2) Subsection (1) does not apply in respect of goods, other than printed matter, manufactured by Her Majesty in right of Canada or a province (except goods manufactured by a company to which the Government Corporations Operation Act applies) for any purpose, other than

    • (a) sale;

    • (b) use by any board, commission, railway, public utility, university, manufactory, company or agency that is owned, controlled or operated by the Government of Canada or the government of a province or under the authority of Parliament or of the legislature of a province; or

    • (c) use by Her Majesty in right of Canada or a province or Her agents or servants for commercial or mercantile purposes.

  • Marginal note:Lease or other disposal by manufacturer or producer

    (3) Where goods that were manufactured or produced in Canada are leased, or the right to use any such goods, but not the property therein, is sold or given, by the manufacturer or producer thereof to a person

    • (a) the goods shall be deemed to have been sold at the time the goods were so leased or the right to use them was so sold or given; and

    • (b) the sale price of the goods shall be deemed to be equal to the sale price that would have been reasonable in the circumstances if the goods had been sold at that time to that person.

  • Marginal note:Royalty or other consideration

    (4) Where the sale price of goods consists in whole or in part of a royalty, or any other consideration, that is unascertained at the earlier of the time the goods are delivered or the property in the goods passes to the purchaser thereof, the sale price of the goods shall be deemed to be equal to the sale price that would have been reasonable in the circumstances if the whole of the consideration had been ascertained at that time.

  • Marginal note:Disposal of cosmetics by licensed manufacturer

    (5) Where cosmetics were manufactured or produced in Canada by a licensed manufacturer for a non-resident person who is a person described in paragraph (d) of the definition manufacturer or producer in subsection 2(1) and who has failed to apply for a licence as required by section 54, the licensed manufacturer shall be deemed to have sold the cosmetics for a sale price equal to the sale price that would have been reasonable in the circumstances if the cosmetics had been sold in Canada, at the earlier of the time the cosmetics were delivered or the property in the cosmetics passed to that non-resident person, by that non-resident person to a third person with whom he was dealing at arm’s length.

  • Marginal note:Disposal of video cassettes by licensed manufacturer

    (6) Where prerecorded video cassettes that are new or have not been used in Canada were manufactured or produced in Canada by a licensed manufacturer for a non-resident person who is a person described in paragraph (j) of the definition manufacturer or producer in subsection 2(1) and who has failed to apply for a licence as required by section 54, the licensed manufacturer shall be deemed to have sold the cassettes for a sale price equal to the sale price that would have been reasonable in the circumstances if the cassettes had been sold in Canada, at the earlier of the time the cassettes were delivered or property in the cassettes passed to that non-resident person, by that non-resident person to a third person with whom he was dealing at arm’s length.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • R.S., 1985, c. E-15, s. 52
  • R.S., 1985, c. 15 (1st Supp.), s. 20, c. 7 (2nd Supp.), s. 19, c. 12 (4th Supp.), s. 18

 [Repealed, R.S., 1985, c. 15 (1st Supp.), s. 21]

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • R.S., 1985, c. E-15, s. 53
  • R.S., 1985, c. 15 (1st Supp.), s. 21

Licences

Marginal note:Manufacturers’ licences

  •  (1) Subject to this section, every manufacturer or producer shall apply for a licence for the purposes of this Part.

  • Marginal note:Exemption

    (2) The Minister may grant a licence to any person applying therefor under subsection (1), but the Governor in Council, on the joint recommendation of the Minister of Finance and the Minister of National Revenue, may make regulations exempting any class of small manufacturer or producer from payment of consumption or sales tax on goods manufactured or produced by persons who are members of the class and persons so exempted are not required to apply for a licence.

  • Marginal note:Withdrawal of exemption

    (3) An exemption granted under subsection (2) may, on the joint recommendation of the Minister of Finance and the Minister of National Revenue, be withdrawn by the Governor in Council at any time.

  • Marginal note:Cancellation

    (4) The Minister may cancel a licence issued under this Part if, in his opinion, it is no longer required for the purposes of this Part.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • R.S., c. E-13, s. 31
  • 1976-77, c. 15, s. 9
  • 1980-81-82-83, c. 68, s. 13

Marginal note:Licensed wholesaler or jobber

  •  (1) A bona fide wholesaler or jobber may be granted a licence but, if a wholesaler was not in possession of a licence on September 1, 1938, no licence shall be issued to him unless he is engaged exclusively or mainly in the purchase and sale of lumber or unless fifty per cent of his sales for the three months immediately preceding his application were exempt from the sales tax under this Act.

  • Marginal note:Duty free shops

    (2) A person who proposes to operate and sell goods exclusively at a duty free shop licensed as such under the Customs Act or who operates and sells goods exclusively at such a duty free shop shall be deemed, for the purposes of this section, to be a bona fide wholesaler or jobber, and the Minister may grant a licence to that person notwithstanding that he does not fulfil the requirements of subsection (1).

  • Marginal note:Licensee to give security

    (3) A wholesaler or jobber applying for a licence under this section shall give security that the wholesaler or jobber and any person other than the wholesaler or jobber who acquires from or against him the right to sell any goods, whether as a result of the operation of law or of any transaction not taxable under this Act, shall keep adequate books or accounts for the purposes of this Act and shall render true returns of sales as required by this Act, or any regulations made under this Act, and pay any tax imposed by this Act on those sales.

  • Marginal note:Amount of security

    (4) The security referred to in subsection (3) shall be for an amount of not more than twenty-five thousand dollars and not less than two thousand dollars.

  • Marginal note:Bond

    (5) The security referred to in subsection (3) shall be by a bank or by bond of an incorporated guarantee company authorized to do business in Canada, acceptable to the Minister, or by deposit of bonds or other securities of or guaranteed by the Government of Canada.

  • Marginal note:Form of bond

    (6) Where the security referred to in subsection (3) is by bond of a guarantee company, the bond shall be in form approved by the Minister.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • R.S., 1985, c. E-15, s. 55
  • R.S., 1985, c. 1 (2nd Supp.), s. 191

Marginal note:Cancellation of licence

  •  (1) The licence of any wholesaler or jobber who contravenes any requirement of this Part shall be cancelled forthwith and the wholesaler or jobber shall not be granted a licence within a period of two years after the date of the cancellation.

  • Marginal note:Idem

    (2) The licence of any person deemed by subsection 55(2) to be a bona fide wholesaler or jobber shall be cancelled forthwith if he ceases to operate and sell goods exclusively at a duty free shop licensed as such under the Customs Act, and on cancellation of the licence pursuant to this section, all taxes imposed by this Act are forthwith payable on all goods then in the possession of the licensee that have been purchased free of tax by virtue of the licence.

  • Marginal note:Tax on cancellation

    (3) On the cancellation under subsection (1) of the licence granted to any licensed wholesaler, or if the licence is cancelled at the request of the licensee, or if any such licence expires and is not renewed by the licensee, all taxes imposed by this Act are forthwith payable on all goods then in the possession of the licensee that have been purchased free of tax by virtue of the licence, which taxes shall be paid at the rate in force when the licence is cancelled or expires and is not renewed and shall be computed in accordance with paragraph 50(1)(c) and Part III.

  • Marginal note:Cancellation of bond

    (4) Notwithstanding that a bond of a guarantee company given under section 55 has been cancelled, the bond shall be deemed to remain in force in relation to all goods in the possession of the licensed wholesaler at the time of cancellation.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • R.S., 1985, c. E-15, s. 56
  • R.S., 1985, c. 1 (2nd Supp.), s. 192
  • 1990, c. 45, s. 8
  • 2002, c. 22, s. 373

Evasion

Marginal note:Powers of Minister

  •  (1) Notwithstanding anything in this Part, if it appears to the Minister that payment of the consumption or sales tax is being evaded by a licensed manufacturer or licensed wholesaler, the Minister may require that the consumption or sales tax shall be imposed, levied and collected on any material specified by the Minister sold to any licensed manufacturer or licensed wholesaler or to any class of licensed manufacturers or licensed wholesalers specified by the Minister, at the time of sale of the material when produced or manufactured in Canada, or prior to release under the Customs Act if the material is imported by the licensed manufacturer or licensed wholesaler.

  • Marginal note:Deduction

    (2) A deduction may be made, in respect of the tax imposed, levied and collected on material referred to in subsection (1), on submission by the licensed manufacturer or licensed wholesaler of proof that the material has been used in the manufacture of an article that is subject to the consumption or sales tax and on which the tax has been paid.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • R.S., 1985, c. E-15, s. 57
  • R.S., 1985, c. 1 (2nd Supp.), s. 193

Marginal note:Deemed sale price

  •  (1) Notwithstanding any other provision of this Act other than subsections 52(5) and (6), for the purposes of this Part and Part III, where goods that were manufactured or produced, or deemed to have been manufactured or produced, in Canada are sold or deemed to be sold, or the property therein is otherwise transferred, by the manufacturer or producer thereof to a person with whom the manufacturer or producer was not dealing at arm’s length at the earlier of the time the goods were delivered or property in the goods passed to that person for no sale price or for a sale price that is less than the sale price (in this subsection referred to as the “reasonable sale price”) that would have been reasonable in the circumstances if the manufacturer or producer and that person had been dealing at arm’s length at that time, the manufacturer or producer shall be deemed to have sold the goods at that time for the reasonable sale price.

  • Marginal note:Idem

    (2) Notwithstanding any other provision of this Act, for the purposes of this Part and Part III, where a licensed wholesaler has purchased goods from, or property in goods has otherwise been transferred to a licensed wholesaler by, a person with whom the licensed wholesaler was not dealing at arm’s length at the earlier of the time the goods were delivered or property in the goods passed to the licensed wholesaler for no price or for a price that was less than the price (in this subsection referred to as the “reasonable price”) that would have been reasonable in the circumstances if the licensed wholesaler and that person had been dealing at arm’s length at that time and the goods were not imported by the licensed wholesaler, the licensed wholesaler shall be deemed to have purchased the goods at that time for a price equal to the reasonable price.

  • Marginal note:Idem

    (3) Notwithstanding any other provision of this Act, for the purposes of this Part and Part III, where a person has purchased or imported goods as described in subsection 68.19(1) or for a use rendering the purchase or importation exempt from tax under Part III or this Part and that person, under circumstances rendering him liable to pay the tax imposed by Part III or this Part, sells the goods or is deemed to sell the goods, or the property therein is otherwise transferred, to another person with whom he was not dealing at arm’s length at the time of the sale or transfer for no sale price or for a sale price that is less than the sale price (in this subsection referred to as the “reasonable sale price”) that would have been reasonable in the circumstances if they had been dealing at arm’s length at that time, that person shall be deemed to have sold the goods at that time for the reasonable sale price.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • R.S., 1985, c. E-15, s. 58
  • R.S., 1985, c. 12 (4th Supp.), s. 19
 
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