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

PART VIIITransitional

Meaning of taxable service

• 117 (1) For the purposes of this section, taxable service means a taxable service as defined in subsection 21.1(1) and a taxable service as defined in subsection 21.22(1).

• Marginal note:Part II.1 and II.2 tax

  (2) Where the amount charged for a taxable service by a person providing the service is charged

  • (a) after April 1991, or

  • (b) after August 1990 for a period beginning after 1990,

  no tax thereon shall be imposed, levied or collected under Part II.1 or II.2.

• Marginal note:Idem

  (3) Where the amount charged for a taxable service by a person providing the service is charged after August 1990 in respect of a period beginning before 1991 and ending after 1990, no tax shall be imposed or levied under Part II.1 or II.2 or collected under those Parts by the person providing the service in respect of the amount charged, to the extent that the amount charged relates to the portion of the service that is provided after 1990.

Marginal note:Tax under Part VI

• 118 (1) No tax shall be imposed, levied or collected under Part VI on any goods

  • (a) that are sold by a licensed wholesaler and that, before 1991, have not been delivered to the purchaser of the goods, and the property in which has not, before 1991, passed to the purchaser thereof;

  • (b) the importation of which has not been accounted for under subsection 32(1), (2) or (5) of the Customs Act before 1991;

  • (c) that are manufactured or produced in Canada and that have not, before 1991, been delivered to a purchaser of the goods, and the property in which has not, before 1991, passed to a purchaser thereof; or

  • (d) that are retained by the manufacturer or producer thereof or by a licensed wholesaler for that person’s own use after 1990 or for rental after 1990 by that person to others.

• Marginal note:Idem

  (2) Where goods sold by a licensed wholesaler are delivered after 1990 to a purchaser of the goods but property in the goods passed to the purchaser before 1991, the goods shall, for the purposes of paragraph 50(1)(c), be deemed to have been delivered to the purchaser on the day the property in the goods passed to the purchaser.

• Marginal note:Idem

  (3) Where a person is a manufacturer or producer who has, before November 1989, entered into a contract referred to in subparagraph 50(1)(a)(ii) in respect of the sale of goods of the person’s manufacture or production

  • (a) no tax shall be imposed, levied or collected under Part VI in respect of instalments that become payable under that contract after 1990; and

  • (b) where an invoice issued or dated before 1991 is issued for an instalment payable under that contract after 1990, subsection 152(1) does not apply in respect of the instalment.

• Marginal note:Idem

  (4) Where a person is a manufacturer or producer who has, after October 1989, entered into a contract referred to in subparagraph 50(1)(a)(ii) in respect of the sale of goods of the person’s manufacture or production and the goods have not been delivered to the purchaser, and the property therein has not passed to the purchaser, before 1991,

  • (a) no tax shall be imposed, levied or collected under Part VI in respect of instalments that become payable under that contract after 1990; and

  • (b) where an invoice issued or dated before 1991 is issued for an instalment payable under that contract after 1990, subsection 152(1) does not apply in respect of the instalment.

• Marginal note:Idem

  (5) Where a person who is a manufacturer or producer has, after October 1989, entered into a contract referred to in subparagraph 50(1)(a)(ii) in respect of the sale of goods of the person’s manufacture or production and the goods have been delivered to the purchaser, or the property therein has passed to the purchaser, before 1991, any instalments that become payable under the contract after November 1990 shall, for the purposes of this Act, be deemed to have become payable on December 31, 1990.

• Marginal note:Idem

  (6) Notwithstanding subsection (3), subsection (5) applies in respect of the instalments as set out in a contract entered into before November 1989 where any amendments or alterations to the contract that vary the timing or amounts of the instalment under the contract are made after October 1989 and before 1991, except where the amendments or alterations to the contract are reasonable to accommodate a change in the total consideration payable under the contract.

• Marginal note:Diversions after 1990

  (6.1) Where any of the events described in subsection 50(7) or (8) in respect of goods occur after 1990, no tax under Part VI shall be imposed, levied or collected under that subsection in respect of the goods.

• Marginal note:Continuous supplies

  (7) Where Part VI applies in respect of goods that are delivered on a continuous basis, by means of a wire, pipeline or other conduit, by a vendor who is a licensed wholesaler or the manufacturer or producer of the goods and who invoices on a regular or periodic basis, and the invoice for a sale of the goods is issued by the vendor to the purchaser after August 1990, no tax shall be imposed, levied or collected under Part VI in respect of the goods, to the extent that the goods are delivered and the property therein passes to the purchaser after 1990.

Marginal note:Revocation of approval

• 119 (1) Subsection 49(2) does not apply in respect of tax imposed under Part VI where an approval of an application given under subsection 48(3) is revoked after 1990.

• Marginal note:Wholesaler’s licence cancellation

  (2) Subsection 56(3) does not apply in respect of tax imposed under Part VI where a licence granted under section 55 is cancelled after 1990.

Sales Tax Inventory Rebate

Marginal note:Definitions

• 120 (1) In this section,

  capital property

  capital property, in respect of a person, means property that is, or that would be if the person were a taxpayer under the Income Tax Act, capital property of the person within the meaning of that Act, other than property described in Class 12 or 14 of Schedule II to the Income Tax Regulations; (immobilisation)

  commercial activity

  commercial activity of a person means a business carried on by the person (other than a business carried on by an individual without a reasonable expectation of profit), except to the extent to which the business involves the making of exempt supplies (within the meaning assigned by subsection 123(1)) by the person; (activité commerciale)

  inventory

  inventory of a person as of any time means items of tax-paid goods that are described in the person’s inventory in Canada at that time and that are

  • (a) held at that time for sale, lease or rental separately, for a price or rent in money, to others in the ordinary course of a commercial activity of the person, or

  • (b) building materials held at that time for use by the person in a business of constructing, renovating or improving buildings or structures carried on by the person, but not including any such goods that before that time have been incorporated into new construction or a renovation or improvement or have otherwise been delivered to a construction, renovation or improvement job site,

  and that are not

  • (c) capital properties of the person,

  • (d) held by the person for use in the construction, renovation or improvement of property that is or is to be capital property of the person, or

  • (e) included in the description of any other person’s inventory at that time; (inventaire)

  sales tax

  sales tax means the consumption or sales tax imposed under Part VI; (taxe de vente)

  tax-paid goods

  tax-paid goods means goods, acquired before 1991 by a person, that have not been previously written off in the accounting records of the person’s business for the purposes of the Income Tax Act and that are, as of the beginning of January 1, 1991,

  • (a) new goods that are unused,

  • (b) remanufactured or rebuilt goods that are unused in their condition as remanufactured or rebuilt goods, or

  • (c) used goods

  and on the sale price or on the volume sold of which tax (other than tax payable in accordance with subparagraph 50(1)(a)(ii)) was imposed under subsection 50(1), was paid and is not, but for this section, recoverable. (marchandises libérées de taxe)

• Marginal note:Goods in inventory

  (2) Where, under a contract referred to in subsection 118(3), sales tax has been paid on instalments under the contract in respect of any goods included in the purchaser’s inventory and the goods have been delivered to the purchaser, or the title thereto has passed to the purchaser, before 1991, the goods shall be included in the inventory of that purchaser only to the extent of the instalments made before 1991 in respect thereof under the contract.

• Marginal note:Goods not expected to be sold

  (2.1) For the purposes of paragraph (a) of the definition inventory in subsection (1), that portion of the tax-paid goods that are described in a person’s inventory in Canada at any time that can reasonably be expected to be consumed or used by the person shall be deemed not to be held at that time for sale, lease or rental.

• Marginal note:Rebate of sales tax

  (3) Subject to this section, where a person who, as of January 1, 1991, is registered under Subdivision D of Division V of Part IX has any tax-paid goods in inventory at the beginning of that day,

  • (a) where the tax-paid goods are goods other than used goods, the Minister shall, on application made by the person, pay to that person a rebate in accordance with subsections (5) and (8); and

  • (b) where the tax-paid goods are used goods, the goods shall be deemed, for the purposes of section 176, to be used tangible personal property supplied in Canada by way of sale on January 1, 1991 to the person in respect of which tax was not payable by the person and to have been acquired for the purpose of supply in the course of commercial activities of the person for consideration paid on that day equal to 50% of the amount at which the goods would be required to be valued on that date for the purpose of computing the person’s income from a business for the purposes of the Income Tax Act.

• Marginal note:Restriction on rebate

  (3.1) Where section 178.3 applies, on January 1, 1991, to a direct seller, exclusive products of the direct seller that, but for this subsection, form part of the inventory at the beginning of that day of an independent sales contractor of the direct seller who is not a distributor in respect of whom an approval granted under subsection 178.2(4) on application made jointly with the direct seller is in effect on that day, shall be deemed, for the purposes of this section, not to form part of that inventory.

• Marginal note:Definitions

  (3.2) In subsection (3.1), direct seller, distributor, exclusive product and independent sales contractor have the meanings assigned by section 178.1.

• Marginal note:Taking of inventory

  (4) For the purposes of subsection (3), the inventory of a person shall be determined as of the beginning of January 1, 1991, and may be determined

  • (a) on January 1, 1991;

  • (b) where the business of the person is not open for active business on January 1, 1991, on the first day after January 1, 1991, or the last day before January 1, 1991, on which the business is open for active business; or

  • (c) on a day before or after January 1, 1991 where the Minister is satisfied that the inventory system of the person is adequate to permit a reasonable determination of the person’s inventory as of January 1, 1991.

• Marginal note:Determination of rebate

  (5) Subject to subsection (8), for the purposes of subsection (3), the rebate payable to a person in respect of the person’s inventory as of the beginning of January 1, 1991 is, subject to subsection 337(7), the amount determined by a prescribed method using prescribed tax factors.

• Marginal note:Application of Parts VI and VII

  (6) Parts VI and VII, other than subsection 72(7), apply in respect of an application for a rebate and of a payment of a rebate under this section as if the application were an application for a refund under section 68 and the payment were made under section 72.

• Marginal note:Interest on payment

  (7) Where a rebate is paid to a person under this section, interest at the prescribed rate shall be paid to the person beginning on the day that is the later of

  • (a) March 1, 1991, and

  • (b) the day that is twenty-one days after the day the application is received by the Minister,

  and ending on the day the rebate is paid, and compounded monthly on the total amount of the payment and interest outstanding.

• Marginal note:Limitation

  (8) No rebate shall be paid under this section unless the application therefor is filed with the Minister before 1992.

New Housing Rebate

Marginal note:Definitions

• 121 (1) In this section,

  estimated federal sales tax

  estimated federal sales tax for a residential complex means the prescribed amount in respect of the complex; (taxe de vente fédérale estimative)

  specified residential complex

  specified residential complex means

  • (a) a multiple unit residential complex containing more than two residential units where the construction or substantial renovation of the complex began before 1991 and subsection 191(3) did not apply and, notwithstanding subsections 191(6) and (7), would not have applied, after the construction or substantial renovation began and before 1991, to deem a supply of the complex to have been made, or

  • (b) a residential condominium unit where the construction or substantial renovation of the condominium complex in which the unit is situated began before 1991 and neither subsection 191(1) nor (2) applied, after the construction or substantial renovation began and before 1991, to deem a supply of the unit to have been made; (immeuble d’habitation déterminé)

  specified single unit residential complex

  specified single unit residential complex means a residential complex (other than a floating home or a mobile home)

  • (a) that is a single unit residential complex or a multiple unit residential complex containing not more than two residential units,

  • (b) the construction or substantial renovation of which began before 1991, and

  • (c) that was not occupied by any individual as a place of residence or lodging after the construction or substantial renovation began and before 1991. (immeuble d’habitation à logement unique déterminé)

• Marginal note:Rebate for specified single unit residential complex

  (2) Where

  • (a) a builder of a specified single unit residential complex

    • (i) gives possession of the complex to a person under a lease, licence or similar arrangement and thereby is deemed under subsection 191(1) or (3) to have made a taxable supply of the complex, or

    • (ii) makes a taxable supply by way of sale of the complex to an individual,

  • (b) tax under Part IX is payable in respect of the supply,

  • (c) the individual or person, as the case may be, first takes possession of the complex after 1990 and before 1995, and

  • (d) the construction or substantial renovation of the complex is substantially completed

    • (i) before July 1991, where the individual or person, as the case may be, first takes possession of the complex before July 1991, and

    • (ii) before 1991, in any other case,

  the Minister shall, subject to subsections (4) and (4.1), pay a rebate to the individual or, in the case described in subparagraph (a)(i), to the builder equal to

  • (e) 2/3 of the estimated federal sales tax for the complex where, before April 1991, the construction or substantial renovation of the complex is substantially completed and possession of the complex is transferred, and

  • (f) 1/3 of the estimated federal sales tax for the complex in any other case.

• Marginal note:Liability of the builder

  (2.1) Where a rebate in respect of a residential complex is paid under subsection (2) to an individual who is not a builder of the complex, or to an assignee of the individual, and

  • (a) the builder has given to the individual or to the Minister incorrect information in writing as to the substantial completion before 1991 of the construction or substantial renovation of the complex,

  • (b) the builder knew or ought to have known that the information was incorrect, and

  • (c) the individual did not know and could not reasonably be expected to have known that the information was incorrect,

  the rebate shall be deemed, for the purposes of section 81.39, to have been received by the builder as if the builder had applied therefor.

• Marginal note:Rebate for specified residential complex

  (3) Where, immediately before 1991, a builder of a specified residential complex (other than a builder of the complex to whom, because of subsection 191(5) or (6), subsections 191(1) to (4) do not apply) owned or had possession of the complex and had not transferred ownership or possession under an agreement of purchase and sale to any person who is not a builder of the complex, the Minister shall, subject to subsections (4) and (4.1), pay a rebate to the builder equal to

  • (a) where the complex is a multiple unit residential complex,

    • (i) 50% of the estimated federal sales tax for the complex, where the construction or substantial renovation of the complex was, on January 1, 1991, more than 25% completed and not more than 50% completed, and

    • (ii) 75% of the estimated federal sales tax for the complex, where the construction or substantial renovation of the complex was, on January 1, 1991, more than 50% completed; and

  • (b) where the complex is a residential condominium unit in a condominium complex,

    • (i) 50% of the estimated federal sales tax for the unit, where the construction or substantial renovation of the condominium complex was, on January 1, 1991, more than 25% completed and not more than 50% completed, and

    • (ii) 75% of the estimated federal sales tax for the unit, where the construction or substantial renovation of the condominium complex was, on January 1, 1991, more than 50% completed.

• Marginal note:Application for rebate

  (4) A rebate in respect of a residential complex shall not be paid under this section to a person where the person fails to apply to the Minister for the rebate in prescribed form and manner before 1995 or where a rebate under this section in respect of the complex was paid to any other person entitled thereto.

• Marginal note:Rebate based on consideration

  (4.1) Where the estimated federal sales tax for a residential complex is an amount based on the consideration, or a portion of the consideration, for a supply of the complex, a rebate in respect of the complex shall not be paid under this section to a person unless the person has applied for the rebate after tax under Part IX became payable in respect of that supply.

• Marginal note:Application of section 191

  (5) For the purposes of this section, section 191 shall be deemed to have been in force at all times before 1991.

• Marginal note:Application of Parts VI and VII

  (6) Parts VI and VII apply in respect of an application for a rebate and of a payment of a rebate under this section as if the application were an application for a refund under section 68 and the payment were made under section 72.