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Refund of Duties Regulations (SOR/98-48)

Regulations are current to 2020-12-28 and last amended on 2016-06-14. Previous Versions

Refund of Duties Regulations

SOR/98-48

CUSTOMS ACT

Registration 1997-12-29

Refund of Duties Regulations

P.C. 1997-2020 1997-12-29

Whereas the proposed Refund of Duties Regulations give effect, in part, to a public announcement made on October 27, 1997 and are therefore, by virtue of paragraph 164(4)(a.2)Footnote a of the Customs ActFootnote b, not required to be published under subsection 164(3) of that Act;

Therefore, His Excellency the Governor General in Council, on the recommendation of the Minister of National Revenue, pursuant to sections 74Footnote c to 76, 78Footnote d and 81 and paragraph 164(1)(i)Footnote e of the Customs Actb, hereby makes the annexed Refund of Duties Regulations.

Interpretation

 The definitions in this section apply in these Regulations.

Act

Act means the Customs Act. (Loi)

bulk

bulk has the same meaning as in section 2 of the Excise Act, 2001. (en vrac)

carrier

carrier means a person who transports imported goods. (transporteur)

CSA importer

CSA importer has the same meaning as in section 2 of the Accounting for Imported Goods and Payment of Duties Regulations. (importateur PAD)

competent authority

competent authority means an official of the Government of Canada, an official of any municipal or provincial government, an insurance adjuster or a marine surveyor whose duties include the examination or inspection of goods that are the subject of a refund under these Regulations. (autorité compétente)

qualified appraiser

qualified appraiser means a person who is qualified by virtue of their experience, business, occupation or profession to appraise goods that are the subject of a refund under these Regulations and to estimate their loss in value. (appréciateur qualifié)

  • SOR/2005-213, s. 1
  • SOR/2005-386, s. 1

PART 1Goods that Have Suffered Damage, Deterioration or Destruction

Application

 This Part applies to the granting of a refund under paragraph 74(1)(a) of the Act of duties paid on goods that have suffered damage, deterioration or destruction at any time from the time of shipment to Canada to the time of release.

Notice

 Written notice of a claim for a refund of duties and the reasons for the claim must be given to an officer within

  • (a) three days after the release of perishable goods; and

  • (b) four years after the release of non-perishable goods.

Evidence in Support of Application

 An application for a refund of duties must be supported by

  • (a) a written statement by any carrier, any operator of a sufferance warehouse, bonded warehouse or duty free shop or any competent authority having knowledge of the circumstances, time and place of the damage, deterioration or destruction suffered by the goods, giving the particulars or, if such a statement cannot be obtained, a written statement by a competent authority certifying that the goods suffered damage, deterioration or destruction before they were released; and

  • (b) documentation in the form of

    • (i) an appraisal by a qualified appraiser verifying the loss in value of the goods as a result of the damage, deterioration or destruction of the goods,

    • (ii) a copy of any document, including a credit note from the vendor, indicating the amount granted to compensate for the damage, deterioration or destruction of the goods, or

    • (iii) a commitment of payment from the carrier or the carrier’s insurers given to the importer or owner of the goods and showing the amount of compensation given for the loss in value of the goods.

Amount of Refund

 The amount of the refund of duties shall be

  • (a) in the case of perishable goods or brittle goods such as crockery, china, glass and glassware, an amount equal to that proportion of the duties paid on the goods that 85 per cent of the loss in value of the goods is of the value for duty of the goods;

  • (b) in the case of sugar or any saccharine product on which duty is determined according to the polarimetric test and that has suffered damage or deterioration from salt water, an amount equal to the difference between

    • (i) the duties paid on the goods, and

    • (ii) the duties that would be payable if, after the percentage of polarization of the goods is determined, there is deducted from that percentage an amount equal to five times the percentage of salt present in that portion of the water found in the damaged goods that is in excess of the water found in samples of undamaged goods, as certified in writing by an officer authorized to test such samples; and

  • (c) in the case of any other goods, an amount equal to that proportion of the duties paid on the goods that the loss in value of the goods is of the value for duty of the goods.

Classes of Goods in Respect of Which and Circumstances Where No Refunds Shall Be Granted

 No refund of duties shall be granted in respect of

  • (a) goods for which there is a manufacturer’s or producer’s recommended shelf-life period or allowable storage-before-use period if the goods have suffered damage or deterioration by reason of the expiration of that period; or

  • (b) iron or steel or any product manufactured from iron or steel that has suffered damage or deterioration by reason of rust.

PART 2Goods Deficient in Quantity

Application

 This Part applies to the granting of a refund under paragraph 74(1)(b) of the Act of duties paid on goods where the quantity of goods released is less than the quantity in respect of which duties were paid.

Notice

 Written notice of a claim for a refund of duties and the reasons for the claim must be given to an officer within four years after the release of the goods.

Evidence in Support of Application

 An application for a refund of duties must be supported by

  • (a) a copy of any document providing evidence of the actual quantity of the goods shipped to Canada together with a copy of any document, including a credit note from the vendor, indicating the amount granted to compensate for the value of the goods short-shipped;

  • (b) a written statement by the carrier of the goods verifying the deficiency in quantity of the goods, if the deficiency occurred because the goods were lost or went astray while in the course of transit outside Canada, and explaining the circumstances under which the goods were lost or went astray; or

  • (c) a written statement by the carrier or operator of a sufferance warehouse, bonded warehouse or duty free shop verifying the deficiency in quantity of the goods, if the goods were lost or stolen after the goods were reported to an officer under section 12 of the Act and while the goods were in the custody of the carrier or operator, as the case may be.

Amount of Refund

 The amount of the refund of duties shall be an amount equal to the difference between

  • (a) the duties paid; and

  • (b) the duties payable on the quantity of goods actually released.

Classes of Goods in Respect of Which and Circumstances Where No Refunds Shall Be Granted

 No refund of duties shall be granted in respect of goods that were lost or stolen after they were reported to an officer under section 12 of the Act in circumstances where the carrier of the goods is liable under section 20 of the Act to pay the duties on the goods or an operator of a sufferance warehouse, bonded warehouse or duty free shop is liable under section 28 of the Act to pay the duties on the goods.

Circumstances When Unpaid Refund May Be Applied to Duties That Become Due

 In accordance with subsection 75(2) of the Act, if the quantity of imported goods released is less than the quantity in respect of which duties were paid and no refund of duties has been granted in respect of the deficient quantity and where the goods were deficient in quantity before their arrival in Canada, an officer may, at the request of the person by whom the duties were paid, apply any duties paid in respect of the deficient quantity of the goods to any duties that become due on the deficient quantity if any portion of those goods is subsequently imported by the same importer or owner, on condition that the person submits to the officer a copy of any document providing evidence of the actual quantity of the goods shipped to Canada or, if the circumstances in paragraph 9(b) apply, a written statement described in that paragraph.

  • SOR/2005-165, s. 1
  • SOR/2006-222, s. 1

PART 3Goods of Inferior Quality

Application

 This Part applies to the granting of a refund under paragraph 74(1)(c) of the Act of duties paid on goods that are of a quality inferior to the quality of the goods in respect of which the duties were paid.

Notice

 Written notice of a claim for a refund of duties and the reasons for the claim must be given to an officer within

  • (a) three days after the release of perishable goods; and

  • (b) four years after the release of non-perishable goods.

Evidence in Support of Application

  •  (1) Subject to subsection (2), an application for a refund of duties must be supported by a copy of any document, including a credit note from the vendor, indicating the amount granted to compensate for the difference between the value of the goods in respect of which duties were paid and the value of the goods of inferior quality.

  • (2) If a person who paid duties is unable to provide the document referred to in subsection (1) because of circumstances beyond their control and the person provides evidence of those circumstances, the application for a refund of duties must be supported by

    • (a) a written statement of the importer indicating that the goods are of a quality inferior to the quality of the goods in respect of which duties were paid and identifying the respect in which the quality is inferior; and

    • (b) an appraisal by a qualified appraiser showing the difference between the value of the goods in respect of which duties were paid and the value of the goods of inferior quality.

Amount of Refund

 The amount of the refund of duties shall be an amount equal to the difference between

  • (a) the duties paid, and

  • (b) the duties payable on the value of the goods of inferior quality.

Classes of Goods in Respect of Which and Circumstances Where No Refund Shall be Granted

 No refund of duties shall be granted in respect of

  • (a) goods for which there is a manufacturer’s or producer’s recommended shelf-life period or allowable storage-before-use period if the goods have suffered damage or deterioration by reason of the expiration of that period; or

  • (b) iron or steel or any product manufactured from iron or steel that has suffered damage or deterioration by reason of rust.

PART 4Goods Exported from a NAFTA Country or Chile

Application

 This Part applies to the granting of a refund under paragraph 74(1)(c.1) of the Act of duties paid on goods

  • (a) that were exported from a NAFTA country or Chile and imported into Canada

    • (i) on or after January 1, 1994, in the case of goods exported from a NAFTA country, and

    • (ii) on or after July 5, 1997, in the case of goods exported from Chile; and

  • (b) where no claim for preferential tariff treatment under NAFTA or no claim for preferential tariff treatment under CCFTA, as the case may be, was made in respect of those goods at the time they were accounted for under subsection 32(1), (3) or (5) of the Act.

Time Limit for Application — Goods Exported from Chile

 In the case of goods that were exported from Chile and imported into Canada on or after March 1, 2014, an application for a refund of duties must be made within four years after the goods were accounted for under subsection 32(1), (3) or (5) of the Act.

  • SOR/2015-66, s. 1

Evidence in Support of Application

 An application for a refund of duties must be supported by a copy of the Certificate of Origin for the goods in respect of which the application is made.

Amount of Refund

 The amount of a refund of duties shall be an amount equal to the difference between

  • (a) the duties paid, and

  • (b) the duties payable on the goods as a result of the goods being eligible for preferential tariff treatment under NAFTA or preferential tariff treatment under CCFTA, as the case may be.

PART 5Goods Imported from Israel or Another CIFTA Beneficiary or Shipped Through the United States

[SOR/2005-164, s. 2]

Application

 This Part applies to the granting of a refund under paragraph 74(1)(c.11) of the Act of duties paid on the following goods in respect of which no claim for preferential tariff treatment under CIFTA was made at the time the goods were accounted for under subsection 32(1), (3) or (5) of the Act:

  • (a) goods that were imported on or after January 1, 1997, from Israel or another CIFTA beneficiary; and

  • (b) goods, except for goods listed in any of Chapters 50 through 63 of the List of Tariff Provisions set out in the schedule to the Customs Tariff, that were shipped to Canada from Israel or another CIFTA beneficiary through the United States on or after July 15, 2002, if

    • (i) the goods did not undergo further production in the territory of the United States other than minor processing, or

    • (ii) any processing that occurred in the territory of the United States with respect to the goods did not increase the transaction value of the goods by greater than 10 per cent.

  • SOR/2005-165, s. 3

Evidence in Support of Application

 An application for a refund of duties must be supported by a copy of the Certificate of Origin for the goods in respect of which the application is made and, if applicable, a copy of the written and signed Declaration of Minor Processing required by subsection 10(1.1) of the Proof of Origin of Imported Goods Regulations.

  • SOR/2005-165, s. 4

Amount of Refund

 The amount of a refund of duties shall be an amount equal to the difference between

  • (a) the duties paid, and

  • (b) the duties payable on the goods as a result of the goods being eligible for preferential tariff treatment under CIFTA.

PART 5.1Goods Imported from Costa Rica, an EFTA State, Peru, Colombia, Jordan or Panama

[SOR/2013-213, ss. 7, 16, 25; SOR/2014-282, s. 7; SOR/2016-145, s. 7]

Application

 This Part applies to the granting of a refund under paragraph 74(1)(c.11) of the Act of duties paid on imported goods in respect of which no claim for preferential tariff treatment under CCRFTA, CEFTA, CPFTA, CCOF‍TA, CJFTA or CPAFTA was made at the time the goods were accounted for under subsection 32(1), (3) or (5) of the Act, and that were imported from, as the case may be,

  • (a) Costa Rica, on or after November 1, 2002;

  • (b) an EFTA state, on or after July 1, 2009;

  • (c) Peru, on or after August 1, 2009;

  • (d) Colombia, on or after August 15, 2011;

  • (e) Jordan, on or after October 1, 2012; or

  • (f) Panama, on or after April 1, 2013.

  • SOR/2004-126, s. 1
  • SOR/2013-213, ss. 8, 17, 26
  • SOR/2014-282, s. 8
  • SOR/2016-145, s. 8

Evidence in Support of Application

 An application for a refund of duties must be supported by a copy of the Certificate of Origin for the goods in respect of which the application is made.

  • SOR/2004-126, s. 1

Amount of Refund

 The amount of a refund of duties shall be an amount equal to the difference between

  • (a) the duties paid, and

  • (b) the duties payable on the goods as a result of the goods being eligible for preferential tariff treatment under CCRFTA, CEFTA, CPFTA, CCOFTA, CJFTA or CPAFTA, as the case may be.

  • SOR/2004-126, s. 1
  • SOR/2013-213, ss. 9, 18, 27
  • SOR/2014-282, s. 9
  • SOR/2016-145, s. 9

PART 6Clerical, Typographical or Similar Error

Application

 This Part applies to the granting of a refund under paragraph 74(1)(d) of the Act of duties paid on goods where the calculation of duties owing was based on a clerical, typographical or similar error.

Notice

 Written notice of a claim for a refund of duties and the reasons for the claim must be given to an officer within four years after the release of the goods.

  • SOR/2006-222, s. 2

Amount of Refund

 The amount of a refund of duties shall be an amount equal to the duties paid or overpaid in error.

PART 7Duties Paid or Overpaid Due to an Error in Determination

Application

 This Part applies to the granting of a refund under subsection 74(1)(e) of the Act of duties paid on goods where duties were paid or overpaid as a result of an error in the determination under subsection 58(2) of the Act of origin (other than in the circumstances described in paragraph 74(1)(c.1) or (c.11) of the Act), tariff classification or value for duty in respect of the goods and the determination has not been the subject of a decision under any of sections 59 to 61 of the Act.

Amount of Refund

 The amount of a refund of duties shall be an amount equal to the duties paid or overpaid in error.

PART 8Goods Sold or Otherwise Disposed of or Used, Before Any other Use Is Made of the Goods in Canada

Application

 This Part applies to the granting of a refund under paragraph 74(1)(f) of the Act of duties paid on goods, where the goods or other goods into which they have been incorporated, are sold or otherwise disposed of to a person, or are used, in compliance with a condition imposed under a tariff item in the List of Tariff Provisions set out in the schedule to the Customs Tariff, or under any regulations made under that Act in respect of a tariff item in that List, before any other use is made of the goods in Canada.

Evidence in Support of Application

 An application for a refund of duties must be accompanied by

  • (a) a declaration signed by the end-user of the goods affirming that the goods comply in all respects with the conditions imposed under the tariff item referred to in the application;

  • (b) a copy of the purchase order, sales invoice, contract or other document that relates to the sale or disposal of the goods in Canada, if applicable; and

  • (c) a copy of the prescribed form containing the prescribed information required by paragraph 32(1)(a) of the Act for the goods accounted for under subsection 32(1), (3) or (5) of the Act in respect of which the application is made.

Amount of Refund

 The amount of the refund of duties shall be an amount equal to the difference between

  • (a) the duties paid, and

  • (b) the duties that would have been payable if the goods had been classified under a tariff item, the conditions of which have subsequently been met by virtue of the goods being incorporated, sold or otherwise disposed of or used in compliance with those conditions.

PART 9Duties Overpaid or Paid in Error for other Reasons

Application

 This Part applies to the granting of a refund under paragraph 74(1)(g) of the Act of duties overpaid or paid in error for any of the following reasons:

  • (a) the duties were reduced or removed by a retroactive order or regulation made under the Customs Tariff;

  • (b) the goods are prohibited for use or sale by a provincial law; or

  • (c) the duties levied under section 21.1 of the Customs Tariff in respect of imported bulk spirits were paid or collected under the Act.

  • SOR/2005-213, s. 2

Evidence in Support of Application

 An application for a refund of duties overpaid or paid in error for the reason described in paragraph 31(a) must be supported by a copy of a commercial invoice or similar document substantiating that the goods subject to the refund of duties are the goods on which the duties were paid.

  • SOR/2005-213, s. 3
  • SOR/2006-222, s. 3

 An application for a refund of duties paid in error for the reason described in paragraph 31(b) must be supported by

  • (a) proof of exportation in the form of

    • (i) a copy of a customs document presented to an officer of the customs administration of a foreign country respecting the importation of the goods into that country,

    • (ii) a copy of a document of a transportation company respecting the exportation of the goods, or

    • (iii) other documentation that establishes that the goods were exported; or

  • (b) proof that the goods subject to the refund of duties were destroyed under customs supervision.

  • SOR/2005-213, s. 4(F)
  • SOR/2006-222, s. 4

 An application for a refund of duties paid in error for the reason described in paragraph 31(c) must be supported by

  • (a) a copy of a commercial invoice or similar document that substantiates that the goods subject to the refund of duties

    • (i) are the goods on which the duties were paid, and

    • (ii) were, at the time they were released in accordance with the Act, goods described under section 21.1 of the Customs Tariff; and

  • (b) evidence that substantiates that the importer is authorized under the Excise Act, 2001 to import the goods.

  • SOR/2005-213, s. 5
  • SOR/2006-222, s. 5

Amount of Refund

 In the case of a refund of duties overpaid or paid in error for the reason described in paragraph 31(a), the amount of the refund shall be an amount equal to the duties overpaid or paid.

  • SOR/2006-222, s. 6

 In the case of a refund of duties paid in error for the reason described in paragraph 31(b) or (c), the amount of the refund of duties shall be an amount equal to the duties paid.

  • SOR/2005-213, s. 6
  • SOR/2006-222, s. 6

PART 9.1Application of Refund of Duties Under Section 74 of the Act to Payment of Amounts Owing

  •  (1) CSA importers are prescribed as a class for the purposes of subsection 74(8) of the Act.

  • (2) The application of an amount of a refund of duties under subsection 74(8) of the Act is subject to the condition that the refund has been granted by the Minister under subsection 74(1) or (6) of the Act.

  • SOR/2005-386, s. 2

PART 10Goods that Are Defective, Are of Inferior Quality or Are Not the Goods Ordered and that Have Been Disposed of or Exported

Application

 This Part applies to the granting of a refund under subsection 76(1) of the Act of duties paid on goods that are defective, are of a quality inferior to that in respect of which duties were paid or are not the goods ordered and that have, subsequent to their importation, been disposed of in a manner acceptable to the Minister at no expense to Her Majesty in right of Canada or exported.

Notice

 Written notice of a claim for a refund of duties and the reasons for the claim must be given to an officer within

  • (a) three days after the release of perishable goods; and

  • (b) four years after the release of non-perishable goods.

Evidence in Support of Application

 An application for a refund of duties must be supported by

  • (a) a written statement by the exporter, vendor or manufacturer of the goods confirming that the goods are defective, are of a quality inferior to that in respect of which duties were paid or are not the goods ordered and identifying the nature of the defect or inferior quality or the goods that were actually ordered, as the case may be;

  • (b) a copy of any document relating to a refund or credit given by the vendor of the goods to the importer or owner, showing the amount of any refund of the purchase price or of any credit given in respect of the goods;

  • (c) in the case of goods of inferior quality or that are not the goods ordered, a copy of the invoice, purchase order, contract or other document that shows the goods that were actually ordered; and

  • (d) a copy of the prescribed form verifying the exportation or disposal of the goods.

  • SOR/2006-222, s. 7(F)

Amount of Refund

 The amount of the refund of duties shall be an amount equal to that proportion of the duties paid on the goods that the amount of the refund or credit given by the vendor is of the value for duty of the goods.

PART 11Reduction of Amount of Refund

  •  (1) Where merchantable scrap, waste or by-products result from the destruction or disposal of goods or the incorporation of goods into other goods in respect of which a refund of duties is to be granted under the Act, the amount of the refund shall be reduced by an amount determined by applying to the value of the merchantable scrap, waste or by-products produced the rate of duty under the Customs Tariff that applies on the date of production to the merchantable scrap, waste or by-products.

  • (2) In this section, value means, in respect of merchantable scrap, waste or by-products,

    • (a) if the manufacturer or producer sold the merchantable scrap, waste or by-products in an arm’s length transaction, their price; or

    • (b) in any other case, the price at which the manufacturer or producer would ordinarily have sold the merchantable scrap, waste or by-products in an arm’s length transaction on the date the application for a refund is made to an officer at a customs office.

  • SOR/2006-222, s. 8(F)

PART 12Refunds Not to Be Granted

 A refund of duties levied on bulk spirits under section 21.1 of the Customs Tariff shall not be paid under the Act to a person in respect of goods subject to those duties to the extent that it can reasonably be regarded that

  • (a) the amount has previously been refunded, remitted or paid to the person or applied against an amount owed by the person under this or any other Act of Parliament; or

  • (b) the person has applied for a refund, payment or remission of the amount under any other Act of Parliament.

  • SOR/2005-213, s. 7

Repeal

 [Repeal]

Coming into Force

 These Regulations come into force on January 1, 1998.

Date modified: