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

SUBDIVISION CReturns and Payment of Tax

Marginal note:Returns and payment

• 220.09 (1) Where tax under this Division becomes payable by a person,

  • (a) where the person is a registrant, the person shall, on or before the day on or before which the person’s return under section 238 for the reporting period in which the tax became payable is required to be filed, pay the tax to the Receiver General and report the tax in that return; and

  • (b) in any other case, the person shall, on or before the last day of the month following the calendar month in which the tax became payable, pay the tax to the Receiver General and file with the Minister in prescribed manner a return in respect of the tax in prescribed form containing prescribed information.

• Marginal note:Exception

  (2) Despite subsection (1), if the tax under section 220.05, 220.06 or 220.07 is payable to Her Majesty in right of Canada by a person in respect of a specified motor vehicle that the person is required to register under the laws of a participating province relating to the registration of motor vehicles, the person shall pay the tax to the provincial authority in its capacity as agent of Her Majesty in right of Canada at the earlier of the time at which the person registers the vehicle and the time at or before which the person is required to register it, and

  • (a) if the person is a registrant, the person is not required to report the tax in a return; and

  • (b) if the person is not a registrant, the person is not required to file a return in respect of the tax.

• Marginal note:Deduction for prescribed amount

  (3) Where tax under this Division becomes payable by a person and all or any portion of that tax is an amount that is prescribed for the purpose of subsection 234(3), that amount shall be deducted from the tax payable in determining the amount required under subsection (1) to be paid.

• Marginal note:No return required

  (4) Where the amount that a person is required to pay to the Receiver General under subsection (1) is nil, the person is not required to file a return under this Division.

DIVISION VCollection and Remittance of Division II Tax

SUBDIVISION ACollection

Marginal note:Collection of tax

• 221 (1) Every person who makes a taxable supply shall, as agent of Her Majesty in right of Canada, collect the tax under Division II payable by the recipient in respect of the supply.

• Marginal note:Exception

  (2) A supplier (other than a prescribed supplier) who makes a taxable supply of real property by way of sale is not required to collect tax under Division II payable by the recipient in respect of the supply where

  • (a) the supplier is a non-resident person or is resident in Canada by reason only of subsection 132(2);

  • (b) the recipient is registered under Subdivision D and, in the case of a recipient who is an individual, the property is neither a residential complex nor supplied as a cemetery plot or place of burial, entombment or deposit of human remains or ashes;

  • (b.1) the supplier and the recipient have made an election under section 2 of Part I of Schedule V in respect of the supply; or

  • (c) the recipient is a prescribed recipient.

• Marginal note:Exception — emission allowance

  (2.1) A supplier (other than a prescribed supplier) that makes a taxable supply of an emission allowance is not required to collect tax under Division II payable by the recipient in respect of the supply.

• Marginal note:Idem

  (3) Where a carrier who makes a particular taxable supply of a service of transporting tangible personal property

  • (a) is provided with a declaration referred to in section 7 of Part VII of Schedule VI by the shipper, and

  • (b) at or before the time the tax in respect of the particular supply becomes payable the carrier did not know and could not reasonably be expected to know that

    • (i) the property was not being shipped for export,

    • (ii) the transportation by the carrier was not part of a continuous outbound freight movement in respect of the property, and

    • (iii) there was or was to be any diversion of the property to a final destination in Canada,

  the carrier is not required to collect tax in respect of the particular supply or any supply that is incidental to the particular supply.

• (3.1) [Repealed, 2001, c. 15, s. 9]

• Marginal note:Definitions

  (4) In subsection (3), continuous outbound freight movement and shipper have the same meanings as in Part VII of Schedule VI.

Meaning of inventory

• 221.1 (1) In this section, inventory of a person means tangible personal property of the person acquired in Canada or imported by the person for supply by way of sale in the ordinary course of a business carried on by the person in Canada.

• Marginal note:Export certificate

  (2) The Minister may, on the application of a person who is registered under Subdivision D, authorize the person to use, beginning on a particular day in a fiscal year of the person and subject to such conditions as the Minister may from time to time specify, a certificate (in this section referred to as an “export certificate”) for the purpose of section 1.1 of Part V of Schedule VI, if it can reasonably be expected

  • (a) that at least 90% of the total of all consideration for supplies to the person of items of inventory acquired in Canada by the person in the 12-month period commencing immediately after the particular day will be attributable to supplies that would be included in section 1 of that Part if it were read without reference to paragraph (e) of that section; and

  • (b) that the total of all consideration, included in determining the income of a business of the person for the year, for supplies made outside Canada by the person of items of inventory of the person that are not consumed, used, processed, transformed or altered after having been acquired in Canada or imported by the person and before being so supplied by the person will equal or exceed 90% of the total of all consideration, included in determining that income, for supplies made by the person of items of inventory of the person.

• Marginal note:Application

  (3) An application for authority to use an export certificate shall be made in prescribed form containing prescribed information and be filed with the Minister in prescribed manner.

• Marginal note:Notice of authorization

  (4) If the Minister authorizes a registrant to use an export certificate, the Minister shall notify the registrant in writing of the authorization, its effective date and its expiry date and the number assigned by the Minister that identifies the registrant or the authorization and that must be disclosed by the registrant when providing the certificate for the purpose of section 1.1 of Part V of Schedule VI.

• Marginal note:Revocation

  (5) The Minister may revoke, as of a particular day, an authorization granted under subsection (2) to a registrant where

  • (a) the registrant fails to comply with any condition attached to the authorization or any provision of this Part, or

  • (b) it can reasonably be expected that the requirements of paragraphs (2)(a) and (b) would not be met if the period referred to in paragraph (2)(a) were the twelve month period commencing on the particular day,

  and, where the Minister revokes the authorization, the Minister shall notify the registrant in writing of the revocation and the effective date of the revocation.

• Marginal note:Deemed revocation

  (6) An authorization granted to a registrant at any time under subsection (2) shall be deemed to have been revoked, effective after the last day of a fiscal year of the registrant ending after that time, where

  • (a) the fraction determined by the formula

    A/B

    where

    A

    is the total of all consideration paid or payable by the registrant for items of inventory that were acquired in Canada by the registrant in the year in the course of a business of the registrant and in respect of which the registrant provided to the suppliers thereof an export certificate, and

    B

    is the total of all consideration paid or payable by the registrant for items of inventory acquired in Canada by the registrant in the year in the course of that business,

  exceeds

  • (b) the fraction determined by the formula

    C/D

    where

    C

    is the total of all consideration, included in determining the income from that business for the year, for supplies made outside Canada by the registrant of items of inventory of the registrant that were not consumed, used, processed, transformed or altered after having been acquired in Canada or imported by the registrant and before being so supplied by the registrant, and

    D

    is the total of all consideration, included in determining that income, for supplies made by the registrant of items of inventory of the registrant.

• Marginal note:Cessation

  (7) An authorization granted under subsection (2) to a registrant ceases to have effect on the earlier of

  • (a) the day on which a revocation of the authorization becomes effective, and

  • (b) the day that is three years after the day on which the authorization, or its renewal, became effective.

• Marginal note:Application after revocation

  (8) Where an authorization granted to a registrant under subsection (2) is revoked, effective on a particular day, the Minister shall not grant to the registrant another authorization under that subsection that becomes effective before

  • (a) where the authorization was revoked in circumstances described in paragraph (5)(a), the day that is two years after the particular day; and

  • (b) in any other case, the first day of the second fiscal year of the registrant commencing after the particular day.

Marginal note:Trust for amounts collected

• 222 (1) Subject to subsection (1.1), every person who collects an amount as or on account of tax under Division II is deemed, for all purposes and despite any security interest in the amount, to hold the amount in trust for Her Majesty in right of Canada, separate and apart from the property of the person and from property held by any secured creditor of the person that, but for a security interest, would be property of the person, until the amount is remitted to the Receiver General or withdrawn under subsection (2).

• Marginal note:Amounts collected before bankruptcy

  (1.1) Subsection (1) does not apply, at or after the time a person becomes a bankrupt (within the meaning of the Bankruptcy and Insolvency Act), to any amounts that, before that time, were collected or became collectible by the person as or on account of tax under Division II.

• Marginal note:Withdrawal from trust

  (2) A person who holds tax or amounts in trust by reason of subsection (1) may withdraw from the aggregate of the moneys so held in trust

  • (a) the amount of any input tax credit claimed by the person in a return under this Division filed by the person in respect of a reporting period of the person, and

  • (b) any amount that may be deducted by the person in determining the net tax of the person for a reporting period of the person,

  as and when the return under this Division for the reporting period in which the input tax credit is claimed or the deduction is made is filed with the Minister.

• Marginal note:Extension of trust

  (3) Despite any other provision of this Act (except subsection (4)), any other enactment of Canada (except the Bankruptcy and Insolvency Act), any enactment of a province or any other law, if at any time an amount deemed by subsection (1) to be held by a person in trust for Her Majesty is not remitted to the Receiver General or withdrawn in the manner and at the time provided under this Part, property of the person and property held by any secured creditor of the person that, but for a security interest, would be property of the person, equal in value to the amount so deemed to be held in trust, is deemed

  • (a) to be held, from the time the amount was collected by the person, in trust for Her Majesty, separate and apart from the property of the person, whether or not the property is subject to a security interest, and

  • (b) to form no part of the estate or property of the person from the time the amount was collected, whether or not the property has in fact been kept separate and apart from the estate or property of the person and whether or not the property is subject to a security interest

  and is property beneficially owned by Her Majesty in right of Canada despite any security interest in the property or in the proceeds thereof and the proceeds of the property shall be paid to the Receiver General in priority to all security interests.

• Marginal note:Meaning of security interest

  (4) For the purposes of subsections (1) and (3), a security interest does not include a prescribed security interest.

Marginal note:Sale of account receivable

222.1 If a person makes a taxable supply that gives rise to an account receivable and at any time the person supplies by way of sale or assignment the debt, for the purposes of sections 222, 225, 225.1 and 227,

• (a) the person is deemed to have collected, at that time, the amount, if any, of the tax in respect of the taxable supply that was not collected by the person before that time; and

• (b) any amount collected by any person after that time on account of the tax payable in respect of the taxable supply is deemed not to be an amount collected as or on account of tax.

Marginal note:Disclosure of tax

• 223 (1) If a registrant makes a taxable supply, other than a zero-rated supply, the registrant shall indicate to the recipient, either in prescribed manner or in the invoice or receipt issued to, or in an agreement in writing entered into with, the recipient in respect of the supply,

  • (a) the consideration paid or payable by the recipient for the supply and the tax payable in respect of the supply in a manner that clearly indicates the amount of the tax; or

  • (b) that the amount paid or payable by the recipient for the supply includes the tax payable in respect of the supply.

• Marginal note:Indication of total

  (1.1) If a registrant makes a taxable supply, other than a zero-rated supply, and, in an invoice or a receipt in respect of the supply issued to the recipient or in an agreement in writing in respect of the supply, the registrant indicates the tax payable or the rate or rates at which tax is payable in respect of the supply, the registrant shall indicate in that invoice, receipt or agreement

  • (a) the total tax payable in respect of the supply in a manner that clearly indicates the amount of that total; or

  • (b) the total of the rates at which tax is payable in respect of the supply.

• Marginal note:Exception

  (1.2) If a registrant makes a taxable supply in a participating province and is entitled under subsection 234(3) to deduct an amount in respect of the supply in determining the net tax of the registrant, the registrant is not required to include under subsection (1) or (1.1) tax under subsection 165(2), or the rate of that tax, in the total tax payable or the total of the rates of tax payable in respect of the supply.

• Marginal note:Exception

  (1.3) Subsection (1) does not apply to a registrant when the registrant is not required to collect the tax payable in respect of the taxable supply made by the registrant.

• Marginal note:Particulars

  (2) A person who makes a taxable supply to another person shall, on the request of the other person, forthwith furnish to the other person in writing such particulars of the supply as may be required for the purposes of this Part to substantiate a claim by the other person for an input tax credit or rebate in respect of the supply.