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

Buying Groups

Marginal note:Definitions

• 178.6 (1) In this section,

  original supplier

  original supplier of tangible personal property or a service means a person who makes a taxable supply of the property or service to another person who, in turn, supplies the property or service by way of a pass-through supply; (fournisseur initial)

  pass-through supply

  pass-through supply means a taxable supply of tangible personal property or a service made by a person for consideration that is equal to the consideration paid or payable by the person to the supplier who supplied the property or service to the person; (fourniture intermédiaire)

  ultimate recipient

  ultimate recipient means a recipient of a pass-through supply. (dernier acquéreur)

• Marginal note:Application for buyer designation

  (2) Where

  • (a) all or substantially all of the supplies of property and services made by a particular person in the ordinary course of the particular person’s business are pass-through supplies,

  • (b) in respect of each pass-through supply of tangible personal property or a service made by the particular person, the original supplier of the property or service causes physical possession of the property to be transferred to, or renders the service to, the ultimate recipient, or to another person on behalf of the ultimate recipient, and not to the particular person, and

  • (c) in respect of each pass-through supply of tangible personal property or a service made by the particular person, the ultimate recipient pays, on behalf of the particular person, to the original supplier of the property or service, the amount payable by the particular person to the original supplier as consideration for the property or service,

  the particular person may apply to the Minister, in prescribed form containing prescribed information and filed in prescribed manner, to be designated as a buyer.

• Marginal note:Designation as buyer

  (3) Where the Minister receives an application of a person under subsection (2), the Minister may, subject to such conditions as the Minister may at any time impose, designate the person as a buyer and notify the person in writing of the designation and the day it becomes effective.

• Marginal note:Revocation of designation

  (4) The Minister may revoke a designation of a person made under subsection (3)

  • (a) on application of the person, or

  • (b) where the person fails to comply with any condition imposed in respect of the designation,

  and, where the designation is revoked, the Minister shall notify the person in writing of the day the designation ceases to be effective.

• Marginal note:Buying group method

  (5) Where a person makes a pass-through supply of tangible personal property or a service at a time when a designation of the person as a buyer under subsection (3) is in effect, for the purposes of this Part (other than section 148, this section and Subdivision E of Division V), the following rules apply:

  • (a) the supply of the property or service by the original supplier of the property or service shall be deemed to have been made to the ultimate recipient and not to the person;

  • (b) the person shall be deemed not to have received a supply of the property or service from the original supplier nor to have supplied the property or service to the ultimate recipient;

  • (c) the consideration payable for, and the tax payable in respect of, the supply by the original supplier of the property or service shall be deemed to be payable by the ultimate recipient and any amount paid in respect of the consideration or tax shall be deemed to have been paid by the ultimate recipient;

  • (d) despite paragraph (c), the person and the ultimate recipient are jointly and severally, or solidarily, liable for the payment of the tax in respect of the supply made by the original supplier; and

  • (e) if the amount charged or collected by the original supplier of the property or service as or on account of tax under Division II in respect of the supply exceeds the tax that was collectible under that Division in respect of the supply, or if the amount of tax collectible under that Division in respect of the supply is reduced because of a reduction in the consideration for the supply, and the original supplier issues to, or receives from, the person a credit note or a debit note in respect of the supply, the person shall be deemed to have received or issued the note on behalf of the ultimate recipient.

Designated Charities

Meaning of specified service

• 178.7 (1) For the purposes of this section, specified service means any service, other than a service

  • (a) that is

    • (i) the care, employment or training for employment of individuals with disabilities,

    • (ii) an employment placement service rendered to such individuals, or

    • (iii) the provision of instruction to assist such individuals in securing employment; and

  • (b) the recipient of which is a public sector body or a board, commission or other body established by a government or a municipality.

• Marginal note:Charity supplying specified service

  (2) A charity may apply to the Minister, in prescribed form containing prescribed information, to be designated for the purposes of paragraph 1(d.1) of Part V.1 of Schedule V if

  • (a) one of the main purposes of the charity is the provision of employment, training for employment or employment placement services for individuals with disabilities or the provision of instructional services to assist such individuals in securing employment; and

  • (b) the charity supplies, on a regular basis, specified services that are performed, in whole or in part, by individuals with disabilities.

• Marginal note:Designation by the Minister

  (3) On application by a charity under subsection (2), the Minister may, by notice in writing, designate the charity for the purposes of paragraph 1(d.1) of Part V.1 of Schedule V, effective on the first day of a reporting period specified in the notice, if

  • (a) the Minister is satisfied that the conditions described in paragraphs (2)(a) and (b) are met; and

  • (b) a revocation under subsection (4) pursuant to a request made by the charity has not become effective in the 365-day period ending immediately before that day.

• Marginal note:Revocation of designation

  (4) The Minister may, by notice in writing, revoke a designation of a charity, effective on the first day of a reporting period specified in the notice, if

  • (a) the Minister is satisfied that the conditions described in paragraphs (2)(a) and (b) are no longer met; or

  • (b) the charity makes a request in writing to the Minister that the designation be revoked and the designation had not become effective in the 365-day period ending immediately before that day.

Import Arrangements

Definition of specified supply

• 178.8 (1) In this section, specified supply means a supply of goods that

  • (a) are, at any time after the supply is made, imported; or

  • (b) have been imported in circumstances in which section 144 deems the supply to have been made outside Canada.

• Marginal note:Deemed importer of goods

  (2) Subject to subsections (4) and (7), if a recipient of a specified supply of goods made outside Canada does not, at any time before the release of the goods, supply the goods outside Canada and the recipient or any other person imported the goods for consumption, use or supply by the recipient (in this section referred to as the “constructive importer”), the constructive importer is deemed to have so imported the goods, and any amount paid or payable as or on account of tax on the goods under Division III in respect of the importation is deemed to have been paid or payable, as the case may be, by or on behalf of the constructive importer and not by or on behalf of any other person.

• Marginal note:Agreement to treat supply as made in Canada

  (3) If a registrant makes a specified supply of goods outside Canada that is a taxable supply, the recipient of the supply is the constructive importer of the goods and an amount is, in the absence of subsection (2), paid or payable by or on behalf of the registrant as or on account of tax on the goods under Division III in respect of the importation, the registrant and the recipient may at any time agree, in prescribed form containing prescribed information, to have subsection (4) apply in respect of the supply and importation.

• Marginal note:Effect of agreement

  (4) If a registrant and the constructive importer of goods have entered into an agreement under subsection (3) in respect of the supply and importation of the goods and the constructive importer has not entered into an agreement under subsection (5) in respect of any amount paid as or on account of tax on the goods under Division III in respect of the importation,

  • (a) the supply is deemed to have been made in Canada

    • (i) in the case of a constructive importer who is an individual to whom the goods are shipped to a destination in Canada by another person, at the address to which the goods are sent by mail or courier by the shipper or at the destination that is specified in the contract for carriage of the goods or at which the shipper has directed a common carrier or consignee retained on behalf of the constructive importer to transfer physical possession of the goods, and

    • (ii) in any other case, at the place at which the goods are released;

  • (b) except if subsection 155(1) applies, the consideration for the supply is deemed to be equal to the amount otherwise determined for the purposes of this Part plus any amount (in this paragraph referred to as “additional consideration”) not otherwise included in that consideration that the constructive importer at a particular time pays or is required to pay to the registrant in respect of duties or taxes payable on the goods under this Act (other than this Part), the Customs Tariff, the Excise Act, 2001, the Special Import Measures Act or any other law relating to customs and, despite section 168, the tax in respect of the supply that is calculated on the additional consideration becomes payable at the particular time;

  • (c) the registrant is deemed to have imported the goods for the purpose of supply in the course of commercial activities of the registrant; and

  • (d) any amount paid or payable as or on account of tax on the goods under Division III in respect of the importation is deemed to have been paid or payable, as the case may be, by or on behalf of the registrant and not by or on behalf of any other person.

• Marginal note:Agreement regarding rebates, abatements and refunds

  (5) If the constructive importer of goods is deemed under subsection (2) to be the person by whom the goods are imported but another person (in this section referred to as the “specified importer”) was identified, for the purposes of the Customs Act, as the importer of the goods when the goods were accounted for under section 32 of that Act and, in the absence of subsection (2), paid an amount as or on account of tax on the goods under Division III, the constructive importer and the specified importer may agree in writing to have subsection (7) apply in respect of that amount.

• Marginal note:Restriction

  (6) Subsection (5) does not apply to any amount in respect of which, because of section 263.01, the constructive importer of goods would not be entitled to a rebate referred to in that section if the constructive importer paid the amount as or on account of tax on the goods under Division III.

• Marginal note:Effect of agreement

  (7) If a constructive importer of goods and a specified importer have entered into an agreement under subsection (5) to have this subsection apply in respect of an amount paid as or on account of tax on the goods under Division III and the constructive importer has not entered into an agreement under subsection (3) with the supplier of the goods in respect of the importation,

  • (a) subsections 215.1(2) and (3) and 216(6) and (7) apply as if the specified importer and not the constructive importer were the person by whom the goods were imported and the amount was paid, but only if, within a reasonable time after any rebate under subsection 215.1(2) or 216(6) in respect of the amount is granted or any abatement or refund is, because of subsection 215.1(3) or 216(7), granted in respect of the amount, the specified importer issues to the constructive importer a note (in this subsection referred to as a “tax adjustment note”), in prescribed form containing prescribed information, indicating the amount of the rebate, abatement or refund;

  • (b) in applying subsection 215.1(2) or (3) in respect of the amount in accordance with paragraph (a), that subsection shall be read without reference to subparagraphs (a)(i) and (ii), and paragraph (c), of that subsection; and

  • (c) if the constructive importer receives a tax adjustment note indicating the amount of a rebate, abatement or refund,

    • (i) the amount that is rebated, abated or refunded is deemed to have been payable as tax and to have been recovered by the constructive importer and, except for the purposes of section 232, the tax adjustment note is deemed to be a credit note referred to in that section received by the constructive importer for the amount of the rebate, abatement or refund,

    • (ii) the amount of the rebate, abatement or refund shall be added in determining the net tax of the constructive importer for the reporting period in which the tax adjustment note is received, to the extent that the amount has been included in determining an input tax credit claimed by the constructive importer in a return filed for a preceding reporting period or the constructive importer is or was entitled to be compensated under a warranty for loss suffered because of any of the circumstances that gave rise to the rebate, abatement or refund by receiving a supply of replacement parts, or replacement property, that are goods included in section 5 of Schedule VII, and

    • (iii) if the amount rebated, abated or refunded has been included in determining a rebate under Division VI paid to, or applied to a liability of, the constructive importer before the particular day on which the tax adjustment note is received and the rebate so paid or applied exceeds the rebate under that Division to which the constructive importer would have been entitled if the amount rebated, abated or refunded had not been paid, the constructive importer shall pay to the Receiver General under section 264 the excess as if it were an excess amount of the rebate under that Division paid to the constructive importer

      • (A) if the constructive importer is a registrant, on the day on or before which the constructive importer’s return for the reporting period that includes the particular day is required to be filed, and

      • (B) in any other case, on the last day of the calendar month immediately following the calendar month that includes the particular day.

• Marginal note:Application

  (8) Subject to subsection (9), subsections (2) to (7) apply for the purposes of this Part other than

  • (a) Division III except subsections 215.1(2) and (3) and 216(6) and (7);

  • (b) sections 220.07, 236.3 and 273.1;

  • (c) Schedule VII; and

  • (d) the Non-Taxable Imported Goods (GST/HST) Regulations and the Value of Imported Goods (GST/HST) Regulations.

• Marginal note:Application

  (9) Subsections (2) to (7) do not apply in respect of goods imported in circumstances in which subsection 169(2) applies or in which section 180 or subparagraph 211.23(1)(c)(i) deems a person to have paid tax in respect of a supply of property equal to the tax under Division III in respect of the importation of goods.

• Marginal note:Limitation period where retroactive agreement

  (10) If a registrant and a constructive importer enter into an agreement under subsection (3) in respect of a previous importation of goods, the Minister has, despite section 298, until the day that is four years after the day on which the agreement under subsection (3) is entered into to make any assessment, reassessment or additional assessment for the purpose of taking into account an amount payable or remittable by the registrant or the constructive importer as a result of the application of subsection (4).