Excise Tax Act ( R.S. 1985, c. E-15 )
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Source: http://laws.justice.gc.ca/en/E-15/text.html
Updated to April 30, 2001
Subject: Taxation, Customs and Excise

Excise Tax Act

CHAPTER E-15

An Act respecting excise taxes

SHORT TITLE

Short title

1. This Act may be cited as the Excise Tax Act.

R.S., c. E-13, s. 1.

INTERPRETATION

Definitions

2. (1) The following definitions apply in this section, Parts I to VIII (other than section 121) and Schedules I to IV:

"accredited representative" « représentant accrédité »

"accredited representative" means a person who is entitled to the tax exemptions specified in Article 34 of the Convention set out in Schedule I to the Foreign Missions and International Organizations Act or Article 49 of the Convention set out in Schedule II to that Act;

"Agency" « Agence »

"Agency" means the Canada Customs and Revenue Agency established by subsection 4(1) of the Canada Customs and Revenue Agency Act;

"Atlantic manufactured tobacco" « tabac fabriqué atlantique »

"Atlantic manufactured tobacco" means manufactured tobacco

(a) in respect of which the excise taxes imposed under section 23 have been paid or are payable at

(i) the rates applicable before February 9, 1994,

(ii) the rates applicable after February 8, 1994 under paragraphs 1(f), 2(d) and 3(e) of Schedule II, or

(iii) the rate applicable after May 31, 1994 and before September 12, 1994 under paragraph 1(e) of Schedule II, and

(b) that is marked or stamped "ATLANTIC" or "ATLANTIQUE" to indicate that it is intended for retail sale in the Provinces of Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland but not marked or stamped to indicate that it is intended for retail sale specifically in the Province of Nova Scotia or New Brunswick;

"bank" « banque »

"bank" means a bank or an authorized foreign bank within the meaning of section 2 of the Bank Act;

"black stock" « produit non ciblé »

"black stock" means manufactured tobacco that is

(a) stamped in accordance with the Excise Act and the ministerial regulations made under that Act to indicate that the duties of excise and excise tax imposed on the manufactured tobacco have been paid, and

(b) not stamped or marked in accordance with any statute of a province to indicate that the manufactured tobacco is intended for retail sale in a particular province or in particular provinces;

"black stock cigarettes" « cigarettes non ciblées »

"black stock cigarettes" means cigarettes that are black stock;

"black stock manufactured tobacco" « tabac fabriqué non ciblé »

"black stock manufactured tobacco" means black stock other than cigarettes and tobacco sticks;

"cigar" « cigare »

"cigar" has the meaning assigned by section 6 of the Excise Act;

"cigarette" « cigarette »

"cigarette" has the meaning assigned by section 6 of the Excise Act;

"Commissioner" « commissaire »

"Commissioner" means the Commissioner of Customs and Revenue, appointed under section 25 of the Canada Customs and Revenue Agency Act;

"cosmetics" «cosmétiques»

"cosmetics" means goods, whether possessing therapeutic or prophylactic properties or not, commonly or commercially known as toilet articles, preparations or cosmetics, that are intended for use or application for toilet purposes, or for use in connection with the care of the human body, including the hair, nails, eyes, teeth, or any other part or parts thereof, whether for cleansing, deodorizing, beautifying, preserving or restoring, and includes toilet soaps, shaving soaps and shaving creams, skin creams and lotions, shampoos, mouth washes, oral rinses, toothpastes, tooth powders, denture creams and adhesives, antiseptics, bleaches, depilatories, perfumes, scents and similar preparations;

"diesel fuel" «combustible diesel»

"diesel fuel" includes any fuel oil that is suitable for use in internal combustion engines of the compression-ignition type, other than any such fuel oil that is intended for use and is actually used as heating oil;

"document" « document »

"document" includes money, a security and a record;

"duty free shop" « boutique hors taxes »

"duty free shop" has the meaning assigned by subsection 2(1) of the Customs Act;

"gasoline" «essence»

"gasoline" means gasoline type fuels for use in internal combustion engines other than aircraft engines;

"health goods" «marchandises relatives à la santé»

"health goods" means any material, substance, mixture, compound or preparation, of whatever composition or in whatever form, sold or represented for use in the diagnosis, treatment, mitigation or prevention of a disease, a disorder, an abnormal physical state or the symptoms thereof in human beings or animals or for use in restoring, correcting or modifying organic functions in human beings or animals;

"Indian" « Indien »

"Indian" means a person who is registered under the Indian Act as an Indian or is entitled to be registered under that Act as an Indian;

"licensed tobacco manufacturer" « fabricant de tabac titulaire de licence »

"licensed tobacco manufacturer" means a tobacco manufacturer, as defined in section 6 of the Excise Act, who is licensed as such under that Act;

"manufactured tobacco" « tabac fabriqué »

"manufactured tobacco" has the meaning assigned by section 6 of the Excise Act;

"manufacturer or producer" «fabricant ou producteur»

"manufacturer or producer" includes

(a) the assignee, trustee in bankruptcy, liquidator, executor or curator of any manufacturer or producer and, generally, any person who continues the business of a manufacturer or producer or disposes of his assets in any fiduciary capacity, including a bank exercising any powers conferred on it by the Bank Act and a trustee for bondholders,

(b) any person, firm or corporation that owns, holds, claims or uses any patent, proprietary, sales or other right to goods being manufactured, whether by them, in their name or for or on their behalf by others, whether that person, firm or corporation sells, distributes, consigns or otherwise disposes of the goods or not,

(c) any department of the government of Canada or any province, any board, commission, railway, public utility, manufactory, company or agency owned, controlled or operated by the government of Canada or any province, or under the authority of the legislature or the lieutenant governor in council of any province, that manufactures or produces taxable goods,

(d) any person who sells, otherwise than in a retail store exclusively and directly to consumers, cosmetics that were not manufactured by him in Canada, other than a person who sells those cosmetics exclusively and directly to hairstylists, cosmeticians and other similar users for use in the provision of personal grooming services and not for resale,

(e) [Repealed, R.S., 1985, c. 12 (4th Supp.), s. 1]

(f) any person who, by himself or through another person acting for him, prepares goods for sale by assembling, blending, mixing, cutting to size, diluting, bottling, packaging or repackaging the goods or by applying coatings or finishes to the goods, other than a person who so prepares goods in a retail store for sale in that store exclusively and directly to consumers,

(g) any person who imports into Canada new motor vehicles designed for highway use, or chassis therefor,

(h) any person who sells, otherwise than predominantly to consumers, new motor vehicles designed for highway use, or chassis therefor,

(i) any person who sells goods enumerated in Schedule III.1, other than a person who sells those goods exclusively and directly to consumers, and

(j) any person who sells or leases prerecorded video cassettes that are new or have not been used in Canada, other than a person who sells or leases such goods exclusively and directly to consumers other than to consumers who lease such goods to other persons;

"Minister" « ministre »

"Minister" means the Minister of National Revenue;

"mobile home" «maison mobile»

"mobile home" means a trailer unit not less than three metres wide by eight metres long, equipped with complete plumbing, electrical and heating facilities and designed to be towed on its own chassis to a building site for installation on a foundation and connection to service facilities at that site and to be used for residential, commercial, educational, institutional or industrial purposes, but does not include any free-standing appliances or furniture sold with the unit or any travel trailer, motor home, camping trailer or other vehicle or trailer for recreational use;

"modular building unit" «bâtiment modulaire»

"modular building unit" means a building component or unit, the manufacture and assembly of which is completed or substantially completed before delivery to a construction site, that is designed for installation on a foundation and is composed of at least one room or area with finished walls, a finished floor and a finished ceiling, including installed plumbing, heating and electrical equipment appropriate to that room or area, and that, when installed on a foundation at the site, with or without other similarly manufactured and assembled components or units, forms a complete residential, commercial, educational, institutional or industrial building, but does not include any freestanding appliances or furniture sold with the unit;

"municipality" «municipalité»

"municipality" means

(a) an incorporated city, town, village, metropolitan authority, township, district, county or rural municipality or other incorporated municipal body however designated, or

(b) such other local authority as the Minister may determine to be a municipality for the purposes of this Act;

"operator" « exploitant »

"operator" of a duty free shop means the person operating the duty free shop who is licensed as a wholesaler under Part VI and is deemed by subsection 55(2) to be a bona fide wholesaler or jobber;

"person" «personne»

"person" means an individual, partnership, corporation, trust, estate, or a body that is a society, union, club, association, commission or other organization of any kind whatever;

"prescribed" «prescrit»

"prescribed" means

(a) in the case of a form, the information to be given on a form or the manner of filing a form, prescribed by the Minister, and

(b) in any other case, prescribed by regulation or determined in accordance with rules prescribed by regulation;

"record" « registre »

"record" includes an account, an agreement, a book, a chart or table, a diagram, a form, an image, an invoice, a letter, a map, a memorandum, a plan, a return, a statement, a telegram, a voucher, and any other thing containing information, whether in writing or in any other form;

"stamp" or "excise stamp" «timbre» ou «timbre d'accise»

"stamp" or "excise stamp" means a stamp prepared for the purposes of this Act pursuant to a direction of the Minister under section 60;

"telecommunication" [Repealed, 1993, c. 38, s. 86]

"this Act" « présente loi »

"this Act" means this Act except Part IX and Schedules V to X;

"tobacco stick" « bâtonnet de tabac »

"tobacco stick" has the meaning assigned by section 6 of the Excise Act.

Application to territories

(2) For the purposes of this Act, the expression "Her Majesty in right of a province" includes the governments of the Yukon Territory, the Northwest Territories and Nunavut and the expression "legislature of any province" includes the Council of the Yukon Territory, the Council of the Northwest Territories and the Legislative Assembly of Nunavut.

Arm's length

(2.1) For the purposes of this Act,

(a) related persons shall be deemed not to deal with each other at arm's length; and

(b) it is a question of fact whether persons not related to each other were, at any particular time, dealing with each other at arm's length.

Related persons

(2.2) For the purposes of this Act, persons are related to each other if they are related persons within the meaning of subsections 251(2) to (6) of the Income Tax Act, except that

(a) references in those subsections to "corporation" shall be read as references to "corporation or partnership"; and

(b) references in those subsections to "shares" or "shareholders" shall, in respect of a partnership, be read as references to "rights" or "partners", respectively.

Importer deemed manufacturer or producer

(3) For the purposes of this Act, a person who is a manufacturer or producer within the meaning of paragraph (d), (i) or (j) of the definition of that term in subsection (1), other than a member of a class of small manufacturer or producer that is exempted by regulations made under subsection 54(2) from the requirement of subsection 54(1) to apply for a licence, and who imports into Canada

(a) cosmetics,

(b) [Repealed, R.S., 1985, c. 12 (4th Supp.), s. 1]

(c) goods enumerated in Schedule III.1, or

(d) prerecorded video cassettes that are new or have not been used in Canada

shall be deemed to be the manufacturer or producer in Canada thereof and not the importer thereof and the goods shall be deemed to be goods produced or manufactured in Canada and not imported goods.

Goods deemed not to be imported

(4) For the purposes of this Act, goods imported into Canada by a person who is a manufacturer or producer within the meaning of paragraph (f) of the definition of that term in subsection (1), other than a member of a class of small manufacturer or producer that is exempted by virtue of regulations made under subsection 54(2) from the requirement of subsection 54(1) to apply for a licence, that are prepared, as described in that paragraph, by or on behalf of that person in Canada for sale shall be deemed to be goods produced or manufactured in Canada and not imported goods.

Importer deemed manufacturer or producer

(4.1) For the purposes of this Act, a person who is a manufacturer or producer within the meaning of paragraph (g) of the definition of that term in subsection (1), other than a member of a class of small manufacturer or producer that is exempted by virtue of regulations made under subsection 54(2) from the requirement of subsection 54(1) to apply for a licence, and who imports new motor vehicles designed for highway use, or chassis therefor, into Canada shall be deemed to be the manufacturer or producer in Canada thereof and not the importer thereof and the vehicles or chassis shall be deemed to be goods produced or manufactured in Canada and not imported goods.

Goods deemed not to be imported

(4.2) For the purposes of this Act, new motor vehicles designed for highway use, and chassis therefor, imported into Canada that are sold by a person who is a manufacturer or producer within the meaning of paragraph (h) of the definition of that term in subsection (1), other than a member of a class of small manufacturer or producer that is exempted by virtue of regulations made under subsection 54(2) from the requirement of subsection 54(1) to apply for a licence, shall be deemed to be goods produced or manufactured in Canada and not imported goods.

Idem

(5) For the purposes of this Act, a licensed wholesaler who gives away without charge, as free samples, replacement goods or parts or otherwise, goods on which taxes have not been paid under this Act is deemed to have retained the goods for his own use, unless

(a) he gives them away as free replacement goods or parts under a written warranty of the manufacturer of the goods to be replaced or of the goods into which the parts are to be incorporated; and

(b) the amount, if any, charged for the warranty is included in the sale price charged by the manufacturer for the goods to be replaced or the goods into which the parts are to be incorporated or, if those goods are imported goods, in the duty paid value thereof.

Retroactive effect

(5.1) For the purposes of this Act, a determination under paragraph (b) of the definition "municipality" in subsection (1) shall, if it so provides, be retroactive and be deemed to have come into force on a day prior to the day on which it is made, which prior day shall not be more than four years before the day on which the determination is made.

References to tax etc. under Act

(6) Any reference in a regulation or order made before 1991 under an Act of Parliament to a refund, remission or other relief from or in respect of a tax, duty, excise or levy under

(a) the Excise Tax Act,

(b) the laws relating to customs or customs duties, or

(c) the laws relating to excise or duties of excise

shall, except where the regulation or order otherwise expressly provides, be deemed not to include a reference to a refund, remission or other relief from the tax imposed under Part IX.

Atlantic Provinces markings

(7) For the purposes of Parts III and VII and Schedule II, manufactured tobacco that is marked or stamped "ATLANTIC" or "ATLANTIQUE" to indicate that it is intended for retail sale in the Provinces of Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland shall be deemed not to be marked or stamped in accordance with a statute of the Province of Nova Scotia or New Brunswick to indicate that it is intended for retail sale in that province.

R.S., 1985, c. E-15, s. 2; R.S., 1985, c. 15 (1st Supp.), s. 1, c. 7 (2nd Supp.), s. 1, c. 12 (4th Supp.), s. 1; 1990, c. 45, s. 1; 1993, c. 25, s. 54, c. 28, s. 78, c. 38, s. 86; 1994, c. 29, s. 1; 1998, c. 19, s. 275; 1999, c. 17, s. 145, c. 28, s. 158, c. 31, s. 247(F); 2000, c. 30, s. 2.

PART I
INSURANCE PREMIUMS OTHER THAN MARINE

Definitions

3. In this Part,

"exchange" «Bourse»

"exchange" means a group of persons formed for the purpose of exchanging reciprocal contracts of indemnity or inter-insurance with each other through the same attorney;

"insurer" «assureur»

"insurer" means any corporation incorporated for the purpose of carrying on the business of insurance, any association of persons formed on the plan known as Lloyds whereby each associate underwriter becomes liable for a stated, limited or proportionate part of the whole amount insured under a contract of insurance, and any exchange;

"net premiums" «primes nettes»

"net premiums" means the gross premiums paid or payable under a contract of insurance, less dividends received or receivable in respect of the contract and less premiums returned on cancellation of the contract.

"Superintendent" [Repealed, 1999, c. 17, s. 146]

R.S., 1985, c. E-15, s. 3; R.S., 1985, c. 18 (3rd Supp.), s. 35; 1999, c. 17, s. 146.

Tax on premiums in respect of insurance effected outside Canada

4. (1) Every person resident in Canada by whom or on whose behalf a contract of insurance, other than a contract of reinsurance, is entered into or renewed against a risk ordinarily within Canada at the time the contract is entered into or renewed,

(a) with

(i) any insurer not incorporated under the laws of Canada or of any province or not formed in Canada, or

(ii) any exchange having its chief place of business outside Canada or having a principal attorney-in-fact whose chief place of business is outside Canada,

that at the time the contract is entered into or renewed is not authorized under the laws of Canada or of any province to transact the business of insurance, or

(b) with any insurer that at the time the contract is entered into or renewed is authorized under the laws of Canada or of any province to transact the business of insurance, if the contract is entered into or renewed through a broker or agent outside Canada,

shall, on or before April 30 in each year, pay to the Minister, in addition to any other tax payable under any other law, a tax of ten per cent on the net premiums paid or payable during the immediately preceding calendar year in respect of that insurance.

Application

(2) Subsection (1) does not apply to

(a) any contract of life insurance, personal accident insurance, sickness insurance or insurance against marine risks, or any contract of insurance against nuclear risks to the extent that the insurance against nuclear risks is not, in the opinion of the Commissioner, available within Canada; or

(b) any other contract of insurance entered into after February 19, 1973 to the extent that the insurance is not, in the opinion of the Commissioner, available within Canada.

Residence of corporation

(3) For the purposes of this section, every corporation carrying on business in Canada shall be deemed to be a person resident in Canada.

Through whom contract made

(4) Where a contract of insurance is entered into or renewed through more than one broker or agent, or where payment of the premium or any part of the premium thereon is effected through more than one broker or agent, the contract shall, for the purposes of this Part, be deemed to have been entered into or renewed, as the case may be, through the broker or agent directly retained or instructed by the insured and not through any other broker or agent.

R.S., 1985, c. E-15, s. 4; 1999, c. 17, s. 147.

Returns

5. (1) Every person to whom section 4 applies shall, on or before April 30 in each year, make a return in writing to the Minister stating, with respect to each contract of insurance entered into or renewed by him or on his behalf during the immediately preceding calendar year and on which the net premiums are taxable under section 4,

(a) the name of the insurer;

(b) the amount of the insurance;

(c) the net premiums paid or payable during the immediately preceding calendar year; and

(d) if the contract was entered into or renewed as described in paragraph 4(1)(b), the name and address of the broker or agent outside Canada through whom the contract was entered into or renewed.

Return by broker or agent

(2) Every person who, acting as a broker or agent, obtains, effects or places or assists in obtaining, effecting or placing any contract of insurance entered into or renewed as described in paragraph 4(1)(a), and on which the net premiums are taxable under section 4, shall, on or before March 15 in each year, make a return in writing to the Minister stating, with respect to each contract so entered into or renewed during the immediately preceding calendar year, the name and address of the person resident in Canada by whom or on whose behalf the contract was entered into or renewed and the net premiums paid or payable during that year.

Return by insurer

(3) Every insurer that enters into or renews a contract of insurance as described in paragraph 4(1)(b), and on which the net premiums are taxable under section 4, shall, on or before March 15 in each year, make a return in writing to the Minister stating, with respect to each contract so entered into or renewed during the immediately preceding calendar year,

(a) the name and address of each person resident in Canada with whom or on whose behalf the contract was entered into or renewed;

(b) the net premiums paid or payable during the immediately preceding calendar year; and

(c) the name and address of the broker or agent outside Canada through whom the contract was entered into or renewed.

R.S., 1985, c. E-15, s. 5; R.S., 1985, c. 7 (2nd Supp.), s. 2.

Examination of books and records

6. The Commissioner or any officer or employee of the Agency appointed by the Commissioner may visit the office of any insurer, broker or agent and examine their books and records for the purpose of verifying any return required by this Part, and the Commissioner and that officer or employee have a right of access to those books and records at all reasonable hours.

R.S., 1985, c. E-15, s. 6; 1992, c. 1, s. 64; 1999, c. 17, s. 148.

Penalty and interest for default

7. (1) Every person who refuses or neglects to make a return as required by subsection 5(1) or neglects to pay some or all of the tax imposed by section 4 is liable to a penalty of five per cent of the amount of tax unpaid at the expiration of the time for filing the return together with interest on the amount unpaid calculated at the prescribed rate from April 30 in the year in which that amount is payable to the day of payment.

Idem

(2) Every person who refuses or neglects to make a return as required by subsection 5(2) or (3) is liable to a penalty of ten dollars for each day of default or fifty dollars, whichever is the lesser.

R.S., 1985, c. E-15, s. 7; R.S., 1985, c. 7 (2nd Supp.), s. 3.

PART II
AIR TRANSPORTATION TAX

Interpretation

Definitions

8. In this Part,

"air carrier" «transporteur aérien»

"air carrier" means a person who provides transportation of a person by air;

"certified air carrier" «transporteur aérien titulaire de certificat»

"certified air carrier" means

(a) an air carrier who is authorized by the Canadian Transportation Agency under Part II of the Canada Transportation Act to operate a domestic service or an international service, and

(b) an air carrier, other than an air carrier described in paragraph (a), who, personally or by agent, sells in Canada transportation of a person by air that is to be provided in whole or in part by an air carrier described in paragraph (a);

"emplanement" «embarquement»

"emplanement" does not include an emplanement resulting from a landing of an aircraft made solely to obtain ground services for the aircraft;

"licensed air carrier" «transporteur aérien titulaire de licence»

"licensed air carrier" means a certified air carrier to whom a licence has been granted under section 17;

"tax" «taxe»

"tax" means the air transportation tax imposed under this Part;

"taxation area" «zone de taxation»

"taxation area" means

(a) Canada,

(b) the United States (except Hawaii), and

(c) the Islands of St. Pierre and Miquelon.

R.S., 1985, c. E-15, s. 8; R.S., 1985, c. 15 (1st Supp.), s. 2, c. 28 (3rd Supp.), s. 287; 1996, c. 10, s. 225.

Her Majesty

Binding on Her Majesty

9. This Part is binding on Her Majesty in right of Canada or a province.

R.S., c. E-13, s. 9.

Tax Imposed

Tax imposed

10. (1) There shall be imposed, levied and collected an air transportation tax, determined under section 11, on each amount paid or payable in Canada for transportation of a person by air where that transportation begins at a point in the taxation area and ends at a point in the taxation area.

Idem

(2) There shall be imposed, levied and collected an air transportation tax, determined under section 11, on each amount paid or payable outside Canada for the transportation of a person by air where that transportation

(a) begins at a point in the taxation area and ends at a point in the taxation area, and

(b) includes an emplanement by the person on an aircraft at an airport in Canada on a specific flight having as a destination an airport in the taxation area outside Canada and subsequent deplanement by the person from the flight at an airport outside Canada,

payable by the person at the time when, in respect of the transportation, he emplanes at the airport in Canada described in paragraph (b) on the aircraft therein described, except where the air transportation tax has been paid before that time to a licensed air carrier or his agent and evidence of the prepayment of tax is submitted by the person, in a manner and form and to a member of a class of persons prescribed by regulation of the Governor in Council.

Transportation by air

(3) For the purposes of subsection (1), transportation by air begins at a point in the taxation area and ends at a point in the taxation area if the transportation does not include a departure, destination or intermediate stop, other than a transfer stop, outside the taxation area.

Idem

(4) For the purposes of subsection (2), transportation by air begins at a point in the taxation area and ends at a point in the taxation area if the transportation

(a) does not include a departure, destination or intermediate stop, other than a transfer stop, outside the taxation area; and

(b) includes at least one departure from a point in Canada, other than a departure resulting from a transfer stop.

R.S., 1985, c. E-15, s. 10; R.S., 1985, c. 15 (1st Supp.), s. 3.

Amount of tax

11. (1) Subject to subsections (2) and (2.1), the tax imposed under subsection 10(1) or (2) on each amount paid or payable for transportation of a person by air shall be an amount that is the lesser of

(a) the aggregate of

(i) the amount that is

(A) 4% of each amount paid or payable, if the amount is paid or payable in Canada after December 31, 1997 for transportation of a person by air that begins after February 28, 1998,

(B) 4% of each amount paid or payable, if the amount is paid or payable outside Canada after December 31, 1997 and the first emplanement by the person, as described in paragraph 10(2)(b), occurs after February 28, 1998, or

(C) 7% of each amount paid or payable, in any other case, and

(ii) $6 or such lesser amount as may, for the purposes of this subparagraph, be prescribed by order of the Governor in Council on the recommendation of the Minister of Transport, and

(b) such amount as may, for the purposes of this subsection, be prescribed by order of the Governor in Council on the recommendation of the Minister of Transport.

Charter flights

(2) Where the amount paid or payable in Canada for air transportation is for transportation by an aircraft that has been chartered for the purpose by one or more charterers, the tax imposed under subsection 10(1) on the amount paid or payable to a certified air carrier by each charterer shall be an amount that is the lesser of

(a) the aggregate of

(i) the amount that is

(A) 4% of each amount paid or payable, if the amount is paid or payable after December 31, 1997 to a certified air carrier by the charterer for transportation of a person by air that begins after February 28, 1998, or

(B) 7% of each amount paid or payable to a certified air carrier by the charterer, in any other case, and

(ii) the amount that is

(A) $1.50 in respect of each emplanement, pursuant to the charter agreement of that charterer, on the aircraft by any person, if the amount is paid or payable to a certified air carrier by the charterer after December 31, 1997 for transportation of the person by air that begins after February 28, 1998, or

(B) $3 in respect of each emplanement, pursuant to the charter agreement of that charterer, on the aircraft by any person, in any other case, and

(b) the aggregate of such amount as may, for the purposes of this subsection, be prescribed by order of the Governor in Council on the recommendation of the Minister of Transport, in respect of each emplanement, pursuant to the charter agreement of that charterer, on the aircraft by any person.

Amount of tax imposed on amount paid outside Canada where tax payable in Canada

(2.1) Where the tax imposed under subsection 10(2) on an amount paid or payable outside Canada for transportation of a person by air is payable by the person at the time he emplanes at an airport in Canada and evidence of the amount paid or payable for the transportation is not submitted, in the manner and form prescribed by regulation of the Governor in Council, by the person to the licensed air carrier required by this Part to collect the tax in Canada, and an amount is prescribed by order of the Governor in Council pursuant to paragraph (1)(b), the tax payable by the person shall be the amount so prescribed.

When tax not payable

(3) The tax imposed by subsection 10(1), as determined under subsection (1), on each amount paid or payable for transportation of a person by air is not payable in the case of transportation purchased as part of a continuous journey where

(a) the journey includes a charter flight in respect of which tax is imposed under section 10 or 12; and

(b) evidence of the continuous journey is submitted by the person to the licensed air carrier or his agent from whom the transportation by air is purchased.

R.S., 1985, c. E-15, s. 11; R.S., 1985, c. 15 (1st Supp.), s. 4, c. 7 (2nd Supp.), s. 4, c. 42 (2nd Supp.), s. 1, c. 12 (4th Supp.), s. 2; 1990, c. 45, s. 2; 1994, c. 29, s. 2; 1998, c. 21, s. 84.

Specific tax

12. (1) There shall be imposed, levied and collected an air transportation tax, determined under section 13, on each amount paid or payable in Canada for transportation of a person by air where that transportation begins at a point in the taxation area and ends at a point outside the taxation area.

Idem

(2) There shall be imposed, levied and collected an air transportation tax, determined under section 13, on each amount paid or payable outside Canada for the transportation of a person by air where such transportation

(a) begins at a point in the taxation area and ends at a point outside the taxation area, and

(b) includes an emplanement by the person on an aircraft at an airport in Canada on a specific flight having as a destination an airport outside Canada and subsequent deplanement by the person from the flight at an airport outside Canada,

payable by the person at the time when, in respect of the transportation, he emplanes at the airport in Canada described in paragraph (b) on the aircraft therein described, except where the air transportation tax has been paid before that time to a licensed air carrier or his agent and evidence of the prepayment of tax is submitted by the person, in a manner and form and to a member of a class of persons prescribed by regulation of the Governor in Council.

Transportation by air

(3) For the purposes of subsection (1), transportation by air begins at a point in the taxation area and ends at a point outside the taxation area if the transportation or any part thereof includes at least one departure from a point in the taxation area, other than a departure resulting from a transfer stop, to a destination outside the taxation area.

Idem

(4) For the purposes of subsection (2), transportation by air begins at a point in the taxation area and ends at a point outside the taxation area if the transportation or any part thereof includes at least one departure from a point in Canada, other than a departure resulting from a transfer stop, to a destination outside the taxation area, whether or not there are any intermediate stops.

R.S., 1985, c. E-15, s. 12; R.S., 1985, c. 15 (1st Supp.), s. 5.

Amount of tax

13. (1) Subject to subsection (2), the tax imposed under subsection 12(1) for transportation of a person by air shall be

(a) an amount that is the lesser of

(i) the amount of

(A) $30, if the amount paid or payable for transportation of the person by air is paid or payable after December 31, 1997 for transportation of the person by air that begins after February 28, 1998, or

(B) $55, in any other case, and

(ii) such amount as may, for the purposes of this subsection, be prescribed by order of the Governor in Council on the recommendation of the Minister of Transport; or

(b) fifty per cent of the amount provided in paragraph (a) when the person is a child under twelve years of age and is being transported at a fare reduced fifty per cent or more below the applicable fare.

Charter flights

(2) Where the amount paid or payable in Canada for air transportation is for transportation by an aircraft that has been chartered for the purpose by one or more charterers, the tax imposed under subsection 12(1) on the amount paid or payable to a certified air carrier by each charterer shall be an amount that is the aggregate of

(a) the lesser of

(i) the amount of

(A) $30, if the amount paid or payable for the transportation of a person by air is paid or payable to a certified air carrier by the charterer after December 31, 1997 for transportation of the person by air that begins after February 28, 1998, or

(B) $55, in any other case, and

(ii) such amount as may, for the purposes of this subsection, be prescribed by order of the Governor in Council on the recommendation of the Minister of Transport,

in respect of each emplanement, pursuant to the charter agreement of that charterer, on the aircraft by a person, other than a person described in paragraph (b); and

(b) fifty per cent of the amount provided in paragraph (a) in respect of each emplanement, pursuant to the charter agreement of that charterer, on the aircraft by a child who is under twelve years of age and is being transported at a fare reduced fifty per cent or more below the applicable fare.

Definition of "emplanement"

(2.1) For the purposes of subsection (2), "emplanement" means an emplanement by a person at an airport in Canada on a specific flight that has as a destination an airport outside Canada and from which the person deplanes at an airport outside Canada.

Amount of tax

(2.2) The tax imposed under subsection 12(2) for transportation of a person by air shall be

(a) where the first emplanement of the person occurs at an airport in Canada,

(i) an amount that is the lesser of

(A) the amount of

(I) $30, if the amount paid or payable for the transportation is paid or payable after December 31, 1997 and the first emplanement by the person, within the meaning of subsection (2.1), occurs after February 28, 1998, or

(II) $55, in any other case, and

(B) such amount as may, for the purposes of this paragraph, be prescribed by order of the Governor in Council on the recommendation of the Minister of Transport, or

(ii) 50% of the amount provided in subparagraph (i) where the person is a child under twelve years of age and is being transported at a fare reduced 50% or more below the applicable fare; and

(b) in any other case,

(i) an amount that is the lesser of

(A) the amount of

(I) $15, if the amount paid or payable for the transportation is paid or payable after December 31, 1997 and the first emplanement by the person, within the meaning of subsection (2.1), occurs after February 28, 1998, or

(II) $27.50, in any other case, and

(B) such amount as may, for the purposes of this paragraph, be prescribed by order of the Governor in Council on the recommendation of the Minister of Transport, or

(ii) 50% of the amount provided in subparagraph (i) where the person is a child under twelve years of age and is being transported at a fare reduced 50% or more below the applicable fare.

Non-application

(3) Subsections 12(1) and (2) do not apply in respect of the transportation of a person by air at a fare ninety per cent or more below the applicable fare.

R.S., 1985, c. E-15, s. 13; R.S., 1985, c. 15 (1st Supp.), s. 6, c. 12 (4th Supp.), s. 3; 1990, c. 45, s. 3; 1994, c. 29, s. 3; 1995, c. 36, s. 1; 1998, c. 21, s. 85.

More than one amount payable

13.1 (1) Notwithstanding sections 11 and 13 but subject to subsection 11(3) and subsection (2) of this section, where two or more amounts are paid or payable at the same time for transportation of a person by air on a continuous journey,

(a) the total of the taxes imposed on all such amounts under subsection 10(1) or (2), determined under subsection 11(1), shall not exceed the lesser of

(i) the amount that is

(A) the total of 4% of the aggregate of all such amounts and $3, if the amount paid or payable for the transportation is paid or payable after December 31, 1997 for transportation of the person by air that begins after February 28, 1998, or

(B) the total of 7% of the aggregate of all such amounts and $6, in any other case, and

(ii) the amount, if any, prescribed by order of the Governor in Council under paragraph 11(1)(b);

(b) the total of the taxes imposed on all such amounts under subsections 10(1) and 12(1), determined under subsections 11(1) and 13(1), as applicable, shall not exceed the amount determined under subsection 13(1) in respect of any such amount in respect of which that subsection applies; and

(c) the total of the taxes imposed on all such amounts under subsections 10(2) and 12(2), determined under subsections 11(1) and 13(2.2), as applicable, shall not exceed the largest amount determined under subsection 13(2.2) in respect of any such amount.

Restriction on reduction of tax

(2) Subsection (1) does not apply to reduce any tax imposed under this Part in respect of transportation of a person by air unless the licensed air carrier or the carrier's agent from whom the transportation is purchased records on each ticket issued at the same time the following information:

(a) ticket numbers, including air carrier codes, for all flights comprising the continuous journey; and

(b) flight numbers for all flights comprising the continuous journey.

R.S., 1985, c. 15 (1st Supp.), s. 7, c. 7 (2nd Supp.), s. 5, c. 12 (4th Supp.), s. 4; 1990, c. 45, s. 4; 1994, c. 29, s. 4; 1998, c. 21, s. 86.

When and by whom tax payable

14. The tax on each amount paid or payable in Canada for transportation of a person by air is payable

(a) at the time when the amount is so paid or becomes payable and in any case prior to the provision of the transportation; and

(b) by the person making the payment.

R.S., c. E-13, s. 12; 1976-77, c. 15, s. 3.

Employees of foreign country

15. This Part does not apply in the case of any amount paid for transportation by air of a person described in section 2 of Part II of Schedule III.

R.S., c. E-13, s. 13.

Amount deemed paid in Canada

16. (1) Where an amount is paid or payable outside Canada for the transportation of a person by air

(a) by transmission from within Canada to a place outside Canada, by means of telegraph or mail, of cash, cheque, postal telegram, money order or any similar draft to a ticket office, travel agency, air carrier or any representative of any of them,

(b) by delivery of the amount to an agency located within Canada for transmission to a ticket office, travel agency, air carrier or any representative of any of them located in any place outside Canada, or

(c) by any other arrangement with a person outside Canada for the benefit or convenience of a person in Canada,

the amount shall, for the purposes of this Part, be deemed to be an amount paid or payable in Canada and not outside Canada.

Charter flights

(2) Where an amount is paid or payable outside Canada for the charter of an aircraft for the transportation of a person by air and the transportation begins at a point in Canada, the amount shall, for the purposes of this Part, be deemed to be an amount paid or payable in Canada and not outside Canada.

R.S., c. E-13, s. 14.

Elimination of air transportation tax

16.1 No tax shall be imposed, levied or collected on any amount paid or payable for the transportation of a person by air that

(a) in the case of tax imposed under subsection 10(1) or 12(1), begins after October 31, 1998; or

(b) in the case of tax imposed under subsection 10(2) or 12(2), does not include an emplanement of the person, within the meaning of subsection 13(2.1), before November 1, 1998.

1996, c. 20, s. 104; 1998, c. 21, s. 87.

Licences

Duty to apply for licence

17. (1) Subject to this section, every certified air carrier, other than an air carrier that provides only air transportation that is exempt from the operation of this Part pursuant to paragraph 21(d), shall make an application in the prescribed form to the Minister for a licence for the purposes of this Part.

Granting of licence

(2) The Minister may grant a licence to any person applying therefor under subsection (1).

Cancellation

(3) 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.

Application

(4) Subsection (1) applies only to a certified air carrier that provides air transportation before November 1, 1998.

R.S., 1985, c. E-15, s. 17; R.S., 1985, c. 7 (2nd Supp.), s. 6; 1996, c. 20, s. 105; 1998, c. 21, s. 88.

Collection of Tax

Duty of licensed air carrier

18. (1) Every licensed air carrier is an agent of the Minister and as such shall, as provided in this section,

(a) levy and collect any taxes imposed by this Part for the transportation of a person by air; and

(b) make adjustments in or refund any portion of the tax paid on the transportation of a person by air that has not been provided or only partially provided or any tax that has been collected in error by the licensed air carrier.

Collection of tax

(2) The tax imposed by this Part on each amount paid or payable in Canada for transportation of a person by air shall be collected by the licensed air carrier to whom payment for the transportation is made or is owing.

Idem

(3) The tax imposed by this Part on each amount paid or payable outside Canada for transportation of a person by air that is payable by the person at the time when he emplanes on an aircraft at an airport in Canada shall be collected by the licensed air carrier on whose aircraft the person emplanes, in this subsection referred to as the "emplaning air carrier", except where the air transportation tax has been paid before that time to a licensed air carrier or his agent and evidence of the prepayment of tax is submitted by the person to the emplaning air carrier in a manner and form prescribed by regulation of the Governor in Council.

Idem

(4) In the case of tax imposed by this Part on any amount paid or payable in Canada for transportation of a person by air, where the transportation of a person by air is being provided by several air carriers, one or more of whom are licensed, the tax, where applicable, shall be collected by the licensed air carrier who sells the transportation by air or, if the transportation is not sold by a licensed air carrier, by the first licensed air carrier who provides any part of the transportation.

Adjustments and refunds where tax reduced for continuous journey

(5) Where tax has been reduced pursuant to subsection 13.1(1) in respect of two or more amounts paid or payable at the same time for transportation of a person by air on a continuous journey, no adjustment in or refund of all or any portion of the tax paid shall be made unless all of the tickets purchased at the same time for the transportation are cancelled at the same time.

R.S., 1985, c. E-15, s. 18; R.S., 1985, c. 15 (1st Supp.), s. 8, c. 28 (3rd Supp.), s. 288.

Debt to Her Majesty

19. (1) Every person who, being required by or pursuant to this Part to collect an air transportation tax, fails to do so as required is liable to Her Majesty for the amount of the tax and that amount is recoverable in the Federal Court or in any other court of competent jurisdiction as a debt due to Her Majesty.

Persons deemed agents

(2) A person who, not being a licensed air carrier, sells in Canada transportation of a person by air that is to be provided in whole or in part by a licensed air carrier is, in respect of the payment for that transportation and for the purposes of this Part, the agent of the first licensed air carrier who provides the transportation by air or any part thereof, as the case may be, and that person shall levy and collect on behalf of that licensed air carrier the taxes imposed by this Part and transmit them to the licensed air carrier.

R.S., c. E-13, s. 16; R.S., c. 10(2nd Supp.), s. 64; 1974-75-76, c. 24, s. 5.

Penalty on Failure to File Return

Monthly return of taxes

20. (1) Every licensed air carrier that is required by this Part to collect tax shall make each month a true return, in the prescribed form and containing the prescribed information including statistical information relating to any tax not collected by the licensed air carrier during that period by reason of the prepayment thereof, of

(a) all amounts collected or collectible by the carrier by way of the tax imposed by this Part in the last preceding month; and

(b) all amounts collected, within or outside Canada by the carrier or the carrier's agent in the last preceding month,

(i) by way of the tax imposed by this Part on amounts paid or payable outside Canada for the transportation of a person by air, and

(ii) before the time that the person is required by subsection 10(2) or 12(2), as the case may be, to pay the tax.

Nil return

(2) Every licensed air carrier shall, if no amounts have been collected or are collectible as described in subsection (1) in the last preceding month, make a return as required by that subsection stating that fact.

Cessation of obligation

(2.1) No return is required under subsection (2) if the last preceding month is a month after October 31, 1998.

Alternate periods for making returns

(3) Notwithstanding subsections (1) and (2), the Minister may, by regulation,

(a) authorize any licensed air carrier to make a return in respect of any accounting period of not less than twenty-one days and not more than thirty-five days;

(b) authorize any licensed air carrier to make a return in respect of any period longer than one month but not longer than six months, if the amounts collected or collectible by the carrier by way of the tax imposed by this Part in the last preceding calendar year did not exceed four thousand eight hundred dollars; or

(c) authorize any licensed air carrier whose passenger air transportation service is predominantly limited to a seasonal period of operation to make a return in respect of any period longer than one month but not longer than six months, if the amounts collected or collectible by the carrier by way of the tax imposed by this Part in the equivalent period in the last preceding calendar year did not exceed an average of four hundred dollars per month throughout that equivalent period.

Date for filing and remittance

(4) Subject to subsection (8) and sections 20.1 and 79.2, the return required by this section shall be filed and the taxes that are collected or collectible by a licensed air carrier shall be remitted

(a) in a case where the return is required to be made in accordance with subsection (1) or (2), not later than the last day of the first month following the month to which the return relates;

(b) in a case where the return is authorized to be made in accordance with a regulation made under paragraph (3)(a), not later than the last day of the first authorized accounting period following the end of the accounting period to which the return relates; and

(c) in a case where the return is authorized to be made in accordance with a regulation made under paragraph (3)(b) or (c), not later than the last day of the first month following the end of the period to which the return relates.

Penalty and interest on default in remitting taxes

(5) Subject to subsections (6) to (9), a licensed air carrier that defaults in remitting tax within the time prescribed by subsection (4), in addition to the amount in default, shall pay

(a) in the case of tax required to be remitted not later than the last day of a month, a penalty of one-half of one per cent and interest at the prescribed rate, in respect of each month or fraction of a month between that day and the day on which the total tax, penalty and interest outstanding is remitted, calculated on the total tax, penalty and interest outstanding in that month or fraction of a month; and

(b) in the case of tax required to be remitted not later than the last day of an accounting period, a penalty of one-half of one per cent and interest at the prescribed rate, in respect of each accounting period or fraction of an accounting period between that day and the day on which the total tax, penalty and interest outstanding is remitted, calculated on the total tax, penalty and interest outstanding in that accounting period or fraction of an accounting period.

Minimum penalty and interest

(6) No penalty or interest is payable under subsection (5) if the licensed air carrier remits all taxes collected or collectible by the carrier under this Part and, at the time of the remittance, the total penalty and interest payable is less than ten dollars.

Time for paying penalty or interest

(7) A licensed air carrier that is liable to pay penalty or interest under subsection (5) shall pay the penalty or interest not later than the last day of the month or accounting period in respect of which the penalty or interest was calculated.

Extension

(8) The Minister may, before or after the expiration of the time prescribed by subsection (4), extend in writing the time for filing a return or remitting any tax, and where the Minister so extends the time,

(a) the return shall be filed or the tax shall be remitted within the time as so extended;

(b) interest accrues under subsection (5) in respect of the tax as if the time had not been so extended;

(c) no penalty accrues or shall be deemed to have accrued under subsection (5) in respect of the tax before the expiration of the time as so extended; and

(d) penalty accrues under subsection (5) in respect of a default in remitting the tax or any portion thereof within the time as so extended as if the default were a default referred to in that subsection.

Security

(9) Where the Minister holds security under section 80.1 for the remittance of any tax under this Part that is not remitted within the time prescribed by subsection (4),

(a) interest accrues under subsection (5) in respect of the tax from the expiration of that time; and

(b) penalty accrues under subsection (5) only if the total tax, penalty and interest outstanding, as calculated in respect of each month or accounting period or fraction of a month or accounting period during which the default continues, exceeds the value of the security at the time it is accepted by the Minister and, if accruing, the penalty shall be calculated only on the amount of the excess.

R.S., 1985, c. E-15, s. 20; R.S., 1985, c. 15 (1st Supp.), s. 9, c. 7 (2nd Supp.), s. 7, c. 12 (4th Supp.), s. 5; 1996, c. 20, s. 106; 1998, c. 21, s. 89.

Interpretation

20.1 (1) For the purposes of this section,

(a) a licensed air carrier's "instalment base"

(i) for a month is the lesser of

(A) the tax imposed by this Part that was collected or collectible by that carrier in that month, and

(B) the tax so collected or collectible in the last preceding month,

(ii) for an accounting period is the lesser of

(A) the tax imposed by this Part that was collected or collectible by that carrier in that accounting period, and

(B) the tax so collected or collectible in the last preceding accounting period, and

(iii) for any other period to which a return relates is the lesser of

(A) the tax imposed by this Part that was collected or collectible by that carrier in that period, and

(B) the tax so collected or collectible in the last preceding period multiplied by the ratio that the number of days in the period to which the return relates is to the number of days in the last preceding period; and

(b) a licensed air carrier is a "large taxpayer" at any particular time if

(i) the aggregate amount of taxes payable under Parts II.1, III, IV and VI, other than taxes payable in accordance with the Customs Act, and collected or collectible under this Part and Part II.2 by that licensed air carrier in the last preceding calendar year ending at least ninety days, or ninety-one days where that time falls in a leap year, before that time exceeded twelve million dollars, or

(ii) the licensed air carrier

(A) was, at any time in the last preceding calendar year ending at least ninety days, or ninety-one days where that time falls in a leap year, before that time, a member of a group of associated corporations (within the meaning of section 256 of the Income Tax Act) and the aggregate amount of taxes payable under Parts II.1, III, IV and VI, other than taxes payable in accordance with the Customs Act, and collected or collectible under this Part and Part II.2 by the group in that year exceeded twelve million dollars, and

(B) is not, at that time, authorized to make a return in accordance with a regulation made under paragraph 20(3)(b) or (c).

Instalment payments by large taxpayers

(2) A large taxpayer that is required to file a return and remit tax within the time prescribed by subsection 20(4) shall pay instalments on account of the tax in accordance with the following rules:

(a) in the case where the return is required to be made in accordance with subsection 20(1), the large taxpayer shall pay two instalments, each equal to one-half of the taxpayer's instalment base for the month in which the tax was collected or became collectible, the first to be paid not later than the last day of that month and the second not later than the fifteenth day of the next following month; and

(b) in the case where the return is authorized to be made in accordance with a regulation made under paragraph 20(3)(a), the large taxpayer shall pay two instalments, each equal to one-half of the taxpayer's instalment base for the accounting period to which the return relates, the first to be paid not later than the last day of that accounting period and the second not later than the fifteenth day of the next following accounting period.

Instalment payments by other licensed air carriers

(3) A licensed air carrier, other than a large taxpayer, that is required to file a return and remit tax within the time prescribed by subsection 20(4) shall pay an instalment on account of the tax in accordance with the following rules:

(a) in the case where the return is required to be made in accordance with subsection 20(1), the carrier shall pay an instalment, equal to the carrier's instalment base for the month in which the tax was collected or became collectible, not later than the twenty-first day of the next following month;

(b) in the case where the return is authorized to be made in accordance with a regulation made under paragraph 20(3)(a), the carrier shall pay an instalment, equal to the carrier's instalment base for the accounting period to which the return relates, not later than the twenty-first day of the next following accounting period; and

(c) in the case where the return is authorized to be made in accordance with a regulation made under paragraph 20(3)(b) or (c), the carrier shall pay an instalment, equal to the carrier's instalment base for the period to which the return relates, not later than the twenty-first day of the month next following the end of that period.

Penalty and interest on default by large taxpayer in paying instalment

(4) Subject to subsections (6) to (8), a large taxpayer that defaults in paying an instalment within the time prescribed by subsection (2) shall, in addition to the amount in default, pay in respect of the period between the end of that time and the end of the time prescribed for remittance of the tax on account of which the instalment was payable

(a) in the case of an instalment required to be paid not later than the last day of a month or an accounting period, a penalty of one-half of one per cent and interest at the prescribed rate, calculated on the amount by which

(i) one-half of the taxpayer's instalment base for that month or accounting period

exceeds

(ii) the aggregate of all taxes on account of which the instalment was payable that were remitted not later than that day; and

(b) in the case of an instalment required to be paid not later than the fifteenth day of a month or an accounting period, a penalty of one-quarter of one per cent and interest at one-half of the prescribed rate, calculated on the amount by which

(i) one-half of the taxpayer's instalment base for the last preceding month or accounting period

exceeds

(ii) the amount by which the aggregate of all taxes on account of which the instalment was payable that were remitted not later than that day exceeds the lesser of

(A) the aggregate of all taxes on account of which the instalment was payable that were remitted not later than the last day of the last preceding month or accounting period, and

(B) one-half of the taxpayer's instalment base for the last preceding month or accounting period.

Penalty and interest on default by other licensed air carriers in paying instalment

(5) Subject to subsections (6) to (8), a licensed air carrier that defaults in paying an instalment within the time prescribed by subsection (3) shall, in addition to the amount in default, pay in respect of the period between the end of that time and the end of the time prescribed for remittance of the tax on account of which the instalment was payable

(a) in the case of an instalment required by paragraph (3)(a) or (b) to be paid not later than the twenty-first day of a month or an accounting period, a penalty of one-sixth of one per cent and interest at one-third of the prescribed rate, calculated on the amount by which

(i) the carrier's instalment base for the last preceding month or accounting period

exceeds

(ii) the aggregate of all taxes on account of which the instalment was payable that were remitted not later than that day; and

(b) in the case of an instalment required by paragraph (3)(c) to be paid not later than the twenty-first day of a month next following the end of a period, a penalty of one-sixth of one per cent and interest of one-third of the prescribed rate, calculated on the amount by which

(i) the carrier's instalment base for that period

exceeds

(ii) the aggregate of all taxes on account of which the instalment was payable that were remitted not later than that day.

Minimum penalty and interest

(6) No penalty or interest is payable under subsection (4) or (5) if the large taxpayer or other licensed air carrier liable to pay the instalment remits all taxes collected or collectible by the taxpayer or carrier under this Part and, at the time of the remittance, the total penalty and interest payable in respect of the instalment is less than five dollars and in respect of all those taxes is less than ten dollars.

Time for paying penalty or interest

(7) A large taxpayer or other licensed air carrier that is liable to pay penalty or interest under subsection (4) or (5) in respect of a default in paying an instalment shall pay the penalty or interest within the time prescribed by subsection 20(4) for the remittance of the tax on account of which the instalment is payable.

Extension

(8) The Minister may, before or after the expiration of the time prescribed by subsection (2) or (3), extend in writing the time for paying an instalment, for any period within the time prescribed by subsection 20(4) for the remittance of the tax on account of which the instalment is payable, and where the Minister so extends the time

(a) the instalment shall be paid within the time as so extended;

(b) interest accrues under subsection (4) or (5), as the case may be, in respect of the instalment as if the time had not been so extended;

(c) no penalty accrues or shall be deemed to have accrued under subsection (4) or (5), as the case may be, in respect of the instalment before the expiration of the time as so extended; and

(d) penalty accrues under subsection (4) or (5), as the case may be, in respect of a default in paying an instalment within the time as so extended as if the default were a default referred to in that subsection.

R.S., 1985, c. 12 (4th Supp.), s. 5; 1999, c. 31, s. 247(F).

General

Prepaid amounts

20.2 (1) For greater certainty, amounts collected as described in paragraph 20(1)(b) shall be deemed to be sums payable under this Act.

Records and books of account

(2) Each licensed air carrier that is required to make a return of the amounts described in paragraph 20(1)(b) shall keep records and books of account in such form and containing such information as will enable the amount of tax or other sums that have been paid to or collected by the carrier or the carrier's agent to be determined and, for the purposes of this subsection, subsections 98(2.01), (2.1) and (3) and 100(2) apply, with such modifications as the circumstances require, as if the records and books of account were required to be kept by the carrier pursuant to subsection 98(1).

R.S., 1985, c. 12 (4th Supp.), s. 6; 1998, c. 19, s. 276.

Regulations

21. The Governor in Council may by regulation

(a) prescribe, for those cases where the amount charged for transportation by air includes the transportation of persons and goods by air, the manner in which and by whom the amount charged shall be apportioned between the transportation by air of those persons and the transportation by air of those goods, for the purposes of the tax imposed under sections 10 to 12;

(b) prescribe, for those cases where the amount charged for transportation of a person by air provides him with transportation and other services or goods, the manner in which and by whom the amount charged shall be apportioned between the transportation by air of that person and the provision of the other services and goods, for the purposes of the tax imposed under sections 10 to 12;

(c) prescribe the manner and form in which and the class of persons to whom evidence of prepayment of any tax imposed under this Part shall be submitted;

(c.1) prescribe the manner and form in which evidence of an amount paid or payable for transportation of a person by air shall be submitted;

(d) exempt from the operation of this Part the transportation of a person by air on any classes or groups of air services, air carriers or aircraft;

(e) reduce the amount of the tax paid or payable in Canada under this Part in respect of transportation of a person by air, or remove that tax, for the reduction or avoidance of double taxation by Canada and a foreign country in respect of that transportation;

(f) vary the requirements of section 20 with respect to returns and the time of remitting for licensed air carriers who are authorized by the Canadian Transportation Agency to operate international charter flights from Canada, or exempt those carriers from the provisions of that section with respect to returns, subject to such terms and conditions as the Governor in Council considers to be in the public interest;

(g) prescribe, in cases where an air carrier provides transportation of a person by air on credit, the time when and the place where the amount payable for that transportation is deemed to be paid or payable for the purposes of this Part; and

(h) provide generally for the carrying out of the provisions of this Part.

R.S., 1985, c. E-15, s. 21; R.S., 1985, c. 15 (1st Supp.), s. 10, c. 28 (3rd Supp.), s. 289; 1996, c. 10, s. 226.

PART II.1
TELECOMMUNICATION PROGRAMMING SERVICES TAX

Interpretation

Definitions

21.1 (1) In this Part,

"amount charged" «montant exigé»

"amount charged", in respect of a taxable service, means any amount paid or payable by a person for the taxable service, before any amount paid or payable in respect of any tax under this Part or imposed under an Act of the legislature of a province respecting retail sales tax is added thereto;

"broadcasting" «radiodiffusion»

"broadcasting" means any radiocommunication in which the transmissions are intended for direct reception by the general public;

"licensee" «titulaire de licence» ou «titulaire»

"licensee" means any person to whom a licence has been issued under section 21.18 and includes any person who is required by section 21.17 to apply for a licence;

"programming service" «service de programmation»

"programming service" means any presentation of sound or visual matter of a nature or kind broadcast by radio or television stations that is designed to inform, enlighten or entertain;

"small undertaking" «entreprise restreinte»

"small undertaking" means

(a) a person who provides a taxable service exclusively in a place to which admission is granted to persons for the purpose of the presentation to those persons of a programming service by means of telecommunication on payment of a charge or fee through the sale of a ticket or any similar means of admission, or

(b) a person who, in any month, provides a taxable service to not more than two hundred persons, but does not include a person who, in any month in the year preceding that month, has provided a taxable service to more than two hundred persons;

"taxable service" «service taxable»

"taxable service" means

(a) the provision, by means of telecommunication, to the general public or any portion thereof, of any programming service,

(b) the commencement or cessation of the provision of a programming service referred to in paragraph (a),

(c) the provision of any instrument, device, equipment or apparatus or any part thereof, other than a television receiver, that is

(i) used in conjunction with the reception of a programming service referred to in paragraph (a), and

(ii) provided by the person providing the programming service or by any person authorized or designated by him for the purpose or acting on his behalf or by any person related to him,

if the person providing the programming service requires that the instrument, device, equipment, apparatus or part be acquired exclusively from him or any other person referred to in subparagraph (ii), and

(d) the installation, disconnection, replacement, repair or maintenance of any instrument, device, equipment or apparatus or any part thereof, other than a television receiver, referred to in paragraph (c), by the person providing the programming service in conjunction with which it is being used or by any other person referred to in subparagraph (c)(ii),

but does not include

(e) any surveillance or monitoring service, telebanking or teleshopping service or opinion-polling service,

(f) any background music service of a nature or kind that is provided in a shopping centre, an office building, a factory or a common area of a condominium or of an apartment building as an accompaniment to shopping, dining, working or other similar activities carried on in such place, or

(g) any other service prescribed by regulations made pursuant to section 21.2,

that a person providing a programming service referred to in paragraph (a) provides for an additional fee or charge on the request of the person to whom the programming service is provided or that is provided by a person who does not provide a programming service referred to in paragraph (a);

"telecommunication" [Repealed, R.S., 1985, c. 12 (4th Supp.), s. 7]

(2) [Repealed, R.S., 1985, c. 12 (4th Supp.), s. 7]

Small undertaking resident in Canada

(3) For the purposes of this Part, subsections 250(3) and (4) of the Income Tax Act apply in respect of the interpretation of the expression "small undertaking resident in Canada".

Presumption

(4) For the purposes of this Part, where a small undertaking within the meaning of paragraph (a) of the definition "small undertaking" in subsection (1) acquires a taxable service from a person, other than a licensee or a small undertaking resident in Canada, and provides the taxable service to other persons for amounts charged, the aggregate of the amounts charged is deemed

(a) to be equal to the amount charged by the person from whom the small undertaking acquired the service; and

(b) to have been paid at the end of the month in which the service was acquired from the person referred to in paragraph (a).

Computation

(5) For the purposes of paragraph (b) of the definition "small undertaking" in subsection (1), the number of persons to whom a person provides a taxable service in a month shall be computed as the aggregate of the number of

(a) persons, in this subsection referred to as "customers", to whom he, or a person related to him, provides the service in that month for an amount charged; and

(b) persons to whom customers provide the service in that month, whether or not for an amount charged.

R.S., 1985, c. 15 (1st Supp.), s. 11, c. 12 (4th Supp.), s. 7.

Application to Crown

Binding on the Crown

21.11 This Part binds Her Majesty in right of Canada or a province.

R.S., 1985, c. 15 (1st Supp.), s. 11.

Imposition and Payment of Tax

Imposition of tax

21.12 There shall be imposed, levied and collected a tax at the rate of eleven per cent on the amount charged for a taxable service, payable by the person providing the service at the time the amount charged is paid or payable, whichever is the earlier.

R.S., 1985, c. 15 (1st Supp.), s. 11, c. 7 (2nd Supp.), s. 8, c. 42 (2nd Supp.), s. 2, c. 12 (4th Supp.), s. 8; 1989, c. 22, s. 2.

Relief from tax for licensee

21.13 (1) No tax is payable under section 21.12 in respect of a taxable service provided to a licensee

(a) who,

(i) in the case of a service described in paragraph (a), (b), (c) or (d) of the definition "taxable service" in subsection 21.1(1), is acquiring the service for broadcasting without charge or for provision to another person for an amount charged or broadcasting without charge, or

(ii) in the case of a service described in paragraph (b), (c) or (d) of that definition, is acquiring the service for use in conjunction with a service referred to in subparagraph (i) that is acquired by the licensee for a use described in that subparagraph; and

(b) who, at the time the amount charged for the service is paid or payable, whichever is the earlier, so certifies, and gives his licence number, to the person providing the service.

Relief from tax for other persons

(2) No tax is payable under section 21.12 in respect of a taxable service provided to a person, other than a licensee,

(a) who,

(i) in the case of a service described in paragraph (a) of the definition "taxable service" in subsection 21.1(1), is acquiring the service for broadcasting without charge or for provision to another person for broadcasting without charge, or

(ii) in the case of a service described in paragraph (b), (c) or (d) of that definition, is acquiring the service for use in conjunction with a service referred to in subparagraph (i) that is acquired by the licensee for a use described in that subparagraph; and

(b) who, at the time the amount charged for the service is paid or payable, whichever is the earlier, so certifies to the person providing the service.

Relief from tax for small undertaking

(3) No tax is payable under section 21.12 in respect of a taxable service provided by a small undertaking, other than a taxable service that

(a) is provided by a small undertaking within the meaning of paragraph (a) of the definition "small undertaking" in subsection 21.1(1); and

(b) was acquired by the small undertaking from another person, other than a licensee or a small undertaking resident in Canada.

R.S., 1985, c. 15 (1st Supp.), s. 11.

Determination of Amount Charged in Certain Circumstances

Where service provided to non-arm's length person

21.14 (1) Where a licensee has provided a taxable service to a person with whom the licensee was not dealing at arm's length at the time of the provision for no amount charged or for an amount charged that was less than the amount charged (in this subsection referred to as the "reasonable charge") that would have been reasonable in the circumstances if the service had been provided to a person with whom the licensee was dealing at arm's length, for the purposes of this Part, the licensee shall be deemed to have provided the taxable service to that person for an amount charged equal to the reasonable charge for the service and, where there was no amount charged, the amount charged shall be deemed to be payable at the end of the month in which the service was provided.

Where service provided under certain circumstances

(2) Subject to subsection (1), where a licensee has provided a taxable service to a person and the amount charged for the service cannot be ascertained, for the purposes of this Part, the licensee shall be deemed to have provided the taxable service to that person for an amount charged equal to the amount that is reasonable in the circumstances.

R.S., 1985, c. 15 (1st Supp.), s. 11, c. 12 (4th Supp.), s. 9.

Security

Security

21.15 (1) A small undertaking that proposes to provide a taxable service in respect of which tax is or will be imposed by section 21.12 shall, if required by the Minister, provide security in accordance with subsection (2) for payment of the tax.

Amount and form of security

(2) The security to be provided by a small undertaking pursuant to subsection (1) shall

(a) be provided within the time fixed by the Minister, but not later than the day immediately preceding the day on which provision of the taxable service commences;

(b) be in an amount of not less than six per cent of

(i) the aggregate of the amounts charged for that taxable service by the person from whom the small undertaking acquired the service, or

(ii) where the aggregate of the amounts charged for that taxable service by the person from whom the small undertaking acquired the service cannot be determined prior to the commencement of the service by the small undertaking, the aggregate of the amounts that, in accordance with the agreement between the small undertaking and that other person, are paid or payable by the small undertaking for the service, computed as of seven days prior to the commencement of the service or such later day as may be fixed by the Minister; and

(c) be provided by a chartered bank or by depositing with the Minister

(i) a bond, acceptable to the Minister, of an incorporated guarantee company authorized to do business in Canada, or

(ii) a bond or other security of or guaranteed by the Government of Canada.

Cancellation of bond

(3) Notwithstanding that a bond of a guarantee company given under this section has been cancelled, the bond shall be deemed to remain in force in relation to taxable services provided or to be provided for an amount charged at the time of cancellation until all liabilities to pay amounts on account of tax, penalties, interest or other amounts in relation to such taxable services are discharged.

R.S., 1985, c. 15 (1st Supp.), s. 11.

Diversions

Diversions

21.16 (1) Where, pursuant to subsection 21.13(1) or (2), a taxable service is relieved from tax by reason of the use for which the service is acquired, in this section referred to as the "relieved use", and that service is subsequently diverted

(a) by the person who acquired the service for the relieved use, or

(b) where the person referred to in paragraph (a) acquired the service for provision to another person for broadcasting without charge, by that other person,

to any other use or purpose in respect of which the service would not, at the time of the acquisition of the service for the relieved use, be so relieved, the person who diverted the service and the person who provided the service to him are, from the time of the diversion, jointly and severally liable to pay tax under this Part in respect of the amount charged for the service.

Tax payable

(2) The tax payable pursuant to subsection (1) is payable at the time the service is diverted and shall be computed as the amount of tax that would have been payable at the time of the acquisition of the service for the relieved use had the service not been so relieved.

R.S., 1985, c. 15 (1st Supp.), s. 11.

Licences

Application for licence

21.17 (1) Subject to this section, every person who is providing a taxable service for an amount charged on the coming into force of this Part shall make an application in the prescribed form to the Minister for a licence for the purposes of this Part not later than the last day of the first month immediately following the month in which this Part comes into force.

Idem

(2) Subject to this section, every person who commences to provide, on or after the coming into force of this Part, a taxable service for an amount charged shall make an application in the prescribed form to the Minister for a licence for the purposes of this Part not later than the last day of the first month immediately following the month in which that person commences to provide the service.

Exemption

(3) Subsections (1) and (2) do not apply to a small undertaking.

Exemption lifted

(4) Every person providing a taxable service for an amount charged who ceases to be a small undertaking shall make an application in the prescribed form to the Minister for a licence for the purposes of this Part not later than the last day of the first month immediately following the month in which that person ceases to be a small undertaking.

R.S., 1985, c. 15 (1st Supp.), s. 11, c. 7 (2nd Supp.), s. 9.

Issue of licence

21.18 The Minister may issue a licence for the purposes of this Part to any person applying therefor under section 21.17.

R.S., 1985, c. 15 (1st Supp.), s. 11.

Cancellation

21.19 The Minister may cancel a licence issued under section 21.18 if, in the Minister's opinion, it is no longer required for the purposes of this Part.

R.S., 1985, c. 15 (1st Supp.), s. 11.

Regulations

Regulations

21.2 The Governor in Council may make regulations

(a) prescribing, for the purposes of paragraph (g) of the definition "taxable service" in subsection 21.1(1), any service other than a programming service referred to in paragraph (a) of that definition;

(b) respecting the method for determining the reasonable amount charged for a taxable service for the purposes of section 21.14; and

(c) generally for carrying out the purposes and provisions of this Part.

R.S., 1985, c. 15 (1st Supp.), s. 11, c. 12 (4th Supp.), s. 10.

Increase of Amount Charged by Licensee

Override of other laws

21.21 A licensee may,

(a) notwithstanding the Broadcasting Act or any other Act of Parliament or any regulation or other statutory instrument made thereunder or any other law, and

(b) notwithstanding

(i) any decision or order made, or any licence or renewal of a licence issued, by the Canadian Radio-television and Telecommunications Commission, or

(ii) any other act or thing given, done or issued pursuant to the Broadcasting Act or any other Act of Parliament or any other law,

before or after the coming into force of this Part,

increase the amount charged for a taxable service by an amount not exceeding the tax payable by him under this Part with respect to that service.

R.S., 1985, c. 15 (1st Supp.), s. 11.

PART II.2
TELECOMMUNICATION SERVICES TAX

Interpretation

Definitions

21.22 (1) In this Part,

"amount charged" «montant exigé»

"amount charged", in respect of a service, means any amount paid or payable by a person for the service, before any amount paid or payable in respect of any tax under this Part or imposed under an Act of the legislature of a province respecting retail sales tax is added thereto;

"approved tariff" «tarif agréé»

"approved tariff", in respect of a licensee, means a current schedule or tariff that sets out or otherwise provides for amounts that may be charged by the licensee for any service and that is approved by

(a) the Canadian Radio-television and Telecommunications Commission,

(b) the lieutenant governor in council of a province,

(c) a commission, board, tribunal, authority or other body established by or pursuant to an Act of the legislature of a province to regulate telecommunications,

(d) a person designated by the lieutenant governor in council of a province to regulate telecommunications, or

(e) a municipal or local commission, board, tribunal, authority or other body that regulates telecommunications in a municipality;

"licensee" «titulaire de licence» ou «titulaire»

"licensee" means any person to whom a licence has been issued under subsection 21.3(2) and includes any person who is required by subsection 21.3(1) to apply for a licence;

"separate charge" «redevance distincte»

"separate charge", in respect of a service provided by a person, means an amount charged for the service

(a) as set out separately in a contract entered into by that person and the person charged for the service or in an invoice, bill, statement of account or other similar document issued or made available by that person to the person charged for the service, or

(b) if no such contract was so entered into and document was so issued or made available and the person providing the service is a licensee, as set out or provided for separately in an approved tariff of the licensee;

"taxable service" «service taxable»

"taxable service" means

(a) any telecommunication service,

(b) the commencement or cessation of a telecommunication service,

(c) the provision of any instrument, device, equipment or apparatus or any part thereof, other than terminal equipment for the provision of which a separate charge is made, that is

(i) used in conjunction with a telecommunication service, and

(ii) provided by the person providing the telecommunication service or by any person authorized or designated by him for the purpose or acting on his behalf or by any person related to him,

if the person providing the telecommunication service requires that the instrument, device, equipment, apparatus or part be acquired exclusively from him or any other person referred to in subparagraph (ii), and

(d) the installation, disconnection, replacement, repair or maintenance of any instrument, device, equipment or apparatus or any part thereof referred to in paragraph (c) by the person providing the telecommunication service in conjunction with which it is being used or by any other person referred to in subparagraph (c)(ii),

but does not include a taxable service within the meaning assigned by subsection 21.1(1);

"telecommunication service" «service de télécommunication»

"telecommunication service" means the transmission of any information by means of a system for telecommunication or any part thereof and includes the making available of such a system or part for that use, whether or not it is so used, but does not include

(a) any such service provided for taxi, messenger or other dispatch purposes, if the person providing the service uses, primarily for the person's own dispatch purposes, the system or part thereof by means of which the service is provided,

(b) any such service provided to an occupant in a building or building complex by the owner or manager of the building or complex, if

(i) the system or part thereof by means of which the service is provided and that is controlled by the owner or manager is used exclusively to provide the service within the building or complex, and

(ii) the owner or manager provides the service exclusively

(A) by means of the system or part referred to in subparagraph (i),

(B) through the resale of service acquired from another person, or

(C) in the manner described in clauses (A) and (B), or

(c) the provision, in conjunction with any such service, of a data processing, data storage, information or other service (in this paragraph referred to as the "additional service") by means of telecommunication for a separate charge, if

(i) the service in conjunction with which the additional service is provided is offered separately from the additional service, and

(ii) the additional service is, or could be, lawfully provided by means of telecommunication by persons other than telecommunications carriers;

"telecommunications carrier" «exploitant de télécommunication»

"telecommunications carrier" means

(a) any person who, for an amount charged, provides telecommunication service to the general public, or any portion thereof, by means of a telecommunication system owned, or controlled, and operated by that person, and

(b) any person to whom a licence has been issued under section 21.18 or who is required by section 21.17 to apply for a licence for the purposes of Part II.1.

Presumption

(2) For the purposes of the definitions "telecommunication service" and "telecommunications carrier" in subsection (1), a person who provides telecommunication service through the resale of telecommunication service acquired from another person shall be deemed not to control the system for telecommunication of that other person.

R.S., 1985, c. 12 (4th Supp.), s. 11.

Application to Crown

Binding on Her Majesty

21.23 This Part binds Her Majesty in right of Canada or a province.

R.S., 1985, c. 12 (4th Supp.), s. 11.

Imposition of Tax

Imposition of tax

21.24 (1) There shall be imposed, levied and collected a tax at the rate of eleven per cent on the amount charged for a taxable service acquired from a licensee, payable by the person charged for the service at the time the amount charged is paid or payable, whichever is the earlier.

Tax on long distance calls from a pay telephone

(2) Notwithstanding subsection (1), where long distance telephone service is acquired and paid for by means of a coin-operated telephone and the amount charged for the service exceeds fifty cents, the tax payable in respect of the service shall be calculated at the rate of five cents for every fifty cents or part thereof charged for the service in excess of twenty-four cents.

Tax on paging service

(3) Notwithstanding subsection (1), where a paging service is acquired, the tax payable in respect of the service shall be calculated at the rate of thirty cents, in respect of each paging terminal device by means of which the service is acquired, for each month or fraction of a month in which the service is acquired.

Tax on private international service

(4) Notwithstanding subsection (1), where telecommunication service between a place in Canada and a place outside Canada is provided by means of a telecommunication line, channel or other facility that is dedicated to the sole use of a person, the tax payable in respect of the service shall be calculated on the amount charged for the service only to the extent that the amount charged is for service provided in Canada.

R.S., 1985, c. 12 (4th Supp.), s. 11; 1989, c. 22, s. 1.

Determination of Amount Charged in Certain Circumstances

Where service acquired by licensee

21.25 (1) Where a licensee has provided a taxable service to itself for use in the administration or management of its business, for the purposes of this Part, the licensee shall be deemed to have acquired the taxable service from itself for an amount charged equal to fifty per cent of the amount charged that would have been reasonable in the circumstances if the service had been provided to a person with whom the licensee was dealing at arm's length and the amount charged shall be deemed to be payable at the end of the month in which the service was provided.

Where service acquired by non-arm's length person

(2) Where a licensee has provided a taxable service to a person with whom the licensee was not dealing at arm's length at the time of the provision for no amount charged or for an amount charged that was less than the amount charged (in this subsection referred to as the "reasonable charge") that would have been reasonable in the circumstances if the service had been provided to a person with whom the licensee was dealing at arm's length, for the purposes of this Part, that person shall be deemed to have acquired the taxable service from the licensee for an amount charged equal to the reasonable charge for the service and, where there was no amount charged, the amount charged shall be deemed to be payable at the end of the month in which the service was provided.

Where service acquired under certain circumstances

(3) Subject to subsection (2), where a licensee has provided a taxable service to a person and the amount charged for the service cannot be ascertained, for the purposes of this Part, that person shall be deemed to have acquired the taxable service from the licensee for an amount charged equal to the amount that is reasonable in the circumstances.

Reasonable charge where approved tariff

(4) Where the amount that may be charged for a taxable service provided by a licensee was set out or provided for separately in an approved tariff of the licensee at the time of the provision, the amount as so set out or provided for shall be deemed to be

(a) for the purposes of subsections (1) and (2), the amount charged that would have been reasonable in the circumstances; and

(b) for the purposes of subsection (3), the amount that is reasonable in the circumstances.

R.S., 1985, c. 12 (4th Supp.), s. 11.

Relief from Tax

Relief from tax for residential telephone service

21.26 (1) No tax is payable under section 21.24 on any amount charged for

(a) the provision, commencement or cessation of residential telephone service, other than the provision of long distance telephone service; or

(b) the provision, installation, disconnection, replacement, repair or maintenance of any instrument, device, equipment or apparatus or any part thereof that is used in conjunction with residential telephone service.

Relief from tax for pay telephone service

(2) No tax is payable under section 21.24 on any amount charged for telephone service acquired and paid for by means of a coin-operated telephone, other than long distance telephone service for which the amount charged exceeds fifty cents.

Relief from tax for international telecommunication service

(3) No tax is payable under section 21.24 on any amount charged for any taxable service that is provided entirely outside Canada.

R.S., 1985, c. 12 (4th Supp.), s. 11.

Relief from tax for diplomats

21.27 (1) No tax is payable under section 21.24 on any amount charged for a taxable service acquired by a person described in section 2 of Part II of Schedule III or by a member of the family of that person, if that member is not a Canadian citizen or a permanent resident of Canada.

Relief from tax for international organizations

(2) No tax is payable under section 21.24 on any amount charged for a taxable service acquired by an organization in respect of which the Governor in Council has provided, by order made pursuant to subsection 4(1) of the Privileges and Immunities (International Organizations) Act, that the organization shall have the privileges and immunities set out in paragraph 7(a) of Schedule I to that Act.

Relief from tax for foreign military forces

(3) No tax is payable under section 21.24 on any amount charged for a taxable service acquired by a government of a country designated by the Governor in Council pursuant to heading No. 98.10 of Schedule I to the Customs Tariff, or acquired by a Canadian government agency on behalf of such a government, if the amount charged relates to telecommunication originating or terminating at a military or defence establishment in Canada.

Relief from tax for certain provinces

(4) No tax is payable under section 21.24 on any amount charged for a taxable service acquired by Her Majesty in right of a province, other than a province in respect of which there is in force at the time that the service is acquired a reciprocal taxation agreement referred to in section 32 of the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act.

Relief from tax for Indians

(5) No tax is payable under section 21.24 on any amount charged for a taxable service acquired by an Indian or band within the meaning of subsection 2(1) of the Indian Act, if the amount charged is billed to the Indian or band at a reserve within the meaning of that subsection and relates to telecommunication originating or terminating at a reserve.

R.S., 1985, c. 12 (4th Supp.), s. 11.

Relief from tax for licence holders under this Part

21.28 (1) No tax is payable under section 21.24 on any amount charged for a taxable service acquired by a person to whom a licence has been issued under subsection 21.3(2) for provision to another person or for use directly in providing another taxable service, other than a paging service, to another person.

Relief from tax for licence holders under Part II.1

(2) No tax is payable under section 21.24 on any amount charged for a taxable service acquired by a person to whom a licence has been issued under section 21.18 for use in providing, by means of telecommunication, a programming service within the meaning of subsection 21.1(1) to another person for an amount charged within the meaning of that subsection or in producing a programming service for such provision.

Relief from tax for foreign telecommunications carriers

(3) Subject to subsection (4), no tax is payable under section 21.24 on any amount charged for a taxable service acquired, by a telecommunications carrier who provides telecommunication service solely outside Canada, for provision to another person outside Canada or for use directly in providing another taxable service to another person outside Canada.

Exception

(4) Subsection (3) does not apply in respect of any telecommunication service between a place in Canada and a place outside Canada that is provided by means of a telecommunication line, channel or other facility that is dedicated to the sole use of a person.

R.S., 1985, c. 12 (4th Supp.), s. 11.

Diversions

Diversions

21.29 (1) Where, pursuant to subsection 21.28(1) or (2), no tax is payable in respect of a taxable service by reason of the use for which the service is acquired (in this section referred to as the "relieved use") and that service is subsequently diverted by the person acquiring it to any other use for which the service would not, at the time of the acquisition, have been so relieved, that person is liable to pay tax under this Part in respect of the amount charged that person for the service.

Tax payable

(2) The tax payable pursuant to subsection (1) is payable at the time the taxable service is diverted and shall be computed as the amount of tax that would have been payable at the time of the acquisition of the service for the relieved use had the service not been acquired for that use.

Presumption

(3) For the purposes of sections 21.32 and 21.33, the tax payable pursuant to subsection (1) shall be deemed to be a tax imposed by this Part that was collected or collectible by the person at the time of the diversion.

R.S., 1985, c. 12 (4th Supp.), s. 11.

Licences

Application for licence

21.3 (1) Every telecommunications carrier who provides taxable services in Canada for an amount charged shall make an application in the prescribed form to the Minister for a licence for the purposes of this Part not later than the last day of the first month immediately following the first month, after December 31, 1987, in which that person so provides a taxable service.

Issue of licence

(2) The Minister may issue a licence for the purposes of this Part to any person applying therefor under subsection (1).

Cancellation

(3) The Minister may cancel a licence issued under subsection (2) if, in the Minister's opinion, it is no longer required for the purposes of this Part.

R.S., 1985, c. 12 (4th Supp.), s. 11.

Collection of Tax

Duty of licensee

21.31 (1) Every licensee is an agent of the Minister for the purpose of collecting taxes under this Part and as such shall

(a) levy and collect any taxes imposed by this Part on the amount charged for a taxable service acquired from the licensee;

(b) make adjustments in or refund any portion of the tax paid on the amount charged for a taxable service that has not been provided or has been only partially provided by the licensee; and

(c) make adjustments in or refund any portion of any tax that has been collected in error by the licensee.

Election by licence holder to pay tax directly

(2) Notwithstanding subsection (1), where a person, other than a person who provides a paging service and no other taxable service, to whom a licence has been issued under subsection 21.3(2) acquires a taxable service from another licensee and the acquisition is not relieved from tax pursuant to subsection 21.28(1) or (2), that person may, in lieu of paying to that other licensee any tax payable on the amount charged for the taxable service, elect to pay the tax directly to the Receiver General.

Presumption

(3) For the purposes of sections 21.32 and 21.33, where a person makes an election pursuant to subsection (2), the tax shall be deemed to be a tax imposed by this Part that was collected or collectible by that person at the time the tax became payable by that person.

Debt due to Her Majesty

(4) Every person who, being required by or pursuant to this Part to collect tax, fails to do so as required is liable to Her Majesty in right of Canada for the amount of the tax.

R.S., 1985, c. 12 (4th Supp.), s. 11.

Returns and Remittance of Tax

Monthly return of taxes

21.32 (1) Every licensee shall make each month a true return, in the prescribed form and containing the prescribed information, of all amounts collected or collectible by the licensee by way of the tax imposed by this Part in the last preceding month.

Nil return

(2) Every licensee shall, if no amounts were collected or collectible by the licensee by way of the tax imposed by this Part in the last preceding month, make a return as required by subsection (1) stating that fact.

Alternate periods for making returns

(3) Notwithstanding subsections (1) and (2), the Minister may, by regulation,

(a) authorize any licensee to make a return in respect of any accounting period of not less than twenty-one days and not more than thirty-five days;

(b) authorize any licensee to make a return in respect of any period longer than one month but not longer than six months, if the amounts collected or collectible by the licensee by way of the tax imposed by this Part in the last preceding calendar year did not exceed four thousand eight hundred dollars; or

(c) authorize any licensee whose taxable services are predominantly limited to a seasonal period of operation to make a return in respect of any period longer than one month but not longer than six months, if the amounts collected or collectible by the licensee by way of the tax imposed by this Part in the equivalent period in the last preceding calendar year did not exceed an average of four hundred dollars per month throughout that equivalent period.

Date for filing and remittance

(4) Subject to subsection (8) and sections 21.33 and 79.2, the return required by this section shall be filed and the taxes on amounts charged for taxable services that are collected or collectible by a licensee shall be remitted

(a) in a case where the return is required to be made in accordance with subsection (1) or (2), not later than the last day of the first month succeeding that in which the amounts charged for the taxable service were paid or became payable to the licensee;

(b) in a case where the return is authorized to be made in accordance with a regulation made under paragraph (3)(a), not later than the last day of the first authorized accounting period following the end of the accounting period to which the return relates; and

(c) in a case where the return is authorized to be made in accordance with a regulation made under paragraph (3)(b) or (c), not later than the last day of the first month following the end of the period to which the return relates.

Penalty and interest on default in remitting taxes

(5) Subject to subsections (6) to (9), a licensee who defaults in remitting tax within the time prescribed by subsection (4), in addition to the amount in default, shall pay

(a) in the case of tax required to be remitted not later than the last day of a month, a penalty of one-half of one per cent and interest at the prescribed rate, in respect of each month or fraction of a month between that day and the day on which the total tax, penalty and interest outstanding is remitted, calculated on the total tax, penalty and interest outstanding in that month or fraction of a month; and

(b) in the case of tax required to be remitted not later than the last day of an accounting period, a penalty of one-half of one per cent and interest at the prescribed rate, in respect of each accounting period or fraction of an accounting period between that day and the day on which the total tax, penalty and interest outstanding is remitted, calculated on the total tax, penalty and interest outstanding in that accounting period or fraction of an accounting period.

Minimum penalty and interest

(6) No penalty or interest is payable under subsection (5) if the licensee remits all taxes collected or collectible by the licensee under this Part and, at the time of the remittance, the total penalty and interest payable is less than ten dollars.

Time for paying penalty or interest

(7) A licensee who is liable to pay penalty or interest under subsection (5) shall pay the penalty or interest not later than the last day of the month or accounting period in respect of which the penalty or interest was calculated.

Extension

(8) The Minister may, before or after the expiration of the time prescribed by subsection (4), extend in writing the time for filing a return or remitting any tax, and where the Minister so extends the time,

(a) the return shall be filed or the tax shall be remitted within the time as so extended;

(b) interest accrues under subsection (5) in respect of the tax as if the time had not been so extended;

(c) no penalty accrues or shall be deemed to have accrued under subsection (5) in respect of the tax before the expiration of the time as so extended; and

(d) penalty accrues under subsection (5) in respect of a default in remitting the tax or any portion thereof within the time as so extended as if the default were a default referred to in that subsection.

Security

(9) Where the Minister holds security under section 80.1 for the remittance of any tax under this Part that is not remitted within the time prescribed by subsection (4),

(a) interest accrues under subsection (5) in respect of the tax from the expiration of that time; and

(b) penalty accrues under subsection (5) only if the total tax, penalty and interest outstanding, as calculated in respect of each month or accounting period or fraction of a month or accounting period during which the default continues, exceeds the value of the security at the time it is accepted by the Minister and, if accruing, the penalty shall be calculated only on the amount of the excess.

R.S., 1985, c. 12 (4th Supp.), s. 11.

Interpretation

21.33 (1) For the purposes of this section,

(a) a licensee's "instalment base"

(i) for a month is the lesser of

(A) the tax imposed by this Part that was collected or collectible by that licensee in that month, and

(B) the tax so collected or collectible in the last preceding month,

(ii) for an accounting period is the lesser of

(A) the tax imposed by this Part that was collected or collectible by that licensee in that accounting period, and

(B) the tax so collected or collectible in the last preceding accounting period, and

(iii) for any other period to which a return relates is the lesser of

(A) the tax imposed by this Part that was collected or collectible by that licensee in that period, and

(B) the tax so collected or collectible in the last preceding period multiplied by the ratio that the number of days in the period to which the return relates is to the number of days in the last preceding period; and

(b) a licensee is a "large taxpayer" at any particular time if

(i) the aggregate amount of taxes payable under Parts II.1, III, IV and VI, other than taxes payable in accordance with the Customs Act, and collected or collectible under Part II and this Part by that licensee in the last preceding calendar year ending at least ninety days, or ninety-one days where that time falls in a leap year, before that time exceeded twelve million dollars, or

(ii) the licensee

(A) was, at any time in the last preceding calendar year ending at least ninety days, or ninety-one days where that time falls in a leap year, before that time, a member of a group of associated corporations (within the meaning of section 256 of the Income Tax Act) and the aggregate amount of taxes payable under Parts II.1, III, IV and VI, other than taxes payable in accordance with the Customs Act, and collected or collectible under Part II and this Part by the group in that year exceeded twelve million dollars, and

(B) is not, at that time, authorized to make a return in accordance with a regulation made under paragraph 21.32(3)(b) or (c).

Instalment payments by large taxpayers

(2) A large taxpayer who is required to file a return and remit tax within the time prescribed by subsection 21.32(4) shall pay instalments on account of the tax in accordance with the following rules:

(a) in the case where the return is required to be made in accordance with subsection 21.32(1), the large taxpayer shall pay two instalments, each equal to one-half of the taxpayer's instalment base for the month in which the tax was collected or became collectible, the first to be paid not later than the last day of that month and the second not later than the fifteenth day of the next following month; and

(b) in the case where the return is authorized to be made in accordance with a regulation made under paragraph 21.32(3)(a), the large taxpayer shall pay two instalments, each equal to one-half of the taxpayer's instalment base for the accounting period to which the return relates, the first to be paid not later than the last day of that accounting period and the second not later than the fifteenth day of the next following accounting period.

Instalment payments by other licensees

(3) A licensee, other than a large taxpayer, who is required to file a return and remit tax within the time prescribed by subsection 21.32(4) shall pay an instalment on account of the tax in accordance with the following rules:

(a) in the case where the return is required to be made in accordance with subsection 21.32(1), the licensee shall pay an instalment, equal to the licensee's instalment base for the month in which the tax was collected or became collectible, not later than the twenty-first day of the next following month;

(b) in the case where the return is authorized to be made in accordance with a regulation made under paragraph 21.32(3)(a), the licensee shall pay an instalment, equal to the licensee's instalment base for the accounting period to which the return relates, not later than the twenty-first day of the next following accounting period; and

(c) in the case where the return is authorized to be made in accordance with a regulation made under paragraph 21.32(3)(b) or (c), the licensee shall pay an instalment, equal to the licensee's instalment base for the period to which the return relates, not later than the twenty-first day of the month next following the end of that period.

Penalty and interest on default by large taxpayer in paying instalment

(4) Subject to subsections (6) to (8), a large taxpayer who defaults in paying an instalment within the time prescribed by subsection (2) shall, in addition to the amount in default, pay in respect of the period between the end of that time and the end of the time prescribed for remittance of the tax on account of which the instalment was payable

(a) in the case of an instalment required to be paid not later than the last day of a month or an accounting period, a penalty of one-half of one per cent and interest at the prescribed rate, calculated on the amount by which

(i) one-half of the taxpayer's instalment base for that month or accounting period

exceeds

(ii) the aggregate of all taxes on account of which the instalment was payable that were remitted not later than that day; and

(b) in the case of an instalment required to be paid not later than the fifteenth day of a month or an accounting period, a penalty of one-quarter of one per cent and interest at one-half of the prescribed rate, calculated on the amount by which

(i) one-half of the taxpayer's instalment base for the last preceding month or accounting period

exceeds

(ii) the amount by which the aggregate of all taxes on account of which the instalment was payable that were remitted not later than that day exceeds the lesser of

(A) the aggregate of all taxes on account of which the instalment was payable that were remitted not later than the last day of the last preceding month or accounting period, and

(B) one-half of the taxpayer's instalment base for the last preceding month or accounting period.

Penalty and interest on default by other licensees in paying instalment

(5) Subject to subsections (6) to (8), a licensee who defaults in paying an instalment within the time prescribed by subsection (3) shall, in addition to the amount in default, pay in respect of the period between the end of that time and the end of the time prescribed for remittance of the tax on account of which the instalment was payable

(a) in the case of an instalment required by paragraph (3)(a) or (b) to be paid not later than the twenty-first day of a month or an accounting period, a penalty of one-sixth of one per cent and interest at one-third of the prescribed rate, calculated on the amount by which

(i) the licensee's instalment base for the last preceding month or accounting period

exceeds

(ii) the aggregate of all taxes on account of which the instalment was payable that were remitted not later than that day; and

(b) in the case of an instalment required by paragraph (3)(c) to be paid not later than the twenty-first day of a month next following the end of a period, a penalty of one-sixth of one per cent and interest at one-third of the prescribed rate, calculated on the amount by which

(i) the licensee's instalment base for that period

exceeds

(ii) the aggregate of all taxes on account of which the instalment was payable that were remitted not later than that day.

Minimum penalty and interest

(6) No penalty or interest is payable under subsection (4) or (5) if the large taxpayer or other licensee liable to pay the instalment remits all taxes collected or collectible by the taxpayer or other licensee under this Part and, at the time of the remittance, the total penalty and interest payable in respect of the instalment is less than five dollars and in respect of all those taxes is less than ten dollars.

Time for paying penalty or interest

(7) A large taxpayer or other licensee who is liable to pay penalty or interest under subsection (4) or (5) in respect of a default in paying an instalment shall pay the penalty or interest within the time prescribed by subsection 21.32(4) for the remittance of the tax on account of which the instalment is payable.

Extension

(8) The Minister may, before or after the expiration of the time prescribed by subsection (2) or (3), extend in writing the time for paying an instalment, for any period within the time prescribed by subsection 21.32(4) for the remittance of the tax on account of which the instalment is payable, and where the Minister so extends the time

(a) the instalment shall be paid within the time as so extended;

(b) interest accrues under subsection (4) or (5), as the case may be, in respect of the instalment as if the time had not been so extended;

(c) no penalty accrues or shall be deemed to have accrued under subsection (4) or (5), as the case may be, in respect of the instalment before the expiration of the time as so extended; and

(d) penalty accrues under subsection (4) or (5), as the case may be, in respect of a default in paying an instalment within the time as so extended as if the default were a default referred to in that subsection.

R.S., 1985, c. 12 (4th Supp.), s. 11; 1999, c. 31, s. 247(F).

Regulations

Regulations

21.34 The Governor in Council may make regulations

(a) respecting the method for determining the reasonable amount charged for a taxable service for the purposes of section 21.25; and

(b) generally for carrying out the purposes and provisions of this Part.

R.S., 1985, c. 12 (4th Supp.), s. 11.

PART III
EXCISE TAXES ON COSMETICS, JEWELLERY, RADIOS, ETC.

Definitions

22. (1) In this Part,

"duty paid value" «valeur à l'acquitté»

"duty paid value" means the value of the article as it would be determined for the purpose of calculating an ad valorem duty on the importation of that article into Canada under the laws relating to the customs and the Customs Tariff whether that article is in fact subject to ad valorem or other duty or not, plus the amount of the customs duties, if any, payable thereon;

"licensed wholesaler" «marchand en gros titulaire de licence»

"licensed wholesaler" has the meaning assigned to that expression by section 42;

"sale price" «prix de vente»

"sale price", for the purpose of determining the excise tax payable under this Part, means the aggregate of

(a) the amount charged as price before any amount payable in respect of any other tax under this Act is added thereto,

(b) any amount that the purchaser is liable to pay to the vendor by reason of or in respect of the sale in addition to the amount charged as price, whether payable at the same or any other time, including, without limiting the generality of the foregoing, any amount charged for, or to make provision for, advertising, financing, servicing, warranty, commission or any other matter, and

(c) the amount of excise duties payable under the Excise Act whether the goods are sold in bond or not.

Calculation of sale price and duty paid value

(2) For the purpose of determining the excise tax payable under this Part

(a) in calculating the sale price of goods manufactured or produced in Canada, there shall be included the amount charged as price for or in respect of the wrapper, package, box, bottle or other container in which the goods are contained; and

(b) in calculating the duty paid value of imported goods that, when imported, are wrapped, packaged, put up in boxes or bottles or otherwise prepared for sale, there shall be added to the value of the goods as determined in the manner prescribed in this Part the value, similarly determined, of the wrapper, package, box, bottle or other container in which the goods are contained.

R.S., c. E-13, s. 20; 1976-77, c. 6, s. 1.

Tax on various articles at schedule rates

23. (1) Subject to subsections (6) to (8.3) and 23.2(6), whenever goods mentioned in Schedules I and II are imported into Canada or manufactured or produced in Canada and delivered to a purchaser thereof, there shall be imposed, levied and collected, in addition to any other duty or tax that may be payable under this or any other Act or law, an excise tax in respect of those goods at the applicable rate set out in the applicable section in whichever of those Schedules is applicable, computed, where that rate is specified as a percentage, on the duty paid value or the sale price, as the case may be.

By whom and when tax is payable

(2) Where goods are imported, the excise tax imposed by subsection (1) shall be paid in accordance with the provisions of the Customs Act by the importer, owner or other person liable to pay duties under that Act, and where goods are manufactured or produced and sold in Canada, the excise tax shall be payable by the manufacturer or producer at the time of delivery of the goods to the purchaser thereof.

Deemed sale and delivery to purchaser

(3) For the purposes of subsection (2),

(a) where gasoline or diesel fuel is delivered to a retail outlet by or on behalf of the manufacturer or producer thereof, the gasoline or diesel fuel shall be deemed to have been sold and delivered to a purchaser thereof; and

(b) where gasoline, diesel fuel or aviation fuel was, immediately prior to March 1, 1987, held in inventory by or on behalf of a person described in paragraph (e) of the definition "manufacturer or producer" in subsection 2(1) as that subsection read immediately prior to March 1, 1987, who was a licensed manufacturer under this Act of gasoline, diesel fuel or aviation fuel solely by virtue of that paragraph, and the excise tax thereon had not been paid or become payable on or before February 28, 1987, the gasoline, diesel fuel or aviation fuel shall be deemed to have been sold and delivered to a purchaser thereof immediately prior to March 1, 1987.

Deemed sale

(3.1) For the purposes of this Part, a person who, pursuant to a contract for labour, manufactures or produces goods mentioned in Schedule I or II from any article or material supplied by another person, other than a manufacturer licensed for the purposes of this Part, for delivery to that other person shall be deemed to have sold the goods, at a sale price equal to the charge made under the contract in respect of the goods, at the time they are delivered to that other person.

Tax on resale by licensed wholesaler of Schedule I goods

(4) Whenever goods mentioned in Schedule I are sold by a licensed wholesaler or are retained for the licensed wholesaler's own use or for rental by the licensed wholesaler to others, there shall be imposed, levied and collected, in addition to any other duty or tax payable under this Act or any other Act or law, an excise tax in respect of those goods at the applicable rate set out in the applicable section in that Schedule, computed, where that rate is specified as a percentage, on the duty paid value or the price at which the goods were purchased by the licensed wholesaler, as the case may be, payable by the licensed wholesaler at the time the goods are delivered to the purchaser or so retained for use or rental.

Tax on release by duty free shop of Schedule II tobacco products

(5) Subject to subsection 23.2(5) and section 66.1, whenever tobacco products mentioned in Schedule II are sold by the operator of a duty free shop or are retained for the use of the operator, there shall be imposed, levied and collected, in addition to any other duty or tax payable under this Act or any other Act or law, an excise tax in respect of those tobacco products at the applicable rate set out in the applicable section in that Schedule, computed, where that rate is specified as a percentage, on the duty paid value or the price at which the tobacco products were purchased by the operator, as the case may be, payable by the operator at the time the tobacco products are delivered to the purchaser or so retained for use.

When tax not payable

(6) The tax imposed by subsection (1) is not payable in the case of goods mentioned in Schedule I that are purchased or imported by a licensed wholesaler for resale by him.

When tax not payable

(7) The tax imposed by this section or by section 27 is not payable in the case of

(a) goods that are purchased or imported by a manufacturer licensed under section 130 of the Excise Act and that are to be incorporated into and form a constituent or component part of an article or product that is subject to excise duty under that Act;

(b) goods that are purchased or imported by a manufacturer licensed for the purposes of this Part and that are to be incorporated into and form a constituent or component part of an article or product that is subject to excise tax under this Act, if the tax on the article or product has not yet been levied pursuant to this section or section 27;

(c) [Repealed, R.S., 1985, c. 7 (2nd Supp.), s. 10]

(d) [Repealed, R.S., 1985, c. 12 (4th Supp.), s. 12]

(e) new motor vehicles designed for highway use, or chassis therefor, imported by a person described in paragraph (g) of the definition "manufacturer or producer" in subsection 2(1) who is a manufacturer licensed for the purposes of this Part; or

(f) new motor vehicles designed for highway use, or chassis therefor, sold to a person described in paragraph (h) of the definition "manufacturer or producer" in subsection 2(1) who is a manufacturer licensed for the purposes of this Part.

Idem

(8) The tax imposed under subsection (1) or under section 27 is not payable in the case of

(a) goods that are purchased or imported by a licensed wholesaler who is deemed by subsection 55(2) to be a bona fide wholesaler or jobber for resale by him;

(b) goods for which relief from the consumption or sales tax is provided by virtue of section 12 or 13 of Part III of Schedule III or section 1 of Part VII of Schedule III;

(b.1) goods imported into Canada and classified under tariff item No. 9804.30.00 of Schedule I to the Customs Tariff; or

(c) diesel fuel for use in the generation of electricity, except where the electricity so generated is used primarily in the operation of a vehicle.

Where tax not payable

(8.1) The tax imposed under subsection (1) is not payable in the case of tobacco products mentioned in Schedule II that are

(a) sold by the manufacturer or producer of the tobacco products to an accredited representative for the personal or official use of the accredited representative;

(b) sold by the manufacturer or producer of the tobacco products to a person to whom a licence for a bonding warehouse has been granted under the Excise Act exclusively for the storage and subsequent sale of the products to an accredited representative for the personal or official use of the accredited representative;

(c) imported by an accredited representative for the personal or official use of the accredited representative;

(d) imported and entered into a bonded warehouse licensed as such under the Customs Tariff for sale by the importer or owner to an accredited representative for the personal or official use of the accredited representative;

(e) sold by the bonding warehouse licensee referred to in paragraph (b) or the importer or owner referred to in paragraph (d) to an accredited representative for the personal or official use of the accredited representative; or

(f) entered before February 13, 1992 into a bonded warehouse licensed as such under the Customs Tariff and sold to an accredited representative for the personal or official use of the accredited representative.

Other cases where tax not payable

(8.2) The tax imposed under subsection (1) on tobacco products mentioned in Schedule II is not payable if evidence satisfactory to the Minister is produced to establish that

(a) the products have been exported in bond by the manufacturer or producer of the products;

(b) the products have been sold by the manufacturer or producer of the products and entered into a bonded warehouse, licensed as such under the Customs Tariff, for delivery as ships' stores in accordance with the regulations made under this Act and the Customs Tariff; or

(c) the products have been sold by the manufacturer or producer of the products to a person for use as ships' stores, where the purchase by that person for that purpose was in accordance with the regulations made under this Act and the Customs Tariff.

Idem

(8.3) The tax imposed under subsection (1) on tobacco products mentioned in Schedule II is not payable in the case of imported tobacco products that are

(a) for use by the importer as ships' stores in accordance with the regulations made under this Act and the Customs Tariff; or

(b) entered into a bonded warehouse licensed as such under the Customs Tariff, for delivery as ships' stores in accordance with the regulations made under this Act and the Customs Tariff or for export.

Diversion to taxable sale or use

(9) Where gasoline or aviation gasoline has been purchased by a person to whom a bulk permit has been issued under regulations made by the Governor in Council pursuant to subsection 59(3) for a use by such person that renders the purchase exempt from a portion of the tax imposed by this section equal to one and one-half cents per litre and that person sells the gasoline or aviation gasoline or uses it for a purpose for which it could not have been purchased by him exempt from such portion of the tax at the time he purchased it, the portion of the tax that would have been payable at the time he purchased it equal to one and one-half cents per litre of gasoline or aviation gasoline shall be payable by that person at the time he so sells or uses the gasoline or aviation gasoline.

Idem

(9.1) Where fuel other than aviation gasoline has been purchased or imported for a use for which the tax imposed under this Part on diesel fuel or aviation fuel is not payable and the purchaser or importer sells or appropriates the fuel for a purpose for which the fuel could not have been purchased or imported without payment of the tax at the time he purchased or imported it, the tax imposed under this Part on diesel fuel or aviation fuel shall be payable by the person who sells or appropriates the fuel

(a) where the fuel is sold, at the time of delivery to the purchaser; and

(b) where the fuel is appropriated, at the time of that appropriation.

Diversion of tobacco products for non-exempt sale or use

(9.2) Subject to subsection (9.3), where

(a) tobacco products mentioned in Schedule II have been purchased or imported by a person and the tobacco products have been relieved, under this Act or otherwise, from the tax imposed under subsection (1) because of the purpose for which the person purchased or imported them,

(b) the tobacco products are sold or used for a purpose other than the purpose referred to in paragraph (a), and

(c) the tobacco products would not have been relieved from that tax if the person had purchased or imported them for the purpose of the sale or use referred to in paragraph (b),

the person is liable to pay the tax imposed under subsection (1) on the tobacco products, and that tax shall be deemed to have become payable by the person, in the case of a sale referred to in paragraph (b), at the time the person delivers the tobacco products to the purchaser, and in the case of a use referred to in paragraph (b), at the time that use began.

Exception to application of s. (9.2)

(9.3) Subsection (9.2) does not apply in respect of a purchase or importation referred to in paragraph (9.2)(a) by the operator of a duty free shop.

Appropriation by manufacturer or producer

(10) Where goods of any class mentioned in Schedule I or II that were manufactured or produced in Canada are appropriated by the manufacturer or producer thereof for his own use, for the purposes of this Part,

(a) the goods shall be deemed to have been delivered to a purchaser thereof at the time of the appropriation; 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 a person with whom the manufacturer or producer was dealing at arm's length.

Person deemed manufacturer or producer

(11) Where a person has, in Canada,

(a) put a clock or watch movement into a clock or watch case,

(b) put a clock or watch movement into a clock or watch case and added a strap, bracelet, brooch or other accessory thereto, or

(c) set or mounted one or more diamonds or other precious or semi-precious stones, real or imitation, in a ring, brooch or other article of jewellery,

he shall, for the purposes of this Part, be deemed to have manufactured or produced the watch, clock, ring, brooch or other article of jewellery in Canada.

R.S., 1985, c. E-15, s. 23; R.S., 1985, c. 15 (1st Supp.), s. 12, c. 1 (2nd Supp.), s. 187, c. 7 (2nd Supp.), s. 10, c. 12 (4th Supp.), s. 12; 1988, c. 65, s. 113; 1990, c. 45, s. 5; 1993, c. 25, s. 55; 1995, c. 41, s. 113.

Definitions

23.01 (1) The definitions in this subsection apply in this section.

"fuel" « combustible »

"fuel" means gasoline, diesel fuel and aviation fuel.

"temperature compensated method" « méthode fondée sur la compensation de la température »

"temperature compensated method" means the method involving the measurement of the volume of fuel in litres that are corrected to the reference temperature of 15 degrees Celsius in accordance with the requirements imposed by or under the Weights and Measures Act.

"uncompensated method" « méthode traditionnelle »

"uncompensated method" means the method involving the measurement of the volume of fuel in litres that are not corrected to a reference temperature.

Measurement of fuel volume

(2) For the purposes of determining the tax imposed under subsection 23(1) in respect of fuel, the volume of the fuel shall be measured in accordance with

(a) the temperature compensated method, where that method is used by the manufacturer or producer of the fuel for the purpose of establishing the amount of fuel delivered and charged to the purchaser, or by the importer of the fuel to establish the amount of fuel imported; or

(b) the uncompensated method, where that method is used by the manufacturer or producer of the fuel for the purpose of establishing the amount of fuel delivered and charged to the purchaser, or by the importer of the fuel to establish the amount of fuel imported.

Measurement of fuel volume -- licensed wholesalers

(3) For the purposes of determining the tax imposed under subsection 23(4) in respect of fuel sold by a licensed wholesaler, the volume of the fuel shall be measured in accordance with

(a) the temperature compensated method, where that method is used by the licensed wholesaler for the purpose of establishing the amount of fuel delivered and charged to the purchaser; or

(b) the uncompensated method, where that method is used by the licensed wholesaler for the purpose of establishing the amount of fuel delivered and charged to the purchaser.

1997, c. 26, s. 87.

Definition of "tobacco product"

23.1 In sections 23.2 to 23.3, "tobacco product" means manufactured tobacco other than cut filler, cut rag or products manufactured less fully than cut filler or cut rag.

1993, c. 25, s. 56; 1994, c. 29, s. 5.

Tax on exports

23.2 (1) Where tobacco products manufactured or produced in Canada are exported from Canada after February 8, 1994 by the manufacturer or producer, there shall be imposed, levied and collected in respect of the tobacco products, in addition to any other duty or tax payable under this Act or any other Act or law, an excise tax at the rate of

(a) 4 cents per cigarette, in the case of cigarettes;

(b) 2.667 cents per stick, in the case of tobacco sticks; and

(c) $26.667 per kilogram, in the case of tobacco products other than cigarettes or tobacco sticks.

When and by whom tax is payable

(2) The tax imposed under subsection (1) is payable by the manufacturer or producer of the tobacco products at the time the tobacco products are exported from Canada.

1993, c. 25, s. 56; 1994, c. 29, s. 5.

Categories of tobacco products

23.21 (1) In subsections (2) and (3), cigarettes, tobacco sticks, and manufactured tobacco other than cigarettes and tobacco sticks each constitute a category of tobacco product.

Exemption for limited exports

(2) The excise tax imposed under subsection 23.2(1) is not payable by a manufacturer or producer in respect of a particular quantity of a category of tobacco product exported at a time in a calendar year if the total quantity of that category of tobacco product, including the particular quantity, exported by the manufacturer or producer in the calendar year up to and including that time does not exceed 2 1/2% of the total quantity of that category of tobacco product manufactured or produced by the manufacturer or producer in the preceding calendar year.

Quantities to be excluded for purpose of subsection (2)

(3) The total quantities referred to in subsection (2) shall not include any quantity of tobacco product in respect of which the excise tax imposed under subsection 23.2(1) was repaid under section 68.161 or was not payable because of section 23.22 or 23.3.

1994, c. 29, s. 5; 1997, c. 26, s. 59; 2000, c. 30, s. 3.

Definition of "foreign duty free shop"

23.22 (1) In this section and section 68.161, "foreign duty free shop" means a retail store that is located in a country other than Canada and that is authorized under the laws of that country to sell goods free of duties and taxes to individuals who are about to leave that country.

Exemption for tobacco products for sale in foreign duty free shop

(2) The excise tax imposed under subsection 23.2(1) is not payable in respect of tobacco products that are sold by the manufacturer or producer of the products to the operator of a foreign duty free shop for duty free sale by the operator in that shop.

1997, c. 26, s. 60.

Exemption for prescribed tobacco product

23.3 (1) The excise tax imposed under subsection 23.2(1) is not payable in the case of a tobacco product of a particular brand that is manufactured or produced in Canada and exported from Canada, if

(a) the tobacco product of that brand is prescribed in any regulations made by the Minister for the purposes of this subsection;

(b) during the three year period before the year in which the tobacco product of that brand is exported, the tobacco product of that brand was not sold in Canada, other than in a duty free shop, except in quantities not significantly greater than the minimum quantities sufficient for the purposes of registering the trade mark for that brand; and

(c) during any year before the three year period referred to in paragraph (b), sales in Canada of the product of that brand never exceeded 0.5 per cent of total sales in Canada of similar products or, where another percentage that is less than 0.5 per cent is prescribed in any regulations made by the Minister for the purposes of this subsection, that percentage of total sales in Canada of similar products.

Exemption for prescribed cigarettes

(2) The excise tax imposed under subsection 23.2(1) is not payable in the case of cigarettes of a particular type or formulation, manufactured or produced in Canada and exported from Canada under a brand that is also applied to cigarettes of a different type or formulation that are manufactured or produced in Canada and sold in Canada, if

(a) cigarettes of the particular type or formulation exported from Canada under that brand are prescribed in any regulations made by the Minister for the purposes of this subsection; and

(b) cigarettes of that particular type or formulation have never been sold in Canada by the manufacturer or producer under that brand or any other brand.

Distinguishing different cigarettes

(3) For the purposes of subsection (2), a cigarette of a particular type or formulation sold under a brand may be considered to be different from another cigarette sold under that brand if it is reasonable to consider them to be different having regard to their physical characteristics before and during consumption.

Regulations

(4) The Minister may make regulations

(a) prescribing a tobacco product of a particular brand, for the purposes of subsection (1);

(b) prescribing percentages for the purposes of subsection (1); and

(c) prescribing cigarettes of a particular type or formulation exported from Canada under a particular brand, for the purposes of subsection (2).

1993, c. 25, s. 56.

Tax on tobacco sold to purchaser not authorized to resell in Ontario

23.31 (1) An excise tax shall be imposed, levied and collected on manufactured tobacco, other than tobacco sticks, that is

(a) marked or stamped in accordance with a statute of the Province of Ontario to indicate that it is intended for retail sale in the province; and

(b) sold by the manufacturer of the manufactured tobacco, or by a person who is authorized under a statute of the province to sell manufactured tobacco in the province, to a purchaser who is not authorized under a statute of the province to sell manufactured tobacco in the province.

Where tax not imposed

(2) Tax shall not be imposed under subsection (1) where the purchaser referred to in that subsection is a consumer in the Province of Ontario and the purchase is for consumption by the purchaser or by others at the expense of the purchaser.

When and by whom tax is payable

(3) The tax imposed under subsection (1) is payable by the person selling the manufactured tobacco to the purchaser referred to in that subsection and is payable at the time of the sale.

Amount of tax

(4) The tax imposed on manufactured tobacco under subsection (1) shall be equal to the amount by which

(a) the excise tax that would have been imposed under section 23 in respect of the manufactured tobacco if the applicable rates of excise tax were the rates set out in paragraphs 1(f) and 3(e) of Schedule II

exceeds

(b) the excise tax that was imposed under section 23 in respect of the manufactured tobacco.

1994, c. 29, s. 6; 1997, c. 26, s. 61; 2000, c. 30, s. 4.

Tax on cigarettes sold to purchaser not authorized to resell in Quebec or New Brunswick

23.32 (1) An excise tax shall be imposed, levied and collected on cigarettes that are

(a) marked or stamped in accordance with a statute of the Province of Quebec or New Brunswick to indicate that they are intended for retail sale in that province; and

(b) sold by the manufacturer of them, or by a person who is authorized under a statute of the province to sell manufactured tobacco in the province, to a purchaser who is not authorized under a statute of the province to sell manufactured tobacco in the province.

Where tax not imposed

(2) Tax shall not be imposed under subsection (1) where the purchaser referred to in that subsection is a consumer located in the province referred to in that subsection and the purchase is for consumption by the purchaser or by others at the expense of the purchaser.

When and by whom tax is payable

(3) The tax imposed under subsection (1) is payable by the person selling the cigarettes to the purchaser referred to in that subsection and is payable at the time of the sale.

Amount of tax

(4) The tax imposed on cigarettes under subsection (1) shall be equal to the amount by which

(a) the excise tax that would have been imposed under section 23 in respect of them if the applicable rate of excise tax were the rate set out in paragraph 1(f) of Schedule II

exceeds

(b) the excise tax that was imposed under section 23 in respect of them.

1994, c. 29, s. 6; 1997, c. 26, s. 62; 2000, c. 30, s. 5.

Tax on cigarettes sold to purchaser not authorized to resell in Nova Scotia

23.33 (1) An excise tax shall be imposed, levied and collected on cigarettes that are

(a) marked or stamped in accordance with a statute of the Province of Nova Scotia to indicate that they are intended for retail sale in that province; and

(b) sold by the manufacturer of them, or by a person who is authorized under a statute of the province to sell manufactured tobacco in the province, to a purchaser who is not authorized under a statute of the province to sell manufactured tobacco in the province.

Where tax not imposed

(2) Tax shall not be imposed under subsection (1) where the purchaser referred to in that subsection is

(a) a consumer located in the Province of Nova Scotia or the Province of Prince Edward Island and the purchase is for consumption by the purchaser or by others at the expense of the purchaser; or

(b) a person authorized under a statute of the Province of Prince Edward Island to sell manufactured tobacco in that province.

When and by whom tax payable

(3) The tax imposed under subsection (1) is payable by the person selling the cigarettes to the purchaser referred to in that subsection and is payable at the time of the sale.

Amount of tax

(4) The tax imposed on cigarettes under subsection (1) shall be equal to the amount by which

(a) the excise tax that would have been imposed under section 23 in respect of the cigarettes if the applicable rate of excise tax were the rate set out in paragraph 1(f) of Schedule II

exceeds

(b) the excise tax that was imposed under section 23 in respect of the cigarettes.

1994, c. 29, s. 6; 1995, c. 36, s. 2; 1997, c. 26, s. 63.

Definitions

23.34 (1) In this section and section 23.341,

"licensed retail vendor" « vendeur au détail titulaire de licence »

"licensed retail vendor" means a retail vendor licensed as such under the Health Tax Act, R.S.P.E.I. 1988, c. H-3;

"licensed wholesale vendor" « vendeur en gros titulaire de licence »

"licensed wholesale vendor" means a wholesale vendor licensed as such under the Health Tax Act, R.S.P.E.I. 1988, c. H-3;

"Nova Scotia cigarettes" « cigarettes de la Nouvelle-Écosse »

"Nova Scotia cigarettes" means cigarettes that are marked or stamped in accordance with Part III of the Revenue Act, S.N.S. 1995-96, c. 17, to indicate that the cigarettes are intended for retail sale in the Province of Nova Scotia;

"Nova Scotia manufactured tobacco" [Repealed, 1997, c. 26, s. 64]

"Nova Scotia tobacco sticks" [Repealed, 2000, c. 30, s. 6]

Excise tax on diverted P.E.I. cigarettes

(2) An excise tax shall be imposed, levied and collected on Nova Scotia cigarettes, to which paragraph 1(e) of Schedule II applies, that a licensed wholesale vendor sells to a person other than

(a) a licensed retail vendor; or

(b) a consumer in the Province of Prince Edward Island for consumption by the consumer or by others at the expense of the consumer.

When and by whom tax is payable

(3) The tax imposed under subsection (2) is payable by the licensed wholesale vendor at the time of the sale.

Amount of tax

(4) The tax imposed on cigarettes under subsection (2) shall be equal to the amount by which

(a) the excise that would have been imposed under section 23 in respect of the cigarettes if the applicable rate of excise tax were the rate set out in paragraph 1(f) of Schedule II

exceeds

(b) the excise tax that was imposed under section 23 in respect of the cigarettes.

1994, c. 29, s. 6; 1995, c. 36, s. 3; 1997, c. 26, s. 64; 2000, c. 30, ss. 6, 140.

Excise tax on diverted P.E.I. cigarettes

23.341 (1) An excise tax shall be imposed, levied and collected on Nova Scotia cigarettes to which section 68.169 and paragraph 1(e) of Schedule II apply that a licensed retail vendor sells to a person other than

(a) a licensed retail vendor; or

(b) a consumer in the Province of Prince Edward Island for consumption by the consumer or by others at the expense of the consumer.

When and by whom tax payable

(2) The tax imposed under subsection (1) is payable by the licensed retail vendor at the time of the sale.

Amount of tax

(3) The tax imposed under subsection (1) shall be equal to the amount by which

(a) the excise tax that would have been imposed under section 23 in respect of the cigarettes if the applicable rate of excise tax were the rate set out in paragraph 1(f) of Schedule II

exceeds

(b) the excise tax imposed at the rate of $0.10013 per five cigarettes.

1995, c. 36, s. 4; 1997, c. 26, s. 65; 1998, c. 21, s. 80; 2000, c. 30, s. 7.

Definitions

23.35 (1) In this section,

"on-reserve retailer" « détaillant situé dans une réserve »

"on-reserve retailer" means a retailer on a reserve in the Province of Ontario who is authorized under the Tobacco Tax Act, R.S.O. 1990, c. T.10, to sell black stock cigarettes, in the ordinary course of the retailer's business, to Indian consumers in the province;

"reserve" « réserve »

"reserve" means a reserve as defined in subsection 2(1) of the Indian Act or an Indian settlement as defined in section 2 of the Indians and Bands on certain Indian Settlements Remission Order;

"supplier" « fournisseur »

"supplier" means a wholesaler who has a permit under section 9 of the Tobacco Tax Act, R.S.O. 1990, c. T.10, to purchase and sell black stock cigarettes.

Tax on excess sale of black stock

(2) If a supplier sells to an on-reserve retailer a quantity of black stock, in respect of which subparagraph 1(a)(ii) or 3(a)(ii) of Schedule II applies, that is in excess of the quantity of black stock that the on-reserve retailer is authorized under the Tobacco Tax Act, R.S.O. 1990, c. T.10, to purchase, an excise tax shall be imposed, levied and collected on that excess black stock.

Tax on illegal sale of black stock

(3) If a supplier sells black stock, in respect of which subparagraph 1(a)(ii) or 3(a)(ii) of Schedule II applies, to a person other than an Indian consumer in Ontario or an on-reserve retailer, an excise tax shall be imposed, levied and collected on that black stock.

When and by whom tax is payable

(4) The tax imposed under subsection (2) or (3) is payable by the supplier at the time of the selling referred to in that subsection.

Amount of tax

(5) The tax imposed on black stock under subsection (2) or (3) shall be equal to the amount by which

(a) the excise tax that would have been imposed under section 23 in respect of the black stock if the applicable rates of excise tax were the rates set out in paragraphs 1(f) and 3(e) of Schedule II

exceeds

(b) the excise tax that was imposed under section 23 in respect of the black stock.

1994, c. 29, s. 6; 2000, c. 30, s. 8.

Definitions

23.36 (1) In this section,

"band" « bande »

"band" has the same meaning as in subsection 2(1) of the Indian Act;

"council" « conseil »

"council" of a band has the same meaning as in subsection 2(1) of the Indian Act;

"designated retail vendor" « vendeur au détail désigné »

"designated retail vendor" means a retail vendor on a reserve in the Province of Nova Scotia who is designated in writing by the council of a band in Nova Scotia, and by the Nova Scotia Provincial Tax Commission, as a vendor from whom Indians on the reserve may buy manufactured tobacco on which tax under Part III of the Revenue Act, S.N.S. 1995-96, c. 17, is not payable;

"designated wholesale vendor" « vendeur en gros désigné »

"designated wholesale vendor" means a wholesale vendor who has a wholesale vendor's permit under Part III of the Revenue Act, S.N.S. 1995-96, c. 17, for the sale of black stock to designated retail vendors;

"Nova Scotia Provincial Tax Commission" « Provincial Tax Commission de la Nouvelle-Écosse »

"Nova Scotia Provincial Tax Commission" means the Provincial Tax Commission of the Department of Finance of the Province of Nova Scotia;

"reserve" « réserve »

"reserve" means a reserve as defined in subsection 2(1) of the Indian Act.

Tax on excess sale of black stock cigarettes

(2) Where a designated wholesale vendor sells to a designated retail vendor a quantity of black stock cigarettes, in respect of which subparagraph 1(c)(ii) of Schedule II applies, that is in excess of the quantity of black stock cigarettes that the designated wholesale vendor is authorized in writing by the Nova Scotia Provincial Tax Commission to sell to the designated retail vendor without the collection of tax under Part III of the Revenue Act, S.N.S. 1995-96, c. 17, an excise tax shall be imposed, levied and collected on those excess black stock cigarettes.

Tax on illegal sale of black stock cigarettes

(3) Where a designated wholesale vendor sells black stock cigarettes, in respect of which subparagraph 1(c)(ii) of Schedule II applies, to a person other than an Indian consumer on a reserve in Nova Scotia or a designated retail vendor, an excise tax shall be imposed, levied and collected on those cigarettes.

When and by whom tax is payable

(4) The tax imposed under subsection (2) or (3) is payable by the designated wholesale vendor at the time of the selling referred to in that subsection.

Amount of tax

(5) The tax imposed on black stock cigarettes under subsection (2) or (3) shall be equal to the amount by which

(a) the excise tax that would have been imposed under section 23 in respect of those cigarettes if the applicable rate of excise tax were the rate set out in paragraph 1(f) of Schedule II

exceeds

(b) the excise tax that was imposed under section 23 in respect of those cigarettes.

1994, c. 29, s. 6; 1997, c. 26, s. 66; 2000, c. 30, s. 140.

Definition of "alcohol"

23.4 (1) In this section, "alcohol" means ethanol and methanol produced from biomass or renewable feedstocks, but does not include ethanol or methanol produced from petroleum, natural gas or coal.

Where excise tax not payable on gasoline-alcohol

(2) Where gasoline or aviation gasoline has been blended with alcohol to produce a gasoline-alcohol fuel, or an aviation gasoline-alcohol fuel, containing not less than 1.35% alcohol by volume, the excise tax imposed under section 23 on gasoline or aviation gasoline is not payable on the portion of the gasoline-alcohol fuel or aviation gasoline-alcohol fuel that is equal to the percentage by volume of alcohol in the fuel.

1993, c. 25, s. 56.

Security that true returns rendered

24. For the purposes of this Part, the Minister may require every manufacturer or producer and every packer of tobacco licensed under the Excise Act to give security that he will render true returns of his sales as required by section 78 or by any regulations made thereunder and pay any tax imposed by this Act on the sales, which security shall be in an amount of not more than two hundred and fifty thousand dollars and not less than one thousand dollars and shall be by bond of a guarantee company authorized to do business in Canada, acceptable to the Government of Canada, or by deposit of Government of Canada bonds.

R.S., c. E-13, s. 22.

PART IV
EXCISE TAXES ON PLAYING CARDS AND WINES

Definition of "wine"

25. In this Part, "wine" includes spirituous liquors that are the products of fruits, vegetables, roots, herbs, grain, molasses, sugar or other fermentable substances and are obtained by the normal alcoholic fermentation of the juices or extracts therefrom and not by distillation.

1980-81-82-83, c. 68, s. 7.

26. [Repealed, 1990, c. 45, s. 6]

Excise tax on wines

27. There shall be imposed, levied and collected the following excise taxes:

(a) a tax of $0.0205 per litre on wines of all kinds containing not more than 1.2% of absolute ethyl alcohol by volume;

(b) a tax of $0.2459 per litre on wines of all kinds containing more than 1.2% of absolute ethyl alcohol by volume but not more than 7% of absolute ethyl alcohol by volume; and

(c) a tax of $0.5122 per litre on wines of all kinds containing more than 7% of absolute ethyl alcohol by volume.

R.S., 1985, c. E-15, s. 27; R.S., 1985, c. 7 (2nd Supp.), s. 11, c. 42 (2nd Supp.), s. 3; 1990, c. 45, s. 7.

By whom and when tax is payable

28. (1) The excise taxes imposed by subsection 27(1),

(a) in the case of wines imported into Canada, shall be paid in accordance with the provisions of the Customs Act by the importer, owner or other person liable to pay duties under that Act;

(b) in the case of wines manufactured or produced in Canada, shall be payable by the manufacturer or producer at the time when the goods are delivered to a purchaser thereof; and

(c) in the case of wines imported or purchased by a licensed wholesaler who is deemed by subsection 55(2) to be a bona fide wholesaler or jobber, shall be payable by that person at the time when the goods are delivered by him to a purchaser thereof.

Deemed delivery to purchaser

(2) For the purposes of this Part, when goods subject to tax imposed by subsection 27(1) are for the use of the manufacturer or producer thereof or for the use of a licensed wholesaler who is deemed by subsection 55(2) to be a bona fide wholesaler or jobber, and not for sale, the goods shall be deemed to have been delivered to a purchaser thereof at the time when the goods are appropriated for use.

R.S., 1985, c. E-15, s. 28; R.S., 1985, c. 1 (2nd Supp.), s. 189.

Where taxes not payable

28.1 The taxes imposed under section 27 are not payable in the case of wines that are purchased or imported by and for the personal or official use of an accredited representative.

1993, c. 25, s. 57.

PART V
TOBACCO PRODUCTS INVENTORY TAX

Definitions

29. In this Part,

"loose tobacco" « tabac à cigarettes »

"loose tobacco" means loose, fine-cut manufactured tobacco for use in making cigarettes;

"separate retail establishment" « établissement de détail distinct »

"separate retail establishment" of a person means a shop or store of the person

(a) that is geographically separate from other places of business of the person,

(b) at which, in the ordinary course of the person's business, the person regularly sells, otherwise than through vending machines, tobacco products to consumers, within the meaning of section 123, attending at the shop or store, and

(c) in respect of which separate records, books of account and accounting systems are maintained;

"taxed tobacco" « tabac imposé »

"taxed tobacco" of a person means cigarettes, tobacco sticks and loose tobacco, in respect of which tax under section 23 became payable before February 27, 1991 and that, at the beginning of that day,

(a) were owned by that person for sale in the ordinary course of a business of the person, and

(b) were not held in a vending machine;

"unit" « unité »

"unit" means one cigarette, tobacco stick or gram of loose tobacco.

R.S., 1985, c. E-15, s. 29; R.S., 1985, c. 15 (1st Supp.), s. 13, c. 7 (2nd Supp.), s. 12; 1991, c. 42, s. 1.

Imposition of tax

30. Subject to section 31, every person shall pay to Her Majesty in right of Canada a tax on all taxed tobacco of the person at the rate of

(a) 3 cents per cigarette;

(b) 3.3 cents per tobacco stick; and

(c) 2.04 cents per gram of loose tobacco.

R.S., 1985, c. E-15, s. 30; R.S., 1985, c. 7 (2nd Supp.), s. 12; 1991, c. 42, s. 1.

Exemption for small retail inventory

31. Tax under this Part in respect of the inventory of all taxed tobacco of a person that is held at the beginning of February 27, 1991 at a separate retail establishment of the person is payable only on the quantity of that inventory in excess of 200,000 units.

R.S., 1985, c. E-15, s. 31; R.S., 1985, c. 7 (2nd Supp.), s. 12; 1991, c. 42, s.1.

Taking of inventory

32. Every person liable to pay tax under this Part shall, for the purposes of this Part, determine that person's inventory of all taxed tobacco.

R.S., 1985, c. E-15, s. 32; R.S., 1985, c. 7 (2nd Supp.), s. 12; 1991, c. 42, s. 1.

Returns

33. (1) Every person liable to pay tax under this Part shall, on or before May 31, 1991, file in the prescribed manner a true return in the prescribed form and containing the prescribed information.

Separate returns

(2) A person authorized under subsection 239(2) to file separate returns under Part IX in respect of a separate branch or division may file separate returns under this Part in respect of that branch or division.

R.S., 1985, c. E-15, s. 33; R.S., 1985, c. 7 (2nd Supp.), s. 12; 1991, c. 42, s. 1.

Payment

34. (1) Every person shall, for each of the months of May, June, July and August 1991, pay to the Receiver General an instalment equal to one quarter of the total tax payable by the person under this Part and the instalment for a month shall be paid on or before the last day of the month.

Interest and penalty

(2) Subject to subsections (3) to (6), where a person fails to pay to the Receiver General all of an instalment referred to in subsection (1) on or before the particular day on or before which the person would be required to pay the instalment if the Act enacting this Part were assented to before May 31, 1991, the person shall pay interest at the prescribed rate, and a penalty of six per cent per year, in respect of each day that is subsequent to the particular day and on which all or part of the total instalment, interest and penalty is outstanding, calculated on the total of the amount of the instalment, interest and penalty that is outstanding at the beginning of that subsequent day.

No penalty

(3) No penalty is payable under subsection (2) in respect of any day that is before the second day following the day on which the Act enacting this Part is assented to.

Minimum penalty and interest

(4) No penalty or interest in respect of an amount payable by a person under this section is payable if, at the time the person pays the amount, the total of that penalty and interest otherwise payable is less than twenty-five dollars.

Extension

(5) The Minister may at any time extend in writing the time for filing a return, or paying an instalment, under this Part and, where the Minister so extends the time,

(a) the return shall be filed or the instalment shall be paid within the time as so extended;

(b) interest accrues under subsection (2) as if the time had not been as so extended; and

(c) any penalty under subsection (2) in respect of the instalment is payable only from the expiration of the time as so extended.

Security

(6) Where on a particular day the Minister holds security under section 80.1 for the payment of amounts payable under this Part by a person and any such amount is not paid on or before the day on or before which it is required to be paid under this Part, penalties under this section shall apply in respect of the particular day only in respect of the amount, if any, by which the total of all tax, instalments, penalty, interest and other amounts in respect of which the security was accepted that were outstanding on the particular day exceeds the value of the security at the time it was accepted by the Minister.

R.S., 1985, c. E-15, s. 34; R.S., 1985, c. 7 (2nd Supp.), s. 12; 1991, c. 42, s. 1; 2000, c. 30, s. 9(F).

PART V.1

[Repealed, 2000, c. 30, s. 10]

PART VI
CONSUMPTION OR SALES TAX

Interpretation

Definitions

42. In this Part,

"duty paid value" «valeur à l'acquitté»

"duty paid value" means the value of the article as it would be determined for the purpose of calculating an ad valorem duty on the importation of the article into Canada under the laws relating to the customs and the Customs Tariff whether the article is in fact subject to ad valorem or other duty or not, plus the amount of the customs duties, if any, payable thereon;

"licensed manufacturer" «fabricant titulaire de licence»

"licensed manufacturer" means any manufacturer or producer licensed under this Part;

"licensed wholesaler" «marchand en gros titulaire de licence»

"licensed wholesaler" means any wholesaler, jobber or other dealer licensed under this Part;

"partly manufactured goods" «marchandises partiellement fabriquées»

"partly manufactured goods" means

(a) goods that are to be incorporated into or form a constituent or component part of an article that is subject to the consumption or sales tax, if the tax on the article has not yet been levied pursuant to section 50, or

(b) goods that are to be prepared for sale as goods subject to the consumption or sales tax by assembling, blending, mixing, cutting to size, diluting, bottling, packaging or repackaging the goods or by applying coatings or finishes to the goods, other than goods that are so prepared in a retail store for sale in that store exclusively and directly to consumers,

and the Minister is the sole judge as to whether or not goods are partly manufactured goods;

"producer or manufacturer" «producteur ou fabricant»

"producer or manufacturer" includes any printer, publisher, lithographer, engraver or commercial artist, but does not include, for the purposes of this Part and the Schedules, any restaurateur, caterer or other person engaged in the business of preparing in a restaurant, centralized kitchen or similar establishment food or drink, whether or not the food or drink is for consumption on the premises;

"sale price" «prix de vente»

"sale price", for the purpose of determining the consumption or sales tax, means

(a) except in the case of wines, the aggregate of

(i) the amount charged as price before any amount payable in respect of any other tax under this Act is added thereto,

(ii) any amount that the purchaser is liable to pay to the vendor by reason of or in respect of the sale in addition to the amount charged as price, whether payable at the same or any other time, including, without limiting the generality of the foregoing, any amount charged for, or to make provision for, advertising, financing, servicing, warranty, commission or any other matter, and

(iii) the amount of the excise duties payable under the Excise Act whether the goods are sold in bond or not,

and, in the case of imported goods, the sale price shall be deemed to be the duty paid value thereof, and

(b) in the case of wines, the aggregate of

(i) the amount charged as price including the amount of the excise tax payable pursuant to section 27,

(ii) any amount that the purchaser is liable to pay to the vendor by reason of or in respect of the sale in addition to the amount charged as price, whether payable at the same or any other time, including, without limiting the generality of the foregoing, any amount charged for, or to make provision for, advertising, financing, servicing, warranty, commission or any other matter, and

(iii) the amount of excise duties payable under the Excise Act whether the goods are sold in bond or not,

and, in the case of imported wines, the sale price shall be deemed to be the aggregate of the duty paid value thereof and the amount of the excise tax payable pursuant to section 27.

R.S., 1985, c. E-15, s. 42; R.S., 1985, c. 15 (1st Supp.), s. 16, c. 7 (2nd Supp.), s. 13.

Person deemed manufacturer or producer

43. Where a person has, in Canada,

(a) put a clock or watch movement into a clock or watch case,

(b) put a clock or watch movement into a clock or watch case and added a strap, bracelet, brooch or other accessory thereto, or

(c) set or mounted one or more diamonds or other precious or semi-precious stones, real or imitation, in a ring, brooch or other article of jewellery,

he shall, for the purposes of this Part, be deemed to have manufactured or produced the watch, clock, ring, brooch or other article of jewellery in Canada.

R.S., c. E-13, s. 26.

Manufacturer of beverages in retail outlet deemed not to be manufacturer

43.1 Where a person manufactures or produces in a retail outlet carbonated beverages or non-carbonated fruit flavoured beverages, other than alcoholic beverages, having less than twenty-five per cent by volume of natural fruit, for sale in that outlet exclusively and directly to consumers for immediate consumption, he shall, for the purposes of this Part, be deemed not to be, in relation to any such beverage so manufactured or produced by him, the manufacturer or producer thereof.

R.S., 1985, c. 7 (2nd Supp.), s. 14.

44. [Repealed, R.S., 1985, c. 7 (2nd Supp.), s. 15]

Retreader of tires deemed manufacturer

45. A person engaged in the business of retreading tires shall, for the purposes of this Part, be deemed to be the manufacturer or producer of tires retreaded by him, and tires retreaded by him for or on behalf of any other person shall be deemed to be sold, at the time they are delivered to that other person, at a sale price equal to the retreading charge.

R.S., c. E-13, s. 26.

Deemed sale

45.1 For the purposes of this Part, a person who, pursuant to a contract for labour, manufactures or produces goods from any article or material supplied by another person, other than a licensed manufacturer, for delivery to that other person shall be deemed to have sold the goods, at a sale price equal to the charge made under the contract in respect of the goods, at the time they are delivered to that other person.

R.S., 1985, c. 15 (1st Supp.), s. 17.

Calculation of sale price and duty paid value

46. For the purpose of determining the consumption or sales tax payable under this Part,

(a) in calculating the sale price of goods manufactured or produced in Canada, there shall be included the amount charged as price for or in respect of

(i) the wrapper, package, box, bottle or other container in which the goods are contained, and

(ii) any other goods contained in or attached to the wrapper, package, box, bottle or other container;

(b) in calculating the duty paid value of imported goods that, when imported, are wrapped, packaged, put up in boxes or bottles or otherwise prepared for sale, there shall be added to the value of the goods as determined in the manner prescribed in this Part the value, similarly determined, of the wrapper, package, box, bottle or other container in which the goods are contained; and

(c) in calculating the sale price of goods manufactured or produced in Canada, there may be excluded

(i) any fees paid to the Government of Canada or the government of a province for the inspection, marking, stamping or certification thereof in respect of capacity, accuracy, standard or safety, if the fees are shown as separate items on the manufacturers' sales invoices, and

(ii) under such circumstances as the Governor in Council may, by regulation, prescribe, an amount representing

(A) the cost of erection or installation of the goods incurred by the manufacturer or producer where the goods are sold at a price that includes erection or installation, or

(B) the cost of transportation of the goods incurred by the manufacturer or producer in transporting the goods between premises of the manufacturer or producer in Canada, or in delivering the goods from the premises of the manufacturer or producer in Canada to the purchaser, where the goods are sold at a price that includes those costs of transportation,

determined in such manner as the Governor in Council may, by regulation, prescribe.

R.S., 1985, c. E-15, s. 46; R.S., 1985, c. 12 (4th Supp.), s. 13.

Deemed manufacturer of photographic prints, etc.

47. Where a person has, in Canada,

(a) processed exposed photographic film supplied by a customer to make a negative, transparency, photographic print or other photographic related good,

(b) produced or manufactured a negative, transparency, photographic print or other photographic related good from any good supplied by a customer, or

(c) sold a right to the processing, production or manufacture by him of goods described in paragraph (a) or (b),

he shall, for the purposes of this Part, be deemed to be the producer or manufacturer of the negative, transparency, photographic print or other photographic related good, and the goods shall be deemed to be sold

(d) in the case mentioned in paragraph (a) or (b), at the time the goods are delivered to the customer, and

(e) in the case mentioned in paragraph (c), at the time the right is sold,

and the charge made shall be deemed to be the sale price.

1980-81-82-83, c. 68, s. 8.

Application by manufacturer

48. (1) Any licensed manufacturer may make an application in writing to the Minister to be considered, for the purposes of this Act, as the manufacturer or producer of all other goods, in this section and section 49 referred to as "similar goods", that the licensed manufacturer sells in conjunction with his sales of goods of his manufacture or production in Canada or that are of the same class as goods the licensed manufacturer manufactures or produces in Canada.

Additional information

(2) The Minister may at any time request an applicant under this section to supply additional information in respect of his application.

Consideration of application

(3) On receiving an application, the Minister shall decide whether to approve or reject the application and shall send to the applicant a notice in writing setting out his decision and, where the Minister approves the application, the date on and after which the approval is effective.

Effect of approval

(4) Subject to subsection 49(2), on and after the date set out in a notice of decision pursuant to subsection (3), the applicant shall be deemed to be the manufacturer or producer of all similar goods that the applicant sells and those goods shall be deemed to be

(a) at the time the applicant acquires them,

(i) for the purposes of this Part, partly manufactured goods, and

(ii) for the purposes of Parts III and IV, goods described in paragraph 23(7)(b); and

(b) thereafter, goods produced or manufactured in Canada.

R.S., 1985, c. E-15, s. 48; R.S., 1985, c. 15 (1st Supp.), s. 18, c. 12 (4th Supp.), s. 14.

Revocation of approval

49. (1) The Minister may at any time, and shall on request of the applicant, revoke any approval of an application given pursuant to subsection 48(3) and, where the Minister does so, he shall send to the applicant a notice in writing of the revocation setting out the date on and after which the revocation is effective.

Effect of revocation

(2) On and after the date set out in a notice of revocation pursuant to subsection (1),

(a) subsection 48(4) ceases to apply to the applicant; and

(b) all taxes imposed by this Act are payable, at the rate in force on that date, on any similar goods then in possession of the applicant that have been acquired free of tax by virtue of subsection 48(4) and shall be computed

(i) on the duty paid value of the goods, if they were imported by the applicant, or

(ii) on the price for which the goods were purchased by the applicant, if they were not imported by him, and the price shall include the amount of the excise duties on goods sold in bond.

Presumption

(2.1) For the purposes of subparagraph (2)(b)(ii), where an applicant has purchased goods from, or property in goods has otherwise been transferred to an applicant by, a person with whom the applicant was not dealing at arm's length at the time of the purchase or transfer 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 applicant and that person had been dealing at arm's length at that time, the applicant shall be deemed to have purchased the goods at that time for a price equal to the reasonable price.

Restriction on re-application

(3) Where an application is rejected pursuant to subsection 48(3) or approval of an application is revoked pursuant to subsection (1), the applicant may not make an application under subsection 48(1) within two years after the date of the notice of decision or the date on and after which the revocation is effective, as the case may be.

R.S., 1985, c. E-15, s. 49; R.S., 1985, c. 12 (4th Supp.), s. 15.

Tax Imposed

Consumption or sales tax

50. (1) There shall be imposed, levied and collected a consumption or sales tax at the rate prescribed in subsection (1.1) on the sale price or on the volume sold of all goods

(a) produced or manufactured in Canada

(i) payable, in any case other than a case mentioned in subparagraph (ii) or (iii), by the producer or manufacturer at the time when the goods are delivered to the purchaser or at the time when the property in the goods passes, whichever is the earlier,

(ii) payable, in a case where the contract for the sale of the goods, including a hire-purchase contract and any other contract under which property in the goods passes on satisfaction of a condition, provides that the sale price or other consideration shall be paid to the manufacturer or producer by instalments (whether the contract provides that the goods are to be delivered or property in the goods is to pass before or after payment of any or all instalments), by the producer or manufacturer at the time each of the instalments becomes payable in accordance with the terms of the contract, and

(iii) payable, in a case where the goods are for use by the producer or manufacturer thereof, by the producer or manufacturer at the time the goods are appropriated for use;

(b) imported into Canada, payable in accordance with the provisions of the Customs Act by the importer, owner or other person liable to pay duties under that Act;

(c) sold by a licensed wholesaler, payable by him at the time of delivery to the purchaser, and the tax shall be computed

(i) on the duty paid value of the goods, if they were imported by the licensed wholesaler, or

(ii) on the price for which the goods were purchased by the licensed wholesaler, if they were not imported by him, which price shall include the amount of the excise duties on goods sold in bond; or

(d) retained by a licensed wholesaler for his own use or for rental by him to others, payable by the licensed wholesaler at the time the goods are put to his own use or first rented to others, and the tax shall be computed

(i) on the aggregate of the duty paid value of the goods and the amount of any taxes payable on the goods under section 27, if they were imported by the licensed wholesaler, or

(ii) on the aggregate of the price paid by the licensed wholesaler for the goods, the amount of any excise duties payable on the goods if sold in bond and the amount of any taxes payable on the goods under section 27, if they were not imported by the licensed wholesaler.

Rates of tax

(1.1) Tax imposed by subsection (1) is imposed

(a) in the case of wines, and goods on which a duty of excise is imposed under the Excise Act or would be if the goods were produced or manufactured in Canada, at the rate of nineteen per cent;

(b) in the case of goods enumerated in Schedule IV (Construction Materials and Equipment for Buildings), at the rate of nine per cent;

(c) in the case of regular gasoline, unleaded gasoline, premium leaded gasoline, premium unleaded gasoline and diesel fuel, at the rate set opposite the applicable item in Schedule II.1, adjusted according to subsection 50.1(1) and multiplied by the rate of tax specified in paragraph (d), expressed as a decimal number and multiplied by one hundred;

(c.1) in the case of goods imported into Canada and classified under tariff item No. 9804.30.00 of Schedule I to the Customs Tariff, at the rate of tax specified in paragraph (d); and

(d) in any other case, at the rate of thirteen and one-half per cent.

Deemed sale and delivery of gasoline or diesel fuel

(2) Notwithstanding subsection (1), where gasoline or diesel fuel is delivered to a retail outlet by or on behalf of the manufacturer or producer thereof, the gasoline or diesel fuel shall be deemed to have been sold and delivered to a purchaser thereof.

Transitional

(2.1) Notwithstanding subsection (1), where gasoline, diesel fuel or aviation fuel was, immediately prior to March 1, 1987, held in inventory by or on behalf of a person described in paragraph (e) of the definition "manufacturer or producer" in subsection 2(1), as that subsection read immediately prior to March 1, 1987, who was a licensed manufacturer under this Act of gasoline, diesel fuel or aviation fuel solely by virtue of that paragraph, and the consumption or sales tax thereon had not been paid or become payable on or before February 28, 1987, the gasoline, diesel fuel or aviation fuel shall be deemed to have been sold and delivered to a purchaser thereof immediately prior to March 1, 1987.

(3) and (4) [Repealed, R.S., 1985, c. 7 (2nd Supp.), s. 16]

Sales tax not payable on certain goods

(5) Notwithstanding anything in subsection (1), the consumption or sales tax shall not be payable on goods

(a) sold by a licensed manufacturer to another licensed manufacturer if the goods are partly manufactured goods;

(b) imported by a licensed manufacturer if the goods are partly manufactured goods;

(c) imported by a licensed wholesaler otherwise than for his own use or for rental to others, on importation;

(d) sold by a licensed manufacturer to a licensed wholesaler otherwise than for his own use or for rental to others;

(e) sold by a licensed wholesaler to a licensed manufacturer if the goods are partly manufactured goods;

(f) sold by a licensed wholesaler to another licensed wholesaler, but if a licensed wholesaler sells goods to another licensed wholesaler at a price less than the value on which the tax would be computed under paragraph (1)(c), the vendor forthwith becomes liable to pay the tax on the difference between the value and his sale price;

(g) sold to or imported by a person described in paragraph (d) of the definition "manufacturer or producer" in subsection 2(1) who is a licensed manufacturer under this Act, if the goods are cosmetics;

(h) [Repealed, R.S., 1985, c. 12 (4th Supp.), s. 16]

(i) being new motor vehicles designed for highway use, or chassis therefor, imported by a person described in paragraph (g) of the definition "manufacturer or producer" in subsection 2(1) who is a manufacturer licensed for the purposes of this Part;

(j) being new motor vehicles designed for highway use, or chassis therefor, sold to a person described in paragraph (h) of the definition "manufacturer or producer" in subsection 2(1) who is a manufacturer licensed for the purposes of this Part;

(k) sold to or imported by a person described in paragraph (i) of the definition "manufacturer or producer" in subsection 2(1) who is a licensed manufacturer under this Act, if the goods are goods enumerated in Schedule III.1; or

(l) sold or leased to, or imported by, a person described in paragraph (j) of the definition "manufacturer or producer" in subsection 2(1) who is a licensed manufacturer under this Act, if the goods are prerecorded video cassettes that are new or have not been used in Canada.

Where exemption not applicable

(6) Where any person, other than the manufacturer or producer, importer, owner, licensed wholesaler or jobber mentioned in this section, acquires from or against any one of those persons the right to sell any goods, whether as a result of the operation of law or of any transaction not taxable under this section, the sale of the goods by him shall be taxable as if made by the manufacturer or producer, importer, owner, licensed wholesaler or jobber, as the case may be, and the person so selling is liable to pay the tax.

Diversion of certain articles to non-exempt use, sale, etc.

(7) Where a motor vehicle, tractor or aircraft or a ship or other marine vessel, or a machine or tool for operation by a motor vehicle or tractor or a part or equipment for an aircraft or ship or other marine vessel

(a) has been purchased or imported by a person for a use by that person that renders the purchase or importation exempt from tax imposed under this Part and Part III or either of those Parts, or

(b) has been purchased as described in subsection 68.19(1),

the following rules apply:

(c) if within five years of the time the article was first purchased or, if imported, released under the Customs Act for a use rendering the purchase or release exempt from tax imposed under this Part and Part III or either of those Parts, the article is applied to any use, other than of a casual nature, for which it could not, at the time of such first purchase, have been purchased or released exempt from the tax, the article shall be deemed to have been sold at the time of its first application to that use and tax imposed under this Part and Part III or either of those Parts, shall be imposed, levied and collected at the time of its first application to that use,

(i) in the case of an article mentioned in Schedule I having a specific rate of tax set opposite the item, at the lesser of the specific rate applicable at that time, and the specific rate, if any, applicable in the case of the article at the time the article was first purchased or imported for a use rendering the purchase or importation exempt from the tax or taxes, and

(ii) in any other case, on the sale price that would have been reasonable in the circumstances if the article had been sold, at the time of its first application to that use, to a person with whom the person so applying the article was dealing at arm's length,

payable by the owner of the article at the time of its first application to the use rendering it subject to tax; and

(d) if within five years of the time the article was first purchased or, if imported, released under the Customs Act for a use rendering the purchase or release exempt from tax imposed under this Part and Part III or either of those Parts, the article is sold or leased, the article shall be deemed to have been sold at the time of the sale or lease and tax imposed under this Part and Part III or either of those Parts, shall, if applicable, be imposed, levied and collected at the time of the sale or lease,

(i) in the case of an article mentioned in Schedule I having a specific rate of tax set opposite the item, at the lesser of the specific rate applicable at that time, and the specific rate, if any, applicable in the case of the article at the time the article was first purchased or imported for a use rendering the purchase or importation exempt from the tax or taxes, and

(ii) in any other case,

(A) where the article was sold, on the sale price, or

(B) where the article was leased by a person to another person, on the sale price that would have been reasonable in the circumstances if the article had been sold, at the time of the lease, to that other person,

payable by the person who sold or leased the article.

Diversion of fuel

(8) Where fuel that has been purchased or imported for heating or lighting is sold or appropriated by the purchaser or importer for a purpose for which the fuel could not have been purchased or imported exempt from tax under this Part at the time of the purchase or importation, the tax imposed under this Part shall be payable by the purchaser or importer

(a) where the fuel is sold, at the time of delivery to the person to whom it is sold, computed at the rate of tax in force at that time

(i) in the case of gasoline or diesel fuel, on the volume sold, and

(ii) in any other case, on the sale price; and

(b) where the fuel is appropriated, at the time of the appropriation, computed at the rate of tax in force at that time

(i) in the case of gasoline or diesel fuel, on the volume appropriated, and

(ii) in any other case, on the sale price that would have been reasonable in the circumstances if the fuel had been sold, at that time, to a person with whom the purchaser or importer was dealing at arm's length.

Definition of "wine"

(9) In this section, "wine" has the meaning given that term by section 25.

R.S., 1985, c. E-15, s. 50; R.S., 1985, c. 15 (1st Supp.), s. 19, c. 1 (2nd Supp.), s. 190, c. 7 (2nd Supp.), s. 16, c. 42 (2nd Supp.), ss. 4, 5, c. 12 (4th Supp.), s. 16; 1988, c. 65, s. 114; 1989, c. 22, s. 3.

Adjustment of rates of tax on certain petroleum products

50.1 (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.

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.

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.

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.

R.S., 1985, c. 7 (2nd Supp.), s. 17, c. 42 (2nd Supp.), s. 6, c. 12 (4th Supp.), s. 17.

Goods exempted

51. (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).

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.

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.

R.S., 1985, c. E-15, s. 51; R.S., 1985, c. 7 (2nd Supp.), s. 18.

Appropriation by manufacturer or producer

52. (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.

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.

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.

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.

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.

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.

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.

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

Licences

Manufacturers' licences

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

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.

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.

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.

R.S., c. E-13, s. 31; 1976-77, c. 15, s. 9; 1980-81-82-83, c. 68, s. 13.

Licensed wholesaler or jobber

55. (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.

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).

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.

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.

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.

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.

R.S., 1985, c. E-15, s. 55; R.S., 1985, c. 1 (2nd Supp.), s. 191.

Cancellation of licence

56. (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.

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.

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 Parts III and IV.

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.

R.S., 1985, c. E-15, s. 56; R.S., 1985, c. 1 (2nd Supp.), s. 192; 1990, c. 45, s. 8.

Evasion

Powers of Minister

57. (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.

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.

R.S., 1985, c. E-15, s. 57; R.S., 1985, c. 1 (2nd Supp.), s. 193.

Deemed sale price

58. (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.

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.

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.

R.S., 1985, c. E-15, s. 58; R.S., 1985, c. 12 (4th Supp.), s. 19.

PART VII
GENERAL

Interpretation

Definitions

58.1 (1) In this Part,

"assessment" «cotisation»

"assessment" means an assessment under subsection 81.1(1) and includes a variation of an assessment and a reassessment;

"Board" [Repealed, R.S., 1985, c. 47 (4th Supp.), s. 52]

"Department" [Repealed, 1999, c. 17, s. 149]

"Deputy Minister" [Repealed, 1999, c. 17, s. 149]

"Tribunal" «Tribunal»

"Tribunal" means the Canadian International Trade Tribunal established by subsection 3(1) of the Canadian International Trade Tribunal Act.

Same meaning

(2) Words and expressions used in this Part in connection with a tax under any other Part have the same meaning as in that other Part unless the contrary intention appears.

Remittance

(3) Unless the contrary intention appears, any reference in this Part to "pay" or "payment", in relation to taxes imposed under this Act, shall be construed as including, in relation to taxes imposed under Part II or II.2, a reference to "remit" or "remittance", and other parts of speech and grammatical forms of those words shall be construed in a corresponding manner.

R.S., 1985, c. 15 (1st Supp.), s. 22, c. 7 (2nd Supp.), s. 20, c. 12 (4th Supp.), s. 20, c. 47 (4th Supp.), s. 52; 1992, c. 1, s. 65; 1994, c. 13, s. 7; 1999, c. 17, s. 149.

Regulations

Regulations

59. (1) The Minister of Finance or the Minister of National Revenue, as the case may be, may make such regulations as he deems necessary or advisable for carrying out the provisions of this Act.

Delegation of powers

(2) The Minister may authorize a designated officer or officer of a designated class of officers to exercise powers or perform duties of the Minister, including judicial or quasi-judicial powers or duties, under this Act.

(3) [Repealed, 1990, c. 45, s. 9]

Regulations prescribing rate of interest

(3.1) The Governor in Council may, on the recommendation of the Minister of Finance, make regulations prescribing a rate of interest or rules for determining a rate of interest for the purposes of this Act.

Regulations designating ships' stores

(3.2) The Governor in Council may make regulations designating, for the purposes of sections 23, 68.17 and 70, certain classes of goods as ships' stores for use on board a conveyance within such class of conveyances as may be prescribed in the regulations and limiting the quantity of such goods that may be so used within such period of time as may be prescribed in the regulations.

Regulations respecting reasonable price

(3.3) The Governor in Council may make regulations respecting the method for determining the reasonable sale price or reasonable price, as the case may be, for any goods for the purposes of subsections 23(10) and 49(2.1), subparagraphs 50(7)(c)(ii) and (d)(ii), subsection 50(8) and sections 52 and 58.

Enforcement

(4) The regulations shall be enforced in the same manner as any provision of this Act.

Oaths and declarations

(5) Any person designated by the Minister may receive or administer any oath or declaration required by this Act, or by any regulation made under this Act, and every person so designated has, with respect to any such oath or declaration, has all the powers of a commissioner for taking affidavits.

R.S., 1985, c. E-15, s. 59; R.S., 1985, c. 15 (1st Supp.), s. 23, c. 7 (2nd Supp.), s. 21, c. 12 (4th Supp.), s. 21; 1990, c. 45, s. 9; 1993, c. 25, s. 58, c. 27, s. 1.

Stamps

Preparation and use of stamps

60. The Minister may direct the preparation and use of stamps for the purposes of this Act.

R.S., c. E-13, s. 36.

Cancellation

61. In any case in which an adhesive stamp is required to be cancelled, and no other method of cancellation is prescribed, the stamp shall be deemed to be cancelled if lines or marks are drawn across or impressed thereon so as effectually to render the stamp incapable of being used for any other instrument.

R.S., c. E-13, s. 37.

Liability

62. Every person who, being required by or pursuant to this Act to affix or cancel stamps, fails to do so as required is liable to Her Majesty for the amount of stamps he should have affixed or cancelled and that amount is recoverable in the Federal Court, or in any other court of competent jurisdiction as a debt due to Her Majesty.

R.S., c. E-13, s. 38; R.S., c. 10(2nd Supp.), s. 64.

Appointment of stamp vendors

63. (1) The Minister may appoint postmasters or other officers of the Crown to sell stamps prepared for the purposes of this Act and he may authorize other persons to be vendors who may purchase stamps so prepared for resale.

Reduced price

(2) The Governor in Council may by regulation fix a reduced price at which stamps prepared for the purposes of this Act may be sold to persons authorized by the Minister to be vendors under subsection (1).

R.S., c. E-13, s. 39.

Licences

Application for licence

64. (1) Every person who is required, by or pursuant to Part III or IV, to pay taxes shall, from time to time as required by the regulations, apply for a licence in respect of that Part.

Granting of licence and exemption

(2) The Minister may grant a licence to any person applying therefor under subsection (1) and may, by regulation, exempt any person or class of persons from obtaining a licence under this section in respect of a specified Part, and any person who is a member of a class of small manufacturer or producer the members of which are exempted, pursuant to subsection 54(2), from payment of consumption or sales tax on goods manufactured or produced by them shall, whether or not he is a person or member of a class of persons exempted from obtaining a licence under this section, be exempt from payment of excise tax on goods manufactured or produced by him.

Cancellation of licences

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

R.S., 1985, c. E-15, s. 64; R.S., 1985, c. 12 (4th Supp.), s. 22.

Offence and punishment

65. Every person who fails to apply for a licence as required by this Act is guilty of an offence and liable to a fine not exceeding one thousand dollars.

R.S., c. E-13, s. 41.

Exported Goods

Exemption on exported goods

66. (1) Subject to subsection (2), the tax imposed by this Act is not payable if evidence satisfactory to the Minister is produced to establish

(a) that the goods in respect of which it is imposed have been exported from Canada by the manufacturer, producer or licensed wholesaler by whom the tax would otherwise be payable in accordance with any regulations made under this Act that are applicable thereto;

(b) in the case of spirits and fermented liquors (except wine), that the goods have been exported from Canada in bond; or

(c) that the goods in respect of which it is imposed have been sold by the operator of a duty free shop and have been exported from Canada by the purchaser of the goods, in accordance with the regulations made under the Customs Act.

Where exemption not applicable

(2) Subsection (1) does not apply in respect of taxes imposed under Part III in respect of tobacco products mentioned in Schedule II.

R.S., 1985, c. E-15, s. 66; R.S., 1985, c. 1 (2nd Supp.), s. 194, c. 7 (2nd Supp.), s. 22; 1993, c. 25, s. 59; 1995, c. 46, s. 2; 2000, c. 30, s. 11.

Exemption for tobacco products sold at duty free shop

66.1 The tax imposed under subsection 23(5) on tobacco products mentioned in Schedule II is not payable if evidence satisfactory to the Minister is produced to establish that the tobacco products have been sold by the operator of a duty free shop, in accordance with the regulations made under the Customs Act, and have been exported from Canada by the purchaser of the tobacco products in accordance with the regulations made under that Act.

1993, c. 25, s. 59.

Liability of the Crown

Taxes on goods imported by Crown

67. The taxes imposed by Parts III, IV and VI are applicable

(a) to goods imported by Her Majesty in right of Canada; and

(b) to goods imported by Her Majesty in right of a province.

R.S., c. E-13, s. 43; 1976-77, c. 10, s. 49.

Deductions, Refunds and Drawbacks

Payment where error

68. Where a person, otherwise than pursuant to an assessment, has paid any moneys in error, whether by reason of mistake of fact or law or otherwise, and the moneys have been taken into account as taxes, penalties, interest or other sums under this Act, an amount equal to the amount of those moneys shall, subject to this Part, be paid to that person if he applies therefor within two years after the payment of the moneys.

R.S., 1985, c. E-15, s. 68; R.S., 1985, c. 15 (1st Supp.), s. 24, c. 7 (2nd Supp.), ss. 23, 34.

Payment where goods exported

68.1 (1) Where tax under this Act has been paid in respect of any goods and a person has, in accordance with regulations made by the Minister, exported the goods from Canada, an amount equal to the amount of that tax shall, subject to this Part, be paid to that person if that person applies therefor within two years after the export of the goods.

Exception

(2) Subsection (1) does not apply in respect of taxes imposed under Part III in respect of tobacco products mentioned in Schedule II.

R.S., 1985, c. 7 (2nd Supp.), s. 34; 1993, c. 25, s. 60; 1995, c. 46, s. 3; 2000, c. 30, s. 12.

Payment where adjustment

68.11 Where tax under Part II has been remitted by a licensed air carrier and the carrier has, in accordance with subsection 18(1), made an adjustment or refund in respect of the tax, an amount equal to the amount of that adjustment or refund shall, subject to this Part, be paid to that carrier if it applies therefor within two years after the adjustment or refund.

R.S., 1985, c. 7 (2nd Supp.), s. 34.

Payment where adjustment

68.12 Where tax under Part II.1 has been paid by a licensee in respect of any taxable service and the licensee has made an adjustment or refund of the amount charged because of an error or because the service was not provided, or was only partially provided, by the licensee, an amount equal to the proportion of the amount of that tax that the amount of the adjustment or refund is of the amount charged shall, subject to this Part, be paid to the licensee if he applies therefor within two years after the adjustment or refund.

R.S., 1985, c. 7 (2nd Supp.), s. 34.

Payment where licence subsequently issued

68.13 Where tax under Part II.1 has been paid by a licensee in respect of any taxable service and the person, in this section referred to as the "purchaser", acquiring the service from the licensee

(a) was required at the time the amount charged to the purchaser for the service was paid or payable, whichever is the earlier, to apply for a licence under that Part and was thereafter issued such a licence, and

(b) provided the service, at a time when the purchaser was required to apply for a licence under that Part or held such a licence, to another person for an amount charged that was paid or payable, whichever is the earlier, at that time,

an amount equal to the proportion of the amount of that tax that the amount of the taxable sales of the service by the purchaser is of the amount of the total sales of the service by the purchaser shall, subject to this Part, be paid to the purchaser if he applies therefor within two years after the later of the time the service was provided by the purchaser and the time the licence was issued to the purchaser.

R.S., 1985, c. 7 (2nd Supp.), s. 34.

Payment where use by province

68.14 (1) Where tax under Part II.1 has been paid by a licensee in respect of any taxable service and Her Majesty in right of a province has acquired the service for any purpose other than

(a) provision to another person for an amount charged,

(b) use by any board, commission, railway, public utility, university, manufactory, company or agency owned, controlled or operated by the government of the province or under the authority of the legislature or the lieutenant governor in council of the province, or

(c) use by Her Majesty in that right, or by any agents or servants of Her Majesty in that right, for any commercial or mercantile purposes,

an amount equal to the amount of that tax shall, subject to this Part, be paid either to that licensee or to Her Majesty in that right, as the case may require, if the licensee or Her Majesty applies therefor within two years after Her Majesty acquired the service.

Exception

(2) No amount shall be paid pursuant to subsection (1) to a licensee who provides a taxable service to Her Majesty in right of a province in respect of which there is in force at the time the service is provided a reciprocal taxation agreement referred to in section 32 of the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act.

R.S., 1985, c. 7 (2nd Supp.), s. 34.

Definitions

68.15 (1) In this section,

"arm's length sale" «vente sans lien de dépendance»

"arm's length sale" means the provision of a taxable service for an amount charged by a licensee to a person with whom the licensee is dealing at arm's length at the time the service is provided;

"fiscal period" « exercice »

"fiscal period" means a fiscal period as determined for the purposes of the Income Tax Act.

Payment where bad debt

(2) Where tax under Part II.1 has been paid, or tax under Part II.2 has been remitted, by a licensee in respect of an arm's length sale occurring on or after February 16, 1984 and the licensee has established, in accordance with generally accepted accounting practices, that any debt owing to the licensee in respect of the sale has become in whole or in part a bad debt and has accordingly written off the debt as a bad debt in his books of account, an amount equal to the proportion of the amount of that tax that the amount of the debt written off is of the aggregate of the amount charged for the taxable service and the amount of the tax shall, subject to this Part, be paid to that licensee if the licensee applies therefor in the two years after the end of his fiscal period during which the debt was so written off.

Recovery of payment

(3) Where a licensee recovers all or any part of a debt in respect of which an amount is paid to him pursuant to subsection (2), in this subsection referred to as the "refunded amount", that licensee shall forthwith pay to Her Majesty an amount equal to the proportion of the refunded amount that the amount of the debt so recovered is of the amount of the debt written off in respect of which the refunded amount was paid.

R.S., 1985, c. 7 (2nd Supp.), s. 34, c. 12 (4th Supp.), s. 23; 1999, c. 31, ss. 230(F), 248(F).

Payment where adjustment

68.151 Where tax under Part II.2 has been remitted by a licensee and the licensee has, in accordance with subsection 21.31(1), made an adjustment or refund in respect of the tax, an amount equal to the amount of that adjustment or refund shall, subject to this Part, be paid to that licensee if the licensee applies therefor within two years after he made the adjustment or refund.

R.S., 1985, c. 12 (4th Supp.), s. 24.

Payment where licence subsequently issued

68.152 Where tax under Part II.2 has been paid by a person in respect of any taxable service acquired by that person and that person

(a) was required, at the time the tax became payable, to apply for a licence under that Part and was thereafter issued such a licence, and

(b) at a time when that person was required to apply for a licence under that Part or held such a licence,

(i) provided the service to another person for an amount charged that was paid or payable, whichever is the earlier, at that time, or

(ii) used the service directly in providing another taxable service, other than a paging service, to another person,

an amount equal to the proportion of the amount of that tax that the uses referred to in paragraph (b) of the taxable service are of the total use of that taxable service by that person shall, subject to this Part, be paid to that person if he applies therefor within two years after the later of the time the service was so provided or used by that person and the time the licence was issued to that person.

R.S., 1985, c. 12 (4th Supp.), s. 24.

Payment where resale

68.153 Where tax under Part II.2 has been paid in respect of any taxable service by a person who was not a telecommunications carrier at the time the tax became payable and that person has provided the service for an amount charged to another person who acquired the service for a use described in subsection 21.28(1) or (2) and held a licence under that Part or Part II.1 at the time of that acquisition, an amount equal to the proportion of the amount of that tax that the provision of that service to that other person is of the total use of that service by that person shall, subject to this Part, be paid to that person if he applies therefor within two years after he provided the service to that other person.

R.S., 1985, c. 12 (4th Supp.), s. 24.

Payment where certain uses of gasoline

68.16 (1) Where tax under Part III has been paid in respect of any gasoline and the gasoline has been purchased by

(a) Her Majesty in right of Canada or a province or any agent of Her Majesty in right of Canada or a province, before 1991,

(b) a municipality, before 1991,

(c) a person for commercial or business purposes, before 1991,

(d) a farmer for farming purposes, before 1991,

(e) a fisherman, hunter or trapper for commercial fishing, hunting or trapping, before 1991,

(f) a person under conditions for which relief from the consumption or sales tax is provided by any provision of this Act, other than subsection 50(5), before 1991,

(g) a person of such other class of persons as the Governor in Council may by regulation prescribe, before 1991,

(g.1) a registered charity, within the meaning of the Income Tax Act,

(g.2) a registered Canadian amateur athletic association, within the meaning of the Income Tax Act, or

(g.3) a person who has been certified by a qualified medical practitioner to be suffering from a permanent impairment of locomotion to such an extent that the use of public transportation by that person would be hazardous,

for the sole use of the purchaser and not for resale, an amount equal to that portion of the tax equal to one and one-half cents per litre shall, subject to this Part, be paid

(h) to the purchaser, or

(i) in accordance with such terms and conditions as the Governor in Council may by regulation prescribe, to the manufacturer, producer, wholesaler, jobber or other dealer,

if the purchaser applies therefor within two years after he purchased the gasoline.

Payment where certain uses of aviation gasoline

(2) Where tax under Part III has been paid in respect of any aviation gasoline and the aviation gasoline has been purchased before 1991 by a person

(a) providing public air transportation of passengers, freight or mail,

(b) providing air services directly related to

(i) the exploration and development of natural resources,

(ii) aerial spraying, seeding and pest control,

(iii) forestry,

(iv) fish cultivation,

(v) aerial construction operations using rotating wing aircraft,

(vi) aerial fire control, fire protection and fire fighting, or

(vii) map making operations, or

(c) engaged in the business of testing aircraft engines,

for the sole use of the purchaser to provide a service mentioned in paragraph (a) or (b) or to test aircraft engines, as the case may be, and not for resale or any other use, an amount equal to that portion of the tax equal to one and one-half cents per litre shall, subject to this Part, be paid

(d) to the purchaser, or

(e) in accordance with such terms and conditions as the Governor in Council may by regulation prescribe, to the manufacturer, producer, wholesaler, jobber or other dealer,

if the purchaser applies therefor within two years after he purchased the aviation gasoline.

Presumption

(3) Any payment made to a person referred to in paragraph (1)(i) or (2)(e) shall, for the purposes of subsection (4) and sections 98 to 102, be deemed to have been made to the purchaser.

Recovery of payment

(4) Where an amount has been paid pursuant to subsection (1) or (2) to a person who sells or uses the gasoline or aviation gasoline for a purpose that does not entitle its purchaser to that payment, the purchaser shall forthwith pay to Her Majesty an amount equal to the amount of the payment.

Commercial or business purposes

(5) For the purposes of paragraph (1)(c), the expression "commercial or business purposes" shall have such meaning as the Governor in Council may determine by regulation.

To whom payment made

(6) Where a person has purchased gasoline or aviation gasoline in respect of which tax under Part III has been paid and has recovered the cost of that gasoline or aviation gasoline, or any part thereof, from, in the case of gasoline, a person described in any of paragraphs (1)(a) to (g.3) or, in the case of aviation gasoline, a person described in any of paragraphs (2)(a) to (c), for the purpose of paying an amount pursuant to subsection (1) or (2), the Governor in Council may, by regulation, determine

(a) the manner in which the amount shall be calculated; and

(b) who, between the person who purchased the gasoline or aviation gasoline and the person from whom all or any part of the cost has been recovered, shall be deemed to be the purchaser of that gasoline or aviation gasoline.

R.S., 1985, c. 7 (2nd Supp.), s. 34; 1990, c. 45, s. 10; 1995, c. 36, s. 5; 1999, c. 31, s. 246(F).

Refund of tax where foreign taxes paid or where products for sale in foreign duty free shop

68.161 The Minister may refund to the manufacturer or producer of tobacco products (within the meaning assigned by section 23.1) the tax paid under subsection 23.2(1) in respect of the tobacco products where

(a) the manufacturer or producer provides to the Minister evidence satisfactory to the Minister that

(i) all taxes imposed on the tobacco products by the national government of the country to which the tobacco products were exported have been paid, or

(ii) the tobacco products were purchased by the operator of a foreign duty free shop (as defined in subsection 23.22(1)), for duty free sale by the operator in that shop; and

(b) the manufacturer or producer applies to the Minister for the repayment within two years after the tobacco products were exported.

1994, c. 29, s. 7; 1997, c. 26, s. 67.

Definitions

68.162 (1) In this section,

"inventory" « stock »

"inventory" of a person at any time means the goods that are owned at that time by the person and are for sale at that time in the ordinary course of the person's business;

"large retailer" « gros vendeur au détail »

"large retailer" means a retailer who applies for a tax rebate under subsection (2) of at least $50,000 in respect of tax-paid manufactured tobacco in the retailer's inventory at the beginning of February 9, 1994;

"retailer" « vendeur au détail »

"retailer" means a person who sells tax-paid manufactured tobacco primarily to consumers;

"tax-paid manufactured tobacco" « tabac fabriqué libéré de taxe »

"tax-paid manufactured tobacco" means manufactured tobacco in respect of which excise tax under section 23 became payable before February 9, 1994.

Tobacco inventory tax rebate

(2) The Minister may pay to a person who held tax-paid manufactured tobacco in the person's inventory at the beginning of February 9, 1994 a tax rebate equal to the total of

(a) $0.025 multiplied by the number of cigarettes and tobacco sticks in that inventory, and

(b) $0.025 multiplied by the number of grams of manufactured tobacco, other than cigarettes and tobacco sticks, in that inventory.

Conditions for rebate

(3) To qualify to receive a rebate under subsection (2), a person must

(a) determine the inventory of tax-paid manufactured tobacco held by the person at the beginning of February 9, 1994; and

(b) apply to the Minister for the rebate before August 9, 1994 in any form and manner that is authorized by the Minister.

One application per person

(4) A person shall not apply more than once for a rebate under subsection (2).

Submission of application by retailer

(5) A person making an application for a rebate under subsection (2) who is a retailer other than a large retailer shall submit the application to the person who supplied the retailer, during the six-month period ending immediately before February 9, 1994, with more tax-paid manufactured tobacco for resale in the ordinary course of the retailer's business than was supplied to the retailer by any other person for that purpose during that period.

Filing of application with Minister

(6) A person to whom an application is submitted under subsection (5) shall file the application with the Minister, in any form and manner that is authorized by the Minister, before the sixteenth day of the month after the month in which the person receives the application.

Filing of application by mail

(7) Where a person who is required by subsection (6) to file an application with the Minister does so by mailing the application, the application shall be deemed to have been filed with the Minister on the day on which the application was mailed, and the date of the postmark is evidence of that day.

Penalty for failure to comply with subsection (6)

(8) A person who does not comply with subsection (6) is liable to a penalty of

(a) $50 in respect of each application that is required by that subsection to be filed by the person and that the person does not file; and

(b) $5 in respect of each application that is required by that subsection to be filed by the person and that the person files later than the time within which the application is required by that subsection to be filed.

1994, c. 29, s. 7.

Definitions

68.163 (1) In this section,

"inventory" « stock »

"inventory" of a person at any time means the goods that are owned at that time by the person and are for sale at that time in the ordinary course of the person's business;

"on-reserve retailer" « détaillant situé dans une réserve »

"on-reserve retailer" means a retailer on a reserve in the Province of Ontario who is authorized under the Tobacco Tax Act, R.S.O. 1990, c. T.10, to sell black stock cigarettes, in the ordinary course of the retailer's business, to Indian consumers in the province;

"reserve" « réserve »

"reserve" means a reserve as defined in subsection 2(1) of the Indian Act or an Indian settlement as defined in section 2 of the Indians and Bands on certain Indian Settlements Remission Order;

"separate retail establishment" « établissement de détail distinct »

"separate retail establishment" of a person means a retail establishment of the person that is geographically separate from other places of business of the person and at which, in the ordinary course of the person's business, the person regularly sells cigarettes to consumers;

"tax-paid cigarettes" « cigarettes libérées de taxe »

"tax-paid cigarettes" means cigarettes in respect of which excise tax under section 23 became payable before February 22, 1994 and that

(a) are marked or stamped in accordance with the Tobacco Tax Act, R.S.O. 1990, c. T.10, to clearly indicate that the cigarettes are intended for retail sale in the Province of Ontario, or

(b) are black stock cigarettes held for resale to on-reserve retailers by a supplier who has a permit under section 9 of that Act to purchase and sell black stock cigarettes.

Ontario cigarette inventory tax rebate

(2) The Minister may pay to a person who held tax-paid cigarettes in the person's inventory at the beginning of February 22, 1994 a tax rebate equal to $0.023 multiplied by the number of tax-paid cigarettes in that inventory in excess of the greater of

(a) 1,000,000 cigarettes, and

(b) the number of cigarettes obtained by multiplying 200,000 cigarettes by the number of separate retail establishments of the person in the Province of Ontario on February 22, 1994.

Conditions for rebate

(3) To qualify to receive a rebate under subsection (2), a person must

(a) determine the inventory of tax-paid cigarettes held by the person at the beginning of February 22, 1994; and

(b) apply to the Minister for the rebate before August 22, 1994 in any form and manner that is authorized by the Minister.

One application per person

(4) A person shall not apply more than once for a rebate under subsection (2).

1994, c. 29, s. 7.

Definitions

68.164 (1) In this section,

"inventory" « stock »

"inventory" of a person at any time means the goods that are owned at that time by the person and are for sale at that time in the ordinary course of the person's business;

"separate retail establishment" « établissement de détail distinct »

"separate retail establishment" of a person means a retail establishment of the person that is geographically separate from other places of business of the person and at which, in the ordinary course of the person's business, the person regularly sells cigarettes to consumers;

"tax-paid cigarettes" « cigarettes libérées de taxe »

"tax-paid cigarettes" means cigarettes in respect of which excise tax under section 23 became payable before February 9, 1994 and that are marked or stamped in accordance with the Tobacco Tax Act, R.S.Q. 1977, c. I-2, to clearly indicate that the cigarettes are intended for retail sale in the Province of Quebec.

Quebec cigarette inventory tax rebate

(2) The Minister may pay to a person who held tax-paid cigarettes in the person's inventory at the beginning of February 9, 1994 a tax rebate equal to $0.025 multiplied by the number of tax-paid cigarettes in that inventory in excess of the greater of

(a) 1,000,000 cigarettes, and

(b) the number of cigarettes obtained by multiplying 200,000 cigarettes by the number of separate retail establishments of the person in the Province of Quebec on February 9, 1994.

Conditions for rebate

(3) To qualify to receive a rebate under subsection (2), a person must

(a) determine the inventory of tax-paid cigarettes held by the person at the beginning of February 9, 1994; and

(b) apply to the Minister for the rebate before August 9, 1994 in any form and manner that is authorized by the Minister.

One application per person

(4) A person shall not apply more than once for a rebate under subsection (2).

1994, c. 29, s. 7.

Definitions

68.165 (1) In this section,

"band" « bande »

"band" has the same meaning as in subsection 2(1) of the Indian Act;

"council" « conseil »

"council" of a band has the same meaning as in subsection 2(1) of the Indian Act;

"designated retail vendor" « vendeur au détail désigné »

"designated retail vendor" means a retail vendor on a reserve in the Province of Nova Scotia who is designated in writing by the council of a band in Nova Scotia, and by the Provincial Tax Commission of the Department of Finance of the Province of Nova Scotia, as a vendor from whom Indians on the reserve may buy manufactured tobacco on which tax under Part III of the Revenue Act, S.N.S. 1995-96, c. 17, is not payable;

"inventory" « stock »

"inventory" of a person at any time means the goods that are owned at that time by the person and are for sale at that time in the ordinary course of the person's business;

"licensed wholesale vendor" « vendeur en gros titulaire de licence »

"licensed wholesale vendor" means a person who has a wholesale vendor's permit issued under Part III of the Revenue Act, S.N.S. 1995-96, c. 17;

"Nova Scotia retail vendor" « vendeur au détail de la Nouvelle-Écosse »

"Nova Scotia retail vendor" means a vendor, other than a designated retail vendor who is not a licensed wholesale vendor, who retails manufactured tobacco to consumers in the Province of Nova Scotia;

"reserve" « réserve »

"reserve" means a reserve as defined in subsection 2(1) of the Indian Act;

"separate retail establishment" « établissement de détail distinct »

"separate retail establishment" of a person means a retail establishment of the person that is geographically separate from other places of business of the person and at which, in the ordinary course of the person's business, the person regularly sells manufactured tobacco to consumers.

Reference date

(2) The reference date referred to in subsection (5) is the reference date specified as required under paragraph (3)(g).

Application of subsection (4)

(3) Subsection (4) applies where

(a) a licensed wholesale vendor makes an application to a licensed tobacco manufacturer for a reduction in the amount payable, or a refund of an amount paid, by the licensed wholesale vendor for manufactured tobacco that the licensed tobacco manufacturer has sold to the licensed wholesale vendor;

(b) the licensed wholesale vendor determines the licensed wholesale vendor's inventories at the beginning of April 15, 1994 of Atlantic manufactured tobacco, black stock manufactured tobacco and black stock cigarettes;

(c) the licensed wholesale vendor determines the licensed wholesale vendor's inventories at the beginning of June 1, 1994 of Atlantic manufactured tobacco and black stock manufactured tobacco;

(d) the licensed wholesale vendor specifies in the application a quantity of

(i) black stock cigarettes held in the inventory of the licensed wholesale vendor at the beginning of April 15, 1994,

(ii) Atlantic manufactured tobacco and black stock manufactured tobacco sold and delivered by the licensed wholesale vendor to Nova Scotia retail vendors after April 14, 1994 and before June 1, 1994, or

(iii) Atlantic manufactured tobacco held in the inventory of the licensed wholesale vendor at the beginning of June 1, 1994;

(e) the quantity of Atlantic manufactured tobacco, black stock manufactured tobacco and black stock cigarettes specified in the application by the licensed wholesale vendor has not been specified in any other application made by the licensed wholesale vendor for a reduction or refund in respect of which the licensed tobacco manufacturer or any other licensed tobacco manufacturer is entitled to a deduction under subsection (4);

(f) the total of the quantity of Atlantic manufactured tobacco, black stock manufactured tobacco and black stock cigarettes specified in the application and all other quantities of Atlantic manufactured tobacco, black stock manufactured tobacco and black stock cigarettes specified by the licensed wholesale vendor in applications to the licensed tobacco manufacturer or other licensed tobacco manufacturers for reductions or refunds in respect of which the licensed tobacco manufacturer or other licensed tobacco manufacturers are entitled to deductions under subsection (4) does not exceed the total quantity of Atlantic manufactured tobacco, black stock manufactured tobacco and black stock cigarettes determined under subsection (5) in relation to the licensed wholesale vendor;

(g) the licensed wholesale vendor specifies in the application either February 10, 1994 or April 14, 1994 as the reference date for the purposes of all applications each of which is an application by the licensed wholesale vendor for a reduction or refund in respect of which a licensed tobacco manufacturer may be entitled to a deduction under subsection (4), 68.166(4), 68.167(4) or 68.168(4);

(h) the application is made before January 1995, in any form and manner that is authorized by the Minister;

(i) the application is approved by the Minister of Finance of the Province of Nova Scotia; and

(j) in response to the application, the licensed tobacco manufacturer makes a reduction in the amount payable, or a refund of an amount paid, by the licensed wholesale vendor for manufactured tobacco.

Deduction from excise tax payable

(4) Where this subsection applies, there may be deducted, in computing the excise taxes payable under section 23 by the licensed tobacco manufacturer within two years after the reduction or refund referred to in paragraph (3)(j), an amount equal to the lesser of the amount of the reduction or refund and the amount in respect of the specified quantity of Atlantic manufactured tobacco, black stock manufactured tobacco and black stock cigarettes referred to in paragraph (3)(d) that is equal to the total of

(a) $0.01 multiplied by the number of cigarettes in the specified quantity of Atlantic manufactured tobacco, black stock manufactured tobacco and black stock cigarettes, and

(b) $0.0027 multiplied by the number of grams of black stock manufactured tobacco in the specified quantity of Atlantic manufactured tobacco, black stock manufactured tobacco and black stock cigarettes.

Limit on specified quantity

(5) For the purposes of paragraph (3)(f), the total quantity of Atlantic manufactured tobacco, black stock manufactured tobacco and black stock cigarettes determined under this subsection in relation to a licensed wholesale vendor is the total of

(a) the number of cigarettes, if any, determined by the formula

A + B + (C x D) -- F

E

where

A is the number of cigarettes that are Atlantic manufactured tobacco sold and delivered by the licensed wholesale vendor to Nova Scotia retail vendors after April 14, 1994 and before June 1, 1994,

B is the number of black stock cigarettes held in the inventory of the licensed wholesale vendor at the beginning of April 15, 1994 other than at a retail outlet of the licensed wholesale vendor,

C is the number of cigarettes that are Atlantic manufactured tobacco held in the inventory of the licensed wholesale vendor at the beginning of June 1, 1994 other than at a retail outlet of the licensed wholesale vendor,

D is the number of cigarettes that are Atlantic manufactured tobacco sold and delivered by the licensed wholesale vendor to Nova Scotia retail vendors in the three-month period ending on the reference date,

E is the number of cigarettes that are Atlantic manufactured tobacco sold and delivered by the licensed wholesale vendor in the three-month period ending on the reference date,

F is the lesser of

(i) the number of cigarettes that are Atlantic manufactured tobacco determined by the formula

B + (G x H) + K

J

where

B is the number of black stock cigarettes held in the inventory of the licensed wholesale vendor at the beginning of April 15, 1994 other than at a retail outlet of the licensed wholesale vendor,

G is the number of cigarettes that are Atlantic manufactured tobacco held in the inventory of the licensed wholesale vendor at the beginning of April 15, 1994 other than at a retail outlet of the licensed wholesale vendor,

H is the number of cigarettes that are Atlantic manufactured tobacco sold and delivered by the licensed wholesale vendor to Nova Scotia retail vendors in the three-month period ending on April 14, 1994,

J is the number of cigarettes that are Atlantic manufactured tobacco sold and delivered by the licensed wholesale vendor in the three-month period ending on April 14, 1994, and

K is the number of cigarettes that are Atlantic manufactured tobacco held at the beginning of April 15, 1994 in the inventories of the licensed wholesale vendor at the retail outlets of the licensed wholesale vendor in the Province of Nova Scotia, where the licensed wholesale vendor is also a Nova Scotia retail vendor, and

(ii) the greater of

(A) 1,000,000 cigarettes, and

(B) the number of cigarettes obtained by multiplying 200,000 cigarettes by the number of separate retail establishments of the licensed wholesale vendor in the Province of Nova Scotia on April 15, 1994, and

(b) the number of grams of black stock manufactured tobacco, if any, determined by the formula

L + (M x N) -- (Q x R) -- T

P S

where

L is the number of grams of black stock manufactured tobacco sold and delivered by the licensed wholesale vendor to Nova Scotia retail vendors after April 14, 1994 and before June 1, 1994,

M is the number of grams of black stock manufactured tobacco held in the inventory of the licensed wholesale vendor at the beginning of June 1, 1994 other than at a retail outlet of the licensed wholesale vendor,

N is the number of grams of black stock manufactured tobacco sold and delivered by the licensed wholesale vendor to Nova Scotia retail vendors in the three-month period ending on the reference date,

P is the number of grams of black stock manufactured tobacco sold and delivered by the licensed wholesale vendor in the three-month period ending on the reference date,

Q is the number of grams of black stock manufactured tobacco held in the inventory of the licensed wholesale vendor at the beginning of April 15, 1994 other than at a retail outlet of the licensed wholesale vendor,

R is the number of grams of black stock manufactured tobacco sold and delivered by the licensed wholesale vendor to Nova Scotia retail vendors in the three-month period ending on April 14, 1994,

S is the number of grams of black stock manufactured tobacco sold and delivered by the licensed wholesale vendor in the three-month period ending on April 14, 1994, and

T is the number of grams of black stock manufactured tobacco held at the beginning of April 15, 1994 in the inventories of the licensed wholesale vendor at the retail outlets of the licensed wholesale vendor in the Province of Nova Scotia, where the licensed wholesale vendor is also a Nova Scotia retail vendor.

New wholesale vendor

(6) Where a person has become a licensed wholesale vendor after April 14, 1994 and before June 1, 1994, paragraph (3)(g) does not apply in respect of the licensed wholesale vendor and the references in subsection (5) to "the reference date" shall be read as "May 31, 1994".

Where vendor sells wholesale and retail

(7) For the purposes of this section, where a licensed wholesale vendor is also a Nova Scotia retail vendor

(a) the Atlantic manufactured tobacco and black stock manufactured tobacco held at the beginning of April 15, 1994 in the inventory of the licensed wholesale vendor at a retail outlet of the licensed wholesale vendor in the Province of Nova Scotia (other than a retail outlet on a reserve) shall be deemed to have been sold and delivered by the licensed wholesale vendor to Nova Scotia retail vendors immediately after the beginning of April 15, 1994; and

(b) the Atlantic manufactured tobacco or black stock manufactured tobacco that is delivered by or on behalf of the licensed wholesale vendor to a retail outlet of the licensed wholesale vendor in the Province of Nova Scotia shall be deemed to be sold and delivered by the licensed wholesale vendor to a Nova Scotia retail vendor at the time it is delivered to that retail outlet.

1994, c. 29, s. 7; 2000, c. 30, s. 140.

Definitions

68.166 (1) In this section,

"inventory" « stock »

"inventory" of a person at any time means the goods that are owned at that time by the person and are for sale at that time in the ordinary course of the person's business;

"licensed retail vendor" « vendeur au détail titulaire de licence »

"licensed retail vendor" means a retail vendor licensed as such under the Tobacco Tax Act, R.S.N.B. 1973, c. T-7;

"licensed wholesale vendor" « vendeur en gros titulaire de licence »

"licensed wholesale vendor" means a wholesale vendor licensed as such under the Tobacco Tax Act, R.S.N.B. 1973, c. T-7;

"separate retail establishment" « établissement de détail distinct »

"separate retail establishment" of a person means a retail establishment of the person that is geographically separate from other places of business of the person and at which, in the ordinary course of the person's business, the person regularly sells manufactured tobacco to consumers.

Reference date

(2) The reference date referred to in subsection (5) is the reference date specified as required under paragraph (3)(g).

Application of subsection (4)

(3) Subsection (4) applies where

(a) a licensed wholesale vendor makes an application to a licensed tobacco manufacturer for a reduction in the amount payable, or a refund of an amount paid, by the licensed wholesale vendor for manufactured tobacco that the licensed tobacco manufacturer has sold to the licensed wholesale vendor;

(b) the licensed wholesale vendor determines the licensed wholesale vendor's inventories at the beginning of February 11, 1994 of Atlantic manufactured tobacco and black stock manufactured tobacco;

(c) the licensed wholesale vendor determines the licensed wholesale vendor's inventories at the beginning of June 1, 1994 of Atlantic manufactured tobacco and black stock manufactured tobacco;

(d) the licensed wholesale vendor specifies in the application a quantity of

(i) Atlantic manufactured tobacco and black stock manufactured tobacco sold and delivered by the licensed wholesale vendor to licensed retail vendors after February 10, 1994 and before June 1, 1994, or

(ii) Atlantic manufactured tobacco and black stock manufactured tobacco held in the inventory of the licensed wholesale vendor at the beginning of June 1, 1994;

(e) the quantity of Atlantic manufactured tobacco and black stock manufactured tobacco specified in the application by the licensed wholesale vendor has not been specified in any other application made by the licensed wholesale vendor for a reduction or refund in respect of which the licensed tobacco manufacturer or any other licensed tobacco manufacturer is entitled to a deduction under subsection (4);

(f) the total of the quantity of Atlantic manufactured tobacco and black stock manufactured tobacco specified in the application and all other quantities of Atlantic manufactured tobacco and black stock manufactured tobacco specified by the licensed wholesale vendor in applications to the licensed tobacco manufacturer or other licensed tobacco manufacturers for reductions or refunds in respect of which the licensed tobacco manufacturer or other licensed tobacco manufacturers are entitled to deductions under subsection (4) does not exceed the total quantity of Atlantic manufactured tobacco and black stock manufactured tobacco determined under subsection (5) in relation to the licensed wholesale vendor;

(g) the licensed wholesale vendor specifies in the application either February 10, 1994 or April 14, 1994 as the reference date for the purposes of all applications each of which is an application by the licensed wholesale vendor for a reduction or refund in respect of which a licensed tobacco manufacturer may be entitled to a deduction under subsection (4), 68.165(4), 68.167(4) or 68.168(4);

(h) the application is made before January 1995, in any form and manner that is authorized by the Minister;

(i) the application is approved by the Minister of Finance of the Province of New Brunswick; and

(j) in response to the application, the licensed tobacco manufacturer makes a reduction in the amount payable, or a refund of an amount paid, by the licensed wholesale vendor for manufactured tobacco.

Deduction from excise tax payable

(4) Where this subsection applies, there may be deducted, in computing the excise taxes payable under section 23 by the licensed tobacco manufacturer within two years after the reduction or refund referred to in paragraph (3)(j), an amount equal to the lesser of the amount of the reduction or refund and the amount in respect of the specified quantity of Atlantic manufactured tobacco and black stock manufactured tobacco referred to in paragraph (3)(d) that is equal to the total of

(a) $0.01 multiplied by the number of cigarettes in the specified quantity of Atlantic manufactured tobacco and black stock manufactured tobacco,

(b) $0.0049 multiplied by the number of tobacco sticks in the specified quantity of Atlantic manufactured tobacco and black stock manufactured tobacco, and

(c) $0.0012 multiplied by the number of grams of black stock manufactured tobacco in the specified quantity of Atlantic manufactured tobacco and black stock manufactured tobacco.

Limit on specified quantity

(5) For the purposes of paragraph (3)(f), the total quantity of Atlantic manufactured tobacco and black stock manufactured tobacco determined under this subsection in relation to a licensed wholesale vendor is the total of

(a) the number of cigarettes, if any, determined by the formula

A + (B x C) -- F

D

where

A is the number of cigarettes that are Atlantic manufactured tobacco sold and delivered by the licensed wholesale vendor to licensed retail vendors after February 10, 1994 and before June 1, 1994,

B is the number of cigarettes that are Atlantic manufactured tobacco held in the inventory of the licensed wholesale vendor at the beginning of June 1, 1994 other than at a retail outlet of the licensed wholesale vendor,

C is the number of cigarettes that are Atlantic manufactured tobacco sold and delivered by the licensed wholesale vendor to licensed retail vendors in the three-month period ending on the reference date,

D is the number of cigarettes that are Atlantic manufactured tobacco sold and delivered by the licensed wholesale vendor in the three-month period ending on the reference date, and

F is the lesser of

(i) the number of cigarettes determined by the formula

(G x H) + K

J

where

G is the number of cigarettes that are Atlantic manufactured tobacco held in the inventory of the licensed wholesale vendor at the beginning of February 11, 1994 other than at a retail outlet of the licensed wholesale vendor,

H is the number of cigarettes that are Atlantic manufactured tobacco sold and delivered by the licensed wholesale vendor to licensed retail vendors in the three-month period ending on February 10, 1994,

J is the number of cigarettes that are Atlantic manufactured tobacco sold and delivered by the licensed wholesale vendor in the three-month period ending on February 10, 1994, and

K is the number of cigarettes that are Atlantic manufactured tobacco held at the beginning of February 11, 1994 in the inventories of the licensed wholesale vendor at the retail outlets of the licensed wholesale vendor in the Province of New Brunswick, where the licensed wholesale vendor is also a licensed retail vendor, and

(ii) the greater of

(A) 1,000,000 cigarettes, and

(B) the number of cigarettes obtained by multiplying 200,000 cigarettes by the number of separate retail establishments of the licensed wholesale vendor in the Province of New Brunswick on February 11, 1994,

(b) the number of tobacco sticks, if any, determined by the formula

L + (M x N) -- (Q x R) -- T

P S

where

L is the number of tobacco sticks that are Atlantic manufactured tobacco sold and delivered by the licensed wholesale vendor to licensed retail vendors after February 10, 1994 and before June 1, 1994,

M is the number of tobacco sticks that are Atlantic manufactured tobacco in the inventory of the licensed wholesale vendor at the beginning of June 1, 1994 other than at a retail outlet of the licensed wholesale vendor,

N is the number of tobacco sticks that are Atlantic manufactured tobacco sold and delivered by the licensed wholesale vendor to licensed retail vendors in the three-month period ending on the reference date,

P is the number of tobacco sticks that are Atlantic manufactured tobacco sold and delivered by the licensed wholesale vendor in the three-month period ending on the reference date,

Q is the number of tobacco sticks that are Atlantic manufactured tobacco held in the inventory of the licensed wholesale vendor at the beginning of February 11, 1994 other than at a retail outlet of the licensed wholesale vendor,

R is the number of tobacco sticks that are Atlantic manufactured tobacco sold and delivered by the licensed wholesale vendor to licensed retail vendors in the three-month period ending on February 10, 1994,

S is the number of tobacco sticks that are Atlantic manufactured tobacco sold and delivered by the licensed wholesale vendor in the three-month period ending on February 10, 1994, and

T is the number of tobacco sticks that are Atlantic manufactured tobacco held at the beginning of February 11, 1994 in the inventories of the licensed wholesale vendor at the retail outlets of the licensed wholesale vendor in the Province of New Brunswick, where the licensed wholesale vendor is also a licensed retail vendor, and

(c) the number of grams of black stock manufactured tobacco, if any, determined by the formula

U + (V x W) -- (Y x Z) -- B1

X A1

where

U is the number of grams of black stock manufactured tobacco sold and delivered by the licensed wholesale vendor to licensed retail vendors after February 10, 1994 and before June 1, 1994,

V is the number of grams of black stock manufactured tobacco held in the inventory of the licensed wholesale vendor at the beginning of June 1, 1994 other than at a retail outlet of the licensed wholesale vendor,

W is the number of grams of black stock manufactured tobacco sold and delivered by the licensed wholesale vendor to licensed retail vendors in the three-month period ending on the reference date,

X is the number of grams of black stock manufactured tobacco sold and delivered by the licensed wholesale vendor in the three-month period ending on the reference date,

Y is the number of grams of black stock manufactured tobacco held in the inventory of the licensed wholesale vendor at the beginning of February 11, 1994 other than at a retail outlet of the licensed wholesale vendor,

Z is the number of grams of black stock manufactured tobacco sold and delivered by the licensed wholesale vendor to licensed retail vendors in the three-month period ending on February 10, 1994,

A1 is the number of grams of black stock manufactured tobacco sold and delivered by the licensed wholesale vendor in the three-month period ending on February 10, 1994, and

B1 is the number of grams of black stock manufactured tobacco held at the beginning of February 11, 1994 in the inventories of the licensed wholesale vendor at the retail outlets of the licensed wholesale vendor in the Province of New Brunswick, where the licensed wholesale vendor is also a licensed retail vendor.

New wholesale vendor

(6) Where a person has become a licensed wholesale vendor after April 14, 1994 and before June 1, 1994, paragraph (3)(g) does not apply in respect of the licensed wholesale vendor and the references in subsection (5) to "the reference date" shall be read as "May 31, 1994".

Where vendor sells wholesale and retail

(7) For the purposes of this section, where a licensed wholesale vendor is also a licensed retail vendor

(a) the Atlantic manufactured tobacco and black stock manufactured tobacco held at the beginning of February 11, 1994 in the inventory of the licensed wholesale vendor at a retail outlet of the licensed wholesale vendor in the Province of New Brunswick shall be deemed to have been sold and delivered by the licensed wholesale vendor to licensed retail vendors immediately after the beginning of February 11, 1994; and

(b) the Atlantic manufactured tobacco or black stock manufactured tobacco that is delivered by or on behalf of the licensed wholesale vendor to a retail outlet of the licensed wholesale vendor in the Province of New Brunswick shall be deemed to be sold and delivered by the licensed wholesale vendor to a licensed retail vendor at the time it is delivered to that retail outlet.

1994, c. 29, s. 7.

Definitions

68.167 (1) In this section,

"inventory" « stock »

"inventory" of a person at any time means the goods that are owned at that time by the person and are for sale at that time in the ordinary course of the person's business;

"licensed retail vendor" « vendeur au détail titulaire de licence »

"licensed retail vendor" means a retail vendor licensed as such under the Health Tax Act, R.S.P.E.I. 1988, c. H-3;

"licensed wholesale vendor" « vendeur en gros titulaire de licence »

"licensed wholesale vendor" means a wholesale vendor licensed as such under the Health Tax Act, R.S.P.E.I. 1988, c. H-3;

"separate retail establishment" « établissement de détail distinct »

"separate retail establishment" of a person means a retail establishment of the person that is geographically separate from other places of business of the person and at which, in the ordinary course of the person's business, the person regularly sells manufactured tobacco to consumers.

Reference date

(2) The reference date referred to in subsection (5) is the reference date specified as required under paragraph (3)(g).

Application of subsection (4)

(3) Subsection (4) applies where

(a) a licensed wholesale vendor makes an application to a licensed tobacco manufacturer for a reduction in the amount payable, or a refund of an amount paid, by the licensed wholesale vendor for manufactured tobacco that the licensed tobacco manufacturer has sold to the licensed wholesale vendor;

(b) the licensed wholesale vendor determines the licensed wholesale vendor's inventories at the beginning of March 26, 1994 of Atlantic manufactured tobacco and black stock manufactured tobacco;

(c) the licensed wholesale vendor determines the licensed wholesale vendor's inventory at the beginning of June 1, 1994 of black stock manufactured tobacco;

(d) the licensed wholesale vendor specifies in the application a quantity of

(i) Atlantic manufactured tobacco and black stock manufactured tobacco sold and delivered by the licensed wholesale vendor to licensed retail vendors after March 25, 1994 and before June 1, 1994, or

(ii) black stock manufactured tobacco held in the inventory of the licensed wholesale vendor at the beginning of June 1, 1994;

(e) the quantity of Atlantic manufactured tobacco and black stock manufactured tobacco specified in the application by the licensed wholesale vendor has not been specified in any other application made by the licensed wholesale vendor for a reduction or refund in respect of which the licensed tobacco manufacturer or any other licensed tobacco manufacturer is entitled to a deduction under subsection (4);

(f) the total of the quantity of Atlantic manufactured tobacco and black stock manufactured tobacco specified in the application and all other quantities of Atlantic manufactured tobacco and black stock manufactured tobacco specified by the licensed wholesale vendor in applications to the licensed tobacco manufacturer or other licensed tobacco manufacturers for reductions or refunds in respect of which the licensed tobacco manufacturer or other licensed tobacco manufacturers are entitled to deductions under subsection (4) does not exceed the total quantity of Atlantic manufactured tobacco and black stock manufactured tobacco determined under subsection (5) in relation to the licensed wholesale vendor;

(g) the licensed wholesale vendor specifies in the application either February 10, 1994 or April 14, 1994 as the reference date for the purposes of all applications each of which is an application by the licensed wholesale vendor for a reduction or refund in respect of which a licensed tobacco manufacturer may be entitled to a deduction under subsection (4), 68.165(4), 68.166(4) or 68.168(4);

(h) the application is made before January 1995, in any form and manner that is authorized by the Minister;

(i) the application is approved by the Treasurer of the Province of Prince Edward Island; and

(j) in response to the application, the licensed tobacco manufacturer makes a reduction in the amount payable, or a refund of an amount paid, by the licensed wholesale vendor for manufactured tobacco.

Deduction from excise tax payable

(4) Where this subsection applies, there may be deducted, in computing the excise taxes payable under section 23 by the licensed tobacco manufacturer within two years after the reduction or refund referred to in paragraph (3)(j), an amount equal to the lesser of the amount of the reduction or refund and the amount in respect of the specified quantity of Atlantic manufactured tobacco and black stock manufactured tobacco referred to in paragraph (3)(d) that is equal to the total of

(a) $0.02125 multiplied by the number of cigarettes in the specified quantity of Atlantic manufactured tobacco and black stock manufactured tobacco,

(b) $0.009 multiplied by the number of tobacco sticks in the specified quantity of Atlantic manufactured tobacco and black stock manufactured tobacco, and

(c) $0.0019 multiplied by the number of grams of black stock manufactured tobacco in the specified quantity of Atlantic manufactured tobacco and black stock manufactured tobacco.

Limit on specified quantity

(5) For the purposes of paragraph (3)(f), the total quantity of Atlantic manufactured tobacco and black stock manufactured tobacco determined under this subsection in relation to a licensed wholesale vendor is the total of

(a) the number of cigarettes, if any, determined by the formula

A -- B

where

A is the number of cigarettes that are Atlantic manufactured tobacco sold and delivered by the licensed wholesale vendor to licensed retail vendors after March 25, 1994 and before June 1, 1994, and

B is the lesser of

(i) the number of cigarettes determined by the formula

(C x D) + F

E

where

C is the number of cigarettes that are Atlantic manufactured tobacco held in the inventory of the licensed wholesale vendor at the beginning of March 26, 1994 other than at a retail outlet of the licensed wholesale vendor,

D is the number of cigarettes that are Atlantic manufactured tobacco sold and delivered by the licensed wholesale vendor to licensed retail vendors in the three-month period ending on March 25, 1994,

E is the number of cigarettes that are Atlantic manufactured tobacco sold and delivered by the licensed wholesale vendor in the three-month period ending on March 25, 1994, and

F is the number of cigarettes that are Atlantic manufactured tobacco held at the beginning of March 26, 1994 in the inventories of the licensed wholesale vendor at the retail outlets of the licensed wholesale vendor in the Province of Prince Edward Island, where the licensed wholesale vendor is also a licensed retail vendor, and

(ii) the greater of

(A) 1,000,000 cigarettes, and

(B) the number of cigarettes obtained by multiplying 200,000 cigarettes by the number of separate retail establishments of the licensed wholesale vendor in the Province of Prince Edward Island on March 26, 1994,

(b) the number of tobacco sticks, if any, determined by the formula

G -- (H x J) -- L

K

where

G is the number of tobacco sticks that are Atlantic manufactured tobacco sold and delivered by the licensed wholesale vendor to licensed retail vendors after March 25, 1994 and before June 1, 1994,

H is the number of tobacco sticks that are Atlantic manufactured tobacco held in the inventory of the licensed wholesale vendor at the beginning of March 26, 1994 other than at a retail outlet of the licensed wholesale vendor,

J is the number of tobacco sticks that are Atlantic manufactured tobacco sold and delivered by the licensed wholesale vendor to licensed retail vendors in the three-month period ending on March 25, 1994,

K is the number of tobacco sticks that are Atlantic manufactured tobacco sold and delivered by the licensed wholesale vendor in the three-month period ending on March 25, 1994, and

L is the number of tobacco sticks that are Atlantic manufactured tobacco held at the beginning of March 26, 1994 in the inventories of the licensed wholesale vendor at the retail outlets of the licensed wholesale vendor in the Province of Prince Edward Island, where the licensed wholesale vendor is also a licensed retail vendor, and

(c) the number of grams of black stock manufactured tobacco, if any, determined by the formula

M + (N x P) -- (R x S) -- U

Q T

where

M is the number of grams of black stock manufactured tobacco sold and delivered by the licensed wholesale vendor to licensed retail vendors after March 25, 1994 and before June 1, 1994,

N is the number of grams of black stock manufactured tobacco held in the inventory of the licensed wholesale vendor at the beginning of June 1, 1994 other than at a retail outlet of the licensed wholesale vendor,

P is the number of grams of black stock manufactured tobacco sold and delivered by the licensed wholesale vendor to licensed retail vendors in the three-month period ending on the reference date,

Q is the number of grams of black stock manufactured tobacco sold and delivered by the licensed wholesale vendor in the three-month period ending on the reference date,

R is the number of grams of black stock manufactured tobacco held in the inventory of the licensed wholesale vendor at the beginning of March 26, 1994 other than at a retail outlet of the licensed wholesale vendor,

S is the number of grams of black stock manufactured tobacco sold and delivered by the licensed wholesale vendor to licensed retail vendors in the three-month period ending on March 25, 1994,

T is the number of grams of black stock manufactured tobacco sold and delivered by the licensed wholesale vendor in the three-month period ending on March 25, 1994, and

U is the number of grams of black stock manufactured tobacco held at the beginning of March 26, 1994 in the inventories of the licensed wholesale vendor at the retail outlets of the licensed wholesale vendor in the Province of Prince Edward Island, where the licensed wholesale vendor is also a licensed retail vendor.

New wholesale vendor

(6) Where a person has become a licensed wholesale vendor after April 14, 1994 and before June 1, 1994, paragraph (3)(g) does not apply in respect of the licensed wholesale vendor and the references in subsection (5) to "the reference date" shall be read as "May 31, 1994".

Where vendor sells wholesale and retail

(7) For the purposes of this section, where a licensed wholesale vendor is also a licensed retail vendor

(a) the Atlantic manufactured tobacco and black stock manufactured tobacco held at the beginning of March 26, 1994 in the inventory of the licensed wholesale vendor at a retail outlet of the licensed wholesale vendor in the Province of Prince Edward Island shall be deemed to have been sold and delivered by the licensed wholesale vendor to licensed retail vendors immediately after the beginning of March 26, 1994; and

(b) the Atlantic manufactured tobacco or black stock manufactured tobacco that is delivered by or on behalf of the licensed wholesale vendor to a retail outlet of the licensed wholesale vendor in the Province of Prince Edward Island shall be deemed to be sold and delivered by the licensed wholesale vendor to a licensed retail vendor at the time it is delivered to that retail outlet.

1994, c. 29, s. 7.

Definitions

68.168 (1) In this section,

"inventory" « stock »

"inventory" of a person at any time means the goods that are owned at that time by the person and are for sale at that time in the ordinary course of the person's business;

"licensed retail vendor" « vendeur au détail titulaire de licence »

"licensed retail vendor" means a retail vendor licensed as such under the Health Tax Act, R.S.P.E.I. 1988, c. H-3;

"licensed wholesale vendor" « vendeur en gros titulaire de licence »

"licensed wholesale vendor" means a wholesale vendor licensed as such under the Health Tax Act, R.S.P.E.I. 1988, c. H-3;

"separate retail establishment" « établissement de détail distinct »

"separate retail establishment" of a person means a retail establishment of the person that is geographically separate from other places of business of the person and at which, in the ordinary course of the person's business, the person regularly sells manufactured tobacco to consumers.

Reference date

(2) The reference date referred to in subsection (5) is the reference date specified as required under paragraph (3)(g).

Application of subsection (4)

(3) Subsection (4) applies where

(a) a licensed wholesale vendor makes an application for the purposes of this section to a licensed tobacco manufacturer for a reduction in the amount payable, or a refund of an amount paid, by the licensed wholesale vendor for manufactured tobacco that the licensed tobacco manufacturer has sold to the licensed wholesale vendor;

(b) only one such application is made by the licensed wholesale vendor to the licensed tobacco manufacturer;

(c) the licensed wholesale vendor determines the licensed wholesale vendor's inventory at the beginning of June 1, 1994 of cigarettes that are Atlantic manufactured tobacco;

(d) the licensed wholesale vendor specifies in the application a number of cigarettes that are Atlantic manufactured tobacco held in the inventory of the licensed wholesale vendor at the beginning of June 1, 1994;

(e) the number of cigarettes specified in the application by the licensed wholesale vendor has not been specified in any other application made by the licensed wholesale vendor for a reduction or refund in respect of which any other licensed tobacco manufacturer is entitled to a deduction under subsection (4);

(f) the total of the number of cigarettes specified in the application and all other numbers of cigarettes specified by the licensed wholesale vendor in applications to other licensed tobacco manufacturers for reductions or refunds in respect of which the other licensed tobacco manufacturers are entitled to deductions under subsection (4) does not exceed the total number of cigarettes determined under subsection (5) in relation to the licensed wholesale vendor;

(g) the licensed wholesale vendor specifies in the application either February 10, 1994 or April 14, 1994 as the reference date for the purposes of all applications each of which is an application by the licensed wholesale vendor for a reduction or refund in respect of which a licensed tobacco manufacturer may be entitled to a deduction under subsection (4), 68.165(4), 68.166(4) or 68.167(4);

(h) the application is made before January 1995, in any form and manner that is authorized by the Minister;

(i) the application is approved by the Treasurer of the Province of Prince Edward Island; and

(j) in response to the application, the licensed tobacco manufacturer makes a reduction in the amount payable, or a refund of an amount paid, by the licensed wholesale vendor for manufactured tobacco.

Deduction from excise tax payable

(4) Where this subsection applies, there may be deducted, in computing the excise taxes payable under section 23 by the licensed tobacco manufacturer within two years after the reduction or refund referred to in paragraph (3)(j), an amount equal to the lesser of the amount of the reduction or refund and the amount determined by multiplying $0.01 by the number of cigarettes specified by the licensed wholesale vendor as required under paragraph (3)(d).

Limit on specified quantity

(5) For the purposes of paragraph (3)(f), the total number of cigarettes determined under this subsection in relation to a licensed wholesale vendor is

(a) where the number of cigarettes that are Atlantic manufactured tobacco determined by the formula "A - B" in paragraph 68.167(5)(a) in relation to the licensed wholesale vendor is zero or greater than zero, the number of cigarettes determined by the formula

C x D

E

where

C is the number of cigarettes that are Atlantic manufactured tobacco held in the inventory of the licensed wholesale vendor at the beginning of June 1, 1994,

D is the number of cigarettes that are Atlantic manufactured tobacco sold and delivered by the licensed wholesale vendor to licensed retail vendors in the three-month period ending on the reference date, and

E is the number of cigarettes that are Atlantic manufactured tobacco sold and delivered by the licensed wholesale vendor in the three-month period ending on the reference date; and

(b) in any other case, the number of cigarettes, if any, determined by the formula

F + (G x H) -- K

J

where

F is the number of cigarettes that are Atlantic manufactured tobacco sold and delivered by the licensed wholesale vendor to licensed retail vendors after March 25, 1994 and before June 1, 1994,

G is the number of cigarettes that are Atlantic manufactured tobacco held in the inventory of the licensed wholesale vendor at the beginning of June 1, 1994 other than at a retail outlet of the licensed wholesale vendor,

H is the number of cigarettes that are Atlantic manufactured tobacco sold and delivered by the licensed wholesale vendor to licensed retail vendors in the three-month period ending on the reference date,

J is the number of cigarettes that are Atlantic manufactured tobacco sold and delivered by the licensed wholesale vendor in the three-month period ending on the reference date, and

K is the lesser of

(i) the number of cigarettes determined by the formula

(L x M) + P

N

where

L is the number of cigarettes that are Atlantic manufactured tobacco held in the inventory of the licensed wholesale vendor at the beginning of March 26, 1994 other than at a retail outlet of the licensed wholesale vendor,

M is the number of cigarettes that are Atlantic manufactured tobacco sold and delivered by the licensed wholesale vendor to licensed retail vendors in the three-month period ending on March 25, 1994,

N is the number of cigarettes that are Atlantic manufactured tobacco sold and delivered by the licensed wholesale vendor in the three-month period ending on March 25, 1994, and

P is the number of cigarettes that are Atlantic manufactured tobacco held at the beginning of March 26, 1994 in the inventories of the licensed wholesale vendor at the retail outlets of the licensed wholesale vendor in the Province of Prince Edward Island, where the licensed wholesale vendor is also a licensed retail vendor, and

(ii) the greater of

(A) 1,000,000 cigarettes, and

(B) the number of cigarettes obtained by multiplying 200,000 cigarettes by the number of separate retail establishments of the licensed wholesale vendor in the Province of Prince Edward Island on March 26, 1994.

New wholesale vendor

(6) Where a person has become a licensed wholesale vendor after April 14, 1994 and before June 1, 1994, paragraph (3)(g) does not apply in respect of the licensed wholesale vendor and the references in subsection (5) to "the reference date" shall be read as "May 31, 1994".

Where vendor sells wholesale and retail

(7) For the purposes of this section, where a licensed wholesale vendor is also a licensed retail vendor

(a) the cigarettes that are Atlantic manufactured tobacco held at the beginning of March 26, 1994 in the inventory of the licensed wholesale vendor at a retail outlet of the licensed wholesale vendor in the Province of Prince Edward Island shall be deemed to have been sold and delivered by the licensed wholesale vendor to licensed retail vendors immediately after the beginning of March 26, 1994; and

(b) the cigarettes that are Atlantic manufactured tobacco delivered by or on behalf of the licensed wholesale vendor to a retail outlet of the licensed wholesale vendor in the Province of Prince Edward Island shall be deemed to be sold and delivered by the licensed wholesale vendor to a licensed retail vendor at the time they are delivered to that retail outlet.

1994, c. 29, s. 7.

Definitions

68.169 (1) In this section,

"licensed retail vendor" « vendeur au détail titulaire de licence »

"licensed retail vendor" means a retail vendor licensed as such under the Health Tax Act, R.S.P.E.I. 1988, c. H-3;

"licensed wholesale vendor" « vendeur en gros titulaire de licence »

"licensed wholesale vendor" means a wholesale vendor licensed as such under the Health Tax Act, R.S.P.E.I. 1988, c. H-3;

"Nova Scotia cigarettes" « cigarettes de la Nouvelle-Écosse »

"Nova Scotia cigarettes" means cigarettes that are marked or stamped in accordance with Part III of the Revenue Act, S.N.S. 1995-96, c. 17, to indicate that the cigarettes are intended for retail sale in the Province of Nova Scotia;

"Nova Scotia manufactured tobacco" « tabac fabriqué de la Nouvelle-Écosse »

"Nova Scotia manufactured tobacco" means manufactured tobacco that is marked or stamped in accordance with Part III of the Revenue Act, S.N.S. 1995-96, c. 17, to indicate that the manufactured tobacco is intended for retail sale in the Province of Nova Scotia;

"Nova Scotia tobacco sticks" « bâtonnets de tabac de la Nouvelle-Écosse »

"Nova Scotia tobacco sticks" means tobacco sticks that are marked or stamped in accordance with Part III of the Revenue Act, S.N.S. 1995-96, c. 17, to indicate that the tobacco sticks are intended for retail sale in the Province of Nova Scotia.

Rebate to P.E.I. Atlantic manufactured tobacco wholesaler

(2) Where a licensed wholesale vendor has sold, after May 1994 and before April 1995, cigarettes or tobacco sticks that are Atlantic manufactured tobacco to a licensed retail vendor, or to a consumer in the Province of Prince Edward Island for consumption by the consumer or by others at the expense of the consumer, the Minister may pay to the licensed wholesale vendor a tax rebate equal to the total of

(a) $0.01125 multiplied by the number of those cigarettes, and

(b) $0.009 multiplied by the number of those tobacco sticks.

Rebate after March 1995

(2.1) Where a licensed wholesale vendor has sold, after March 1995 and before June 1995, cigarettes or tobacco sticks that are Atlantic manufactured tobacco to a licensed retail vendor, or to a consumer in the Province of Prince Edward Island for consumption by the consumer or by others at the expense of the consumer, the Minister may pay to the licensed wholesale vendor a tax rebate equal to the total of

(a) $0.00625 multiplied by the number of those cigarettes, and

(b) $0.0074 multiplied by the number of those tobacco sticks.

Rebate to P.E.I. black stock wholesaler

(3) Where a licensed wholesale vendor has sold, after August 1994 and before April 1995, cigarettes or tobacco sticks that are black stock to a licensed retail vendor, or to a consumer in the Province of Prince Edward Island for consumption by the consumer or by others at the expense of the consumer, the Minister may pay to the licensed wholesale vendor a tax rebate equal to the total of

(a) $0.01125 multiplied by the number of those cigarettes, and

(b) $0.009 multiplied by the number of those tobacco sticks.

Rebate after March 1995

(3.1) Where a licensed wholesale vendor has sold, after March 1995 and before the first day of the fifth month following the month in which the Act that enacts this subsection is assented to, cigarettes or tobacco sticks that are black stock to a licensed retail vendor, or to a consumer in the Province of Prince Edward Island for consumption by the consumer or by others at the expense of the consumer, the Minister may pay to the licensed wholesale vendor a tax rebate equal to the total of

(a) $0.00625 multiplied by the number of those cigarettes, and

(b) $0.0074 multiplied by the number of those tobacco sticks.

Rebate to P.E.I. wholesaler

(3.2) Where, after November 8, 1995 and before November 29, 1996, a licensed wholesale vendor sells Nova Scotia cigarettes or Nova Scotia tobacco sticks to a licensed retail vendor, or to a consumer in the Province of Prince Edward Island for consumption by the consumer or by others at the expense of the consumer, the Minister may pay to the licensed wholesale vendor a tax rebate equal to the total of

(a) $0.00625 multiplied by the number of those cigarettes, and

(b) $0.0074 multiplied by the number of those tobacco sticks.

Rebate after November 28, 1996

(3.21) Where, after November 28, 1996 and before December 12, 1996, a licensed wholesale vendor sells Nova Scotia manufactured tobacco to a licensed retail vendor, or to a consumer in the Province of Prince Edward Island for consumption by the consumer or by others at the expense of the consumer, the Minister may pay to the licensed wholesale vendor a tax rebate equal to the total of

(a) $0.00975 multiplied by the number of cigarettes, in respect of the portion of that manufactured tobacco that is cigarettes,

(b) $0.0074 multiplied by the number of tobacco sticks, in respect of the portion of that manufactured tobacco that is tobacco sticks, and

(c) $2.70 multiplied by the number of kilograms of that manufactured tobacco that is not cigarettes or tobacco sticks.

Rebate after December 11, 1996 and before February 14, 1998

(3.22) Where, after December 11, 1996 and before February 14, 1998, a licensed wholesale vendor sells Nova Scotia cigarettes or Nova Scotia tobacco sticks to a licensed retail vendor, or to a consumer in the Province of Prince Edward Island for consumption by the consumer or by others at the expense of the consumer, the Minister may pay to the licensed wholesale vendor a tax rebate equal to the total of

(a) $0.00625 multiplied by the number of those cigarettes, and

(b) $0.0047 multiplied by the number of those tobacco sticks.

Rebate after February 13, 1998 and before November 6, 1999

(3.23) If, after February 13, 1998 and before November 6, 1999, a licensed wholesale vendor sells Nova Scotia cigarettes or Nova Scotia tobacco sticks to a licensed retail vendor, or to a consumer in the Province of Prince Edward Island for consumption by the consumer or by others at the expense of the consumer, the Minister may pay to the licensed wholesale vendor a tax rebate equal to the total of

(a) $0.00625 multiplied by the number of those cigarettes, and

(b) $0.004 multiplied by the number of those tobacco sticks.

Rebate after November 5, 1999

(3.24) If, after November 5, 1999, a licensed wholesale vendor sells Nova Scotia cigarettes to a licensed retail vendor, or to a consumer in the Province of Prince Edward Island for consumption by the consumer or by others at the expense of the consumer, the Minister may pay to the licensed wholesale vendor a tax rebate equal to $0.00625 multiplied by the number of those cigarettes.

Conditions for rebate

(4) To qualify to receive a rebate under any of subsections (2) to (3.24) in respect of manufactured tobacco, the licensed wholesale vendor must

(a) apply to the Minister for the rebate, within two years after the sale of the manufactured tobacco by the licensed wholesale vendor, in any form and manner that is authorized by the Minister; and

(b) include in the application a certification by the Treasurer of the Province of Prince Edward Island that all tax payable in respect of the manufactured tobacco under the Health Tax Act, R.S.P.E.I. 1988, c. H-3, has been paid.

Only one application per month

(5) A licensed wholesale vendor shall not apply for a rebate under any of subsections (2) to (3.24) more often than once per month.

1994, c. 29, s. 7; 1995, c. 36, s. 6; 1997, c. 26, s. 68; 1998, c. 21, s. 81; 2000, c. 30, ss. 13, 140.

Payment where use as ships' stores

68.17 (1) Where tax under Part III, IV, V or VI has been paid in respect of any goods and a manufacturer, producer, wholesaler, jobber or other dealer has sold the goods for use as ships' stores, an amount equal to the amount of that tax shall, subject to this Part, be paid to that dealer if that dealer applies therefor within two years after that sale of the goods.

Exception

(2) Subsection (1) does not apply in respect of taxes imposed under Part III in respect of tobacco products mentioned in Schedule II.

R.S., 1985, c. 7 (2nd Supp.), s. 34; 1991, c. 42, s. 2; 1993, c. 25, s. 61.

Payment where goods in inventory

68.18 (1) Where tax under Part III, IV or VI has been paid in respect of any goods and a person holds the goods in an unused condition in inventory on the day a licence is granted to him pursuant to section 54 or 64 and could thereafter have obtained the goods exempt from tax under subsection 23(7) or 50(5), an amount equal to the amount of that tax shall, subject to this Part, be paid to that person if he applies therefor within two years after the licence was granted.

Idem

(2) Where tax under Part III, IV or VI has been paid in respect of any goods and a person holds the goods in an unused condition in inventory on the day a licence is granted to him pursuant to section 55 and could thereafter have obtained the goods exempt from tax under subsection 23(6), (7) or (8) or 50(5), an amount equal to the lesser of the amount of that tax and the amount of tax under Part III, IV or VI that would be payable if the goods were acquired in a taxable transaction by that person on that day shall, subject to this Part, be paid to that person if he applies therefor within two years after the licence was granted.

Exception

(3) No amount equal to the amount of tax under Part III, IV or VI shall be paid pursuant to subsection (2) to a person in respect of any goods that are not subject to tax under that Part on the day a licence is granted to that person pursuant to section 55.

Unused condition

(4) For the purposes of this section, goods are in an unused condition if they are new or have not been used in Canada.

R.S., 1985, c. 7 (2nd Supp.), s. 34.

Payment where use by province

68.19 (1) Where tax under Part III, IV, V or VI has been paid in respect of any goods and Her Majesty in right of a province has purchased or imported the goods for any purpose other than

(a) resale,

(b) use by any board, commission, railway, public utility, university, manufactory, company or agency owned, controlled or operated by the government of the province or under the authority of the legislature or the lieutenant governor in council of the province, or

(c) use by Her Majesty in that right, or by any agents or servants of Her Majesty in that right, in connection with the manufacture or production of goods or use for other commercial or mercantile purposes,

an amount equal to the amount of that tax shall, subject to this Part, be paid either to Her Majesty in that right or to the importer, transferee, manufacturer, producer, wholesaler, jobber or other dealer, as the case may require, if Her Majesty or the dealer applies therefor within two years after Her Majesty purchased or imported the goods.

Exception

(2) No amount shall be paid pursuant to subsection (1) to an importer, transferee, manufacturer, producer, wholesaler, jobber or other dealer who supplies goods to Her Majesty in right of a province in respect of which there is in force at the time the goods are supplied a reciprocal taxation agreement referred to in section 32 of the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act.

R.S., 1985, c. 7 (2nd Supp.), s. 34; 1991, c. 42, s. 3.

Payment where subsequent exempt sale

68.2 (1) Where tax under Part III or VI has been paid in respect of any goods and subsequently the goods are sold to a purchaser in circumstances that, by virtue of the nature of that purchaser or the use to which the goods are to be put or by virtue of both such nature and use, would have rendered the sale to that purchaser exempt or relieved from that tax under subsection 23(6), paragraph 23(8)(b) or subsection 50(5) or 51(1) had the goods been manufactured in Canada and sold to the purchaser by the manufacturer or producer thereof, an amount equal to the amount of that tax shall, subject to this Part, be paid to the person who sold the goods to that purchaser if the person who sold the goods applies therefor within two years after he sold the goods.

Application of anti-avoidance rule

(2) Section 274 applies, with such modifications as the circumstances require, to any transaction

(a) that is a sale of goods that would give rise to the application of, or that is the basis of an application under, subsection (1), and

(b) that takes place after December 17, 1990 and before 1991,

and for that purpose, every reference in that section to "an assessment, a reassessment or an additional assessment" shall be read as a reference to "an assessment, a reassessment, an additional assessment, a determination or a redetermination".

R.S., 1985, c. 7 (2nd Supp.), s. 34; 1993, c. 27, s. 2.

Definitions

68.21 (1) In this section,

"arm's length sale" «vente sans lien de dépendance»

"arm's length sale" means a sale of goods by a licensed manufacturer to a person with whom the manufacturer is dealing at arm's length at the time of the sale;

"fiscal period" « exercice »

"fiscal period" means a fiscal period as determined for the purposes of the Income Tax Act.

Payment where bad debt

(2) Where ad valorem tax under Part III or VI has been paid by a licensed manufacturer in respect of an arm's length sale occurring on or after February 16, 1984 and the manufacturer has established, in accordance with generally accepted accounting practices, that any debt owing to him in respect of the sale has become in whole or in part a bad debt and has accordingly written off the debt as a bad debt in his books of account, an amount equal to the proportion of the amount of that tax that the amount of the debt written off is of the price for which the goods were sold shall, subject to this Part, be paid to that manufacturer if he applies therefor in the two years after the end of his fiscal period during which the debt was so written off.

Recovery of payment

(3) Where a licensed manufacturer recovers all or any part of a debt in respect of which an amount is paid to him pursuant to subsection (2), in this subsection referred to as the "refunded amount", that manufacturer shall forthwith pay to Her Majesty an amount equal to the proportion of the refunded amount that the amount of the debt so recovered is of the amount of the debt written off in respect of which the refunded amount was paid.

R.S., 1985, c. 7 (2nd Supp.), s. 34, c. 12 (4th Supp.), s. 25; 1999, c. 31, ss. 231(F), 248(F).

Payment where warranty

68.22 Where tax under Part III or VI has been paid in respect of any goods that a licensed manufacturer gives away as free replacement parts under a written warranty given in respect of the goods into which the parts are to be incorporated and the amount, if any, charged for the warranty is included in the sale price charged by the licensed manufacturer for the goods into which the parts are to be incorporated or, if those goods are imported goods, in the duty paid value thereof, an amount equal to the amount of that tax shall, subject to this Part, be paid to that manufacturer if he applies therefor within two years after he gave away the goods.

R.S., 1985, c. 7 (2nd Supp.), s. 34.

Definition of "system goods"

68.23 (1) In this section, "system goods" means

(a) goods purchased for use directly in a water distribution, sewerage or drainage system, and

(b) goods used in the construction of a building, or that part of a building, used exclusively to house machinery and apparatus for use directly in a water distribution, sewerage or drainage system,

but does not include chemicals purchased for use or used in the treatment of water or sewage in any such system.

Payment where use in certain systems

(2) Where tax under Part VI has been paid in respect of any system goods and the purchaser of the goods has, within three years after the completion of the system for which the goods were purchased or in which the goods were used, as the case may be, transferred the system without charge to a municipality pursuant to a by-law of or an agreement with that municipality, an amount equal to the amount of that tax shall, subject to this Part, be paid to that purchaser if he applies therefor within two years after that transfer of the system.

Declaration

(3) For the purposes of subsection (2), the Minister may declare any agency operating a water distribution, sewerage or drainage system for or on behalf of a municipality to be a municipality.

R.S., 1985, c. 7 (2nd Supp.), s. 34.

Definitions

68.24 (1) In this section,

"certified institution" «institution titulaire de certificat»

"certified institution" means a non-profit organization or charity that holds a valid and subsisting certificate issued under subsection (2);

"charity" « organisme de bienfaisance »

"charity" has the meaning assigned by subsection 149.1(1) of the Income Tax Act;

"Minister" «ministre»

"Minister" means the Minister of National Health and Welfare;

"non-profit organization" « organisation sans but lucratif »

"non-profit organization" means a club, society or association described in paragraph 149(1)(l) of the Income Tax Act;

"prescribed" Version anglaise seulement

"prescribed" means prescribed by the Minister;

"previously certified institution" «institution déjà titulaire de certificat»

"previously certified institution" means a non-profit organization or charity that holds a valid and subsisting certificate issued under this section, as it read immediately before February 11, 1988;

"specified day" «jour spécifié»

"specified day" means

(a) in relation to a certified institution, the later of

(i) the day specified in the certificate pursuant to subsection (3), and

(ii) the first day of April preceding the day on which the application for the certificate was received by the Minister, and

(b) in relation to a previously certified institution, the later of

(i) the day specified in the certificate pursuant to this section, as it read immediately before February 11, 1988, and

(ii) the first day of April preceding the day on which the application for the certificate was received by the Minister.

Issue of certificate

(2) On application in the prescribed form and manner and containing the prescribed information, the Minister may issue a certificate to the applicant for the purposes of this section, if the Minister is satisfied that the applicant is a non-profit organization or charity

(a) whose principal purpose is to provide care, of such type as the Governor in Council may prescribe by regulation on the recommendation of the Minister and the Minister of Finance,

(i) to children, or to aged, infirm or incapacitated persons, who are in need of care on a continuous or regular basis, and

(ii) on its own premises by means of qualified persons in sufficient numbers in relation to the type of care provided; or

(b) whose only purpose is to provide administrative services solely to one or more non-profit organizations or charities having the principal purpose described in paragraph (a) and holding a certificate under this subsection.

Terms of certificate

(3) A certificate under subsection (2) shall be in the prescribed form and

(a) shall certify that, as of a day specified in the certificate, the non-profit organization or charity to which it is issued meets the conditions referred to in that subsection; and

(b) if the non-profit organization or charity carries on operations at more than one location, shall specify the location for which it is issued.

Revocation of new certificate

(4) Where the Minister believes on reasonable grounds that the holder of a certificate under subsection (2) did not meet the conditions referred to in that subsection at the time it was issued or has since ceased to meet those conditions, the Minister may, by notice sent to the holder, revoke the certificate effective as of any day on or after the day on which the certificate was issued to the holder or the holder ceased to meet those conditions, as the case may be.

Revocation of old certificate

(5) Where the Minister believes on reasonable grounds that the holder of a certificate under this section, as it read immediately before February 11, 1988, does not meet the conditions referred to in subsection (2), the Minister may, by notice sent to the holder, revoke the certificate effective as of any day on or after which the holder did not meet those conditions.

Payment where use by certified or previously certified institutions

(6) Where tax under Part VI has been paid in respect of any goods and a certified institution or previously certified institution has purchased the goods on or after the specified day for the sole use of the institution and not for resale and met the conditions referred to in subsection (2) at the time of the purchase, an amount equal to the amount of that tax shall, subject to this Part, be paid to that institution if it applies therefor within two years after it purchased the goods.

Payment where use by certified or previously certified institutions prior to certification

(7) Where tax under Part VI has been paid in respect of any goods and a non-profit organization or charity to which a certificate was subsequently issued under subsection (2) or this section, as it read immediately before February 11, 1988, or a person acting on behalf of such an organization or charity, has purchased the goods within two years before the specified day for the sole use of the organization or charity and not for resale and the organization or charity was constructing a building for its own use at the time of the purchase, an amount equal to the amount of that tax shall, subject to this Part, be paid to that organization or charity if it applies therefor within two years after the day on which the certificate was issued to the organization or charity.

Exception

(8) Where a certificate under subsection (2) specifies a location for which it is issued or a certificate issued under this section, as it read immediately before February 11, 1988, specifies an address of the holder of the certificate, no amount shall be paid pursuant to subsection (6) or (7) to the certified institution or previously certified institution unless the goods were purchased for the sole use of that institution at that location or address and not for resale.

R.S., 1985, c. 7 (2nd Supp.), s. 34, c. 12 (4th Supp.), ss. 26, 27; 1999, c. 31, ss. 232, 246(F).

Payment where use by hospital cleaning establishments

68.25 Where tax under Part VI has been paid in respect of any goods and the goods have been purchased for the sole purpose of constructing, equipping or operating an establishment

(a) that is wholly owned, directly or indirectly, by or on behalf of one or more bona fide public hospitals each of which has been certified as such by the Department of Health, and

(b) that is established for the sole purpose of providing laundry services, cleaning services or linen supply services to one or more hospitals described in paragraph (a),

an amount equal to the amount of that tax shall, subject to this Part, be paid to that establishment if it applies therefor within two years after the goods were purchased.

R.S., 1985, c. 7 (2nd Supp.), s. 34; 1999, c. 31, s. 85.

Payment where use by educational institutions

68.26 Where tax under Part VI has been paid in respect of any materials and the materials have been purchased by or on behalf of

(a) a school, university or other similar educational institution for use exclusively in the construction of a building for that institution,

(b) any organization for use exclusively in the construction of a building for that organization that is to be used exclusively or mainly as a public library operated by or on behalf of that organization on a non-commercial basis, or

(c) a corporation wholly owned and controlled by Her Majesty in right of a province that is established for the sole purpose of providing residences for students of universities or other similar educational institutions, for use exclusively in the construction of those residences,

an amount equal to the amount of that tax shall, subject to this Part, be paid to that institution, organization or corporation if it applies therefor within two years after the materials were purchased.

R.S., 1985, c. 7 (2nd Supp.), s. 34.

Definition of "incinerator goods"

68.27 (1) In this section, "incinerator goods" means

(a) materials for use exclusively in the construction of, or

(b) machinery or apparatus, including equipment to be installed in a chimney or smoke stack, and repair and replacement parts therefor, for use directly and exclusively in the operation of

an incinerator owned or to be owned by a municipality and used or to be used primarily for the incineration of waste for the municipality, but does not include motor vehicles, attachments therefor or office equipment.

Payment where use in incinerators

(2) Where tax under Part VI has been paid in respect of any incinerator goods and the goods have been purchased by or on behalf of a municipality for the sole use of the municipality and not for resale, an amount equal to the amount of that tax shall, subject to this Part, be paid to that municipality if it applies therefor within two years after that purchase of the goods.

R.S., 1985, c. 7 (2nd Supp.), s. 34.

Definition of "qualified goods"

68.28 (1) In this section, "qualified goods" means the goods mentioned in Part XIII of Schedule III, but does not include

(a) photocopiers or other office type reproduction equipment for use by persons whose principal business is not printing; and

(b) for greater certainty, goods that are expressly excluded or not included in that Part.

Payment where use by small manufacturer

(2) Where tax under Part VI has been paid in respect of any qualified goods and the goods have been purchased or imported by a person of a class prescribed pursuant to subsection (3) for the sole use of that person and not for resale, an amount equal to the amount of that tax shall, subject to this Part, be paid to that person if he applies therefor within two years after that purchase or importation of the goods.

Regulations

(3) The Governor in Council may, on the joint recommendation of the Minister of Finance and the Minister of National Revenue, make regulations prescribing any class of small manufacturer or producer for the purposes of this section.

R.S., 1985, c. 7 (2nd Supp.), s. 34.

Payment where tourist literature printed

68.29 Where tax under Part VI has been paid in respect of any printed matter that has been produced or purchased in Canada by a board of trade, chamber of commerce, municipal or automobile association or other similar organization, or by or on the order of a government, or a department, agency or representative of a government, and that is made available to the general public without charge for the promotion of tourism, an amount equal to the amount of that tax shall, subject to this Part, be paid to the organization, or to the government, department, agency or representative, if it applies therefor within two years after the printed matter was so produced or purchased.

R.S., 1985, c. 7 (2nd Supp.), s. 34, c. 42 (2nd Supp.), s. 7.

Payment where motor fuel purchased by diplomats

68.3 (1) Where taxes under Parts III and VI have been paid in respect of gasoline or diesel fuel purchased by a diplomat for his personal or official use, an amount equal to the amount of the taxes shall, subject to this Part, be paid to the diplomat if the diplomat applies therefor within two years after the purchase of the gasoline or diesel fuel.

Designation order

(2) The Governor in Council, on the recommendation of the Minister of Foreign Affairs certifying that Canadian diplomats posted in a foreign country are granted relief from tax on gasoline or diesel fuel, may, by order, designate the foreign country for the purposes of this section.

Definition of "diplomat"

(3) In this section, "diplomat" means a person referred to in section 2 of Part II of Schedule III who represents a country designated by an order made under subsection (2).

R.S., 1985, c. 42 (2nd Supp.), s. 8; 1995, c. 5, s. 25.

Definitions

68.4 (1) In this section,

"air carrier" « transporteur aérien »

"air carrier" in a calendar year, means a person who is a carrier in the year and whose gross revenue for the year is derived primarily from the business of providing eligible air transportation services;

"aviation fuel" « carburant aviation »

"aviation fuel" does not include aviation gasoline;

"aviation rebate limit" « plafond de la remise aux transporteurs aériens »

"aviation rebate limit" of a particular air carrier for a calendar year, means

(a) where at every time in the year no other air carrier is related to the particular air carrier, $20,000,000, and

(b) in any other case, the amount that the particular air carrier and all other persons (in this paragraph referred to as "related air carriers") each of which is an air carrier in the year and is related to the particular air carrier at any time in the year allocate, in an agreement in prescribed form filed with the Minister with the application described in paragraph (3.1)(b), to the particular air carrier for the year, provided that

(i) if the total of the amounts so allocated for the year to the particular air carrier and all related air carriers is greater than $20,000,000, each amount so allocated is deemed to be nil, and

(ii) if the particular air carrier and all related air carriers fail to file an agreement under this paragraph for the year, the Minister may allocate an amount to one or more of them for the year, which amount or the total of which amounts shall not exceed $20,000,000, and any amount so allocated by the Minister is deemed to have been so allocated by the particular air carrier and all related air carriers in such an agreement;

"carrier" « transporteur »

"carrier" in a calendar year means a person whose gross revenue for the year is derived primarily from the business of providing eligible transportation services and who is not exempt for any period in the year from taxation under Part I of the Income Tax Act by reason of section 149 of that Act;

"eligible air transportation services" « service de transport aérien admissible »

"eligible air transportation services" means the carriage by aircraft of passengers or goods or both;

"eligible transportation services" « service de transport admissible »

"eligible transportation services" means the carriage of passengers or goods or both, by aircraft, boat, bus, truck or train, or a combination thereof;

"fuel" « combustible »

"fuel" means diesel fuel and aviation fuel in respect of which the tax under Part III has been paid and cannot be recovered under any other section of this Act;

"fuel tax rebate" « remise de taxe sur le combustible »

"fuel tax rebate" means an amount payable under subsection (2), (3) or (3.1);

"gross revenue" « revenu brut »

"gross revenue" for a calendar year of a person means

(a) where the person is a taxpayer within the meaning of the Income Tax Act, the gross revenue of the person under that Act for all taxation years of the person ending in the year, and

(b) in any other case, the amount that, for the purposes of that Act, would be the gross revenue of the person for all taxation years of the person ending in the year if the person were a corporation;

"ineligible use" « fin inadmissible »

"ineligible use" means any use other than the provision of eligible transportation services for commercial purposes or, where a rebate is paid under subsection (3.1), any use other than the provision of eligible air transportation services for commercial purposes, and for greater certainty the sale of fuel is an ineligible use;

"taxation year" « année d'imposition »

"taxation year" of a person means

(a) where the person is a taxpayer within the meaning of the Income Tax Act, the taxation year of the person for the purposes of that Act, and

(b) in any other case, the period that would be the taxation year of the person for the purposes of that Act if the person were a corporation;

"trucker" « camionneur »

"trucker" in a calendar year means a person whose gross revenue for the year is derived primarily from the business of providing carriage of goods by truck and who is not exempt for any period in the year from taxation under Part I of the Income Tax Act by reason of section 149 of that Act.

Deemed not related

(1.1) For the purposes of this section, a corporation that is a Canadian-controlled private corporation within the meaning of subsection 125(7) of the Income Tax Act and another corporation to which it would otherwise be related at any time are deemed not to be related to each other at that time where the corporations are not associated with each other at that time within the meaning of subsection 127(1).

Fuel tax rebate for carriers

(2) Where a person who is a carrier in a calendar year

(a) has, in the year, purchased in Canada or imported fuel for use by the carrier solely in the provision of eligible transportation services,

(b) applies before July 1993 to the Minister in prescribed form containing prescribed information for a fuel tax rebate in respect of that fuel, and

(c) has not applied under subsection (3) for a fuel tax rebate in respect of any fuel purchased or imported in the year,

a fuel tax rebate equal to three cents for each litre of the fuel shall, subject to this Part, be paid to the carrier.

Alternative rebate for truckers

(3) Where a person who is a trucker in a calendar year

(a) has, in the year, purchased in Canada or imported fuel for use by the trucker solely in the provision of eligible transportation services,

(b) applies before July 1993 to the Minister in prescribed form containing prescribed information for a fuel tax rebate in respect of that fuel, and

(c) has not applied under subsection (2) for a fuel tax rebate in respect of any fuel purchased or imported in the year,

a fuel tax rebate equal to the lesser of an amount equal to one and one-half cents for each litre of the fuel and $500 shall be paid to the trucker.

Aviation rebate

(3.1) Where a person who is an air carrier in a calendar year

(a) has, in the year, purchased in Canada or imported aviation fuel for use by the person solely in the provision of eligible air transportation services, and

(b) applies to the Minister, before the end of the sixth month following the end of the year in prescribed form for a fuel tax rebate in respect of that fuel,

the Minister shall, subject to this Part, pay a fuel tax rebate to the person equal to the lesser of four cents for each litre of that fuel and the person's aviation rebate limit for the year.

Limitation on rebates

(4) No fuel tax rebate shall be paid under this section

(a) in respect of fuel used or to be used for an ineligible use;

(b) where subsection (2) or (3) applies, in respect of fuel that is purchased or imported by the carrier or trucker, as the case may be, before 1991 or after 1992;

(c) where subsection (3.1) applies, in respect of fuel that is purchased or imported by the air carrier before 1996 or after 1999; or

(d) to a person who is or has been bankrupt or to the trustee in bankruptcy of the person in respect of any fuel purchased or imported by the person or the trustee before the person is discharged from the bankruptcy.

Idem

(5) Not more than one application for a fuel tax rebate in respect of fuel purchased or imported in a calendar year may be made by any person.

Diverting fuel to ineligible uses

(6) Where a fuel tax rebate is paid to a person under this section in respect of fuel and the person uses the fuel for an ineligible use, the amount of the rebate paid is deemed to be a tax payable under Part III by the person at the time the fuel is so used.

Repayment of rebate

(7) Subject to subsections (8) and (9), a person to whom a fuel tax rebate was paid under subsection (2) or (3.1) may repay to the Receiver General all or part of the rebate.

Time for repayment

(8) A repayment made under subsection (7) in respect of a fuel tax rebate paid to a person in a taxation year of the person shall be made within the 90 day period that begins on any day on which the Minister sends to the person a notice of assessment of tax payable under Part I of the Income Tax Act by the person for the year, a notice of determination under subsection 152(1.1) of that Act in respect of the person for the year or a notification that no tax is payable under that Part by the person for the year.

Application of subsections 79(1) to (1.2)

(9) Where a person repays under subsection (7) all or a part of a fuel tax rebate, subsections 79(1) to (1.2) apply, with such modifications as the circumstances require, as if

(a) the repayment were a payment of tax payable under Part III;

(b) the person had defaulted in paying the tax within the time prescribed by subsection 78(4);

(c) subsection 78(4) had required the tax to be paid on or before

(i) in the case of a rebate under subsection (3.1), the later of January 1, 2000 and the last day of the month in which the person received the rebate, and

(ii) in any other case, the last day of the month in which the person received the rebate; and

(d) the reference in paragraph 79(1)(a) to "a penalty of one-half of one per cent and interest at the prescribed rate" were read as a reference to "a penalty equal to the prescribed rate of interest".

1992, c. 29, s. 1; 1997, c. 26, s. 81.

Definitions

69. (1) In this section,

"in bulk" «en vrac»

"in bulk", in respect of a sale of gasoline or diesel fuel, means

(a) in a quantity of five hundred litres or more, where the gasoline or diesel fuel is delivered to the purchaser at a retail outlet of the vendor, and

(b) in any quantity, in any other case;

"logging" «opérations forestières»

"logging" means the felling, limbing, bucking and marking of trees, construction of logging roads, off-highway transportation of logs to a mill-pond or mill yard, log salvaging and reforestation, but does not include any production activity on logs after transportation to a mill-pond or mill yard;

"mineral resource" «ressource minérale»

"mineral resource" means

(a) a base or precious metal deposit,

(b) a coal deposit, or

(c) a mineral deposit in respect of which

(i) the Minister of Natural Resources has certified that the principal mineral extracted is an industrial mineral contained in a non-bedded deposit,

(ii) the principal mineral extracted is sylvite, halite or gypsum, or

(iii) the principal mineral extracted is silica that is extracted from sandstone or quartzite;

"mining" «opérations minières»

"mining" means the extracting of minerals from a mineral resource, the processing of ore, other than iron ore, from a mineral resource to the prime metal stage or its equivalent, the processing of iron ore from a mineral resource to the pellet stage or its equivalent and the restoration of strip-mined land to a usable condition, but does not include activities related to the exploration for or development of a mineral resource;

"qualified" «admissible»

"qualified", in respect of a farmer, fisherman, hunter, trapper or other person, means a farmer, fisherman, hunter, trapper or person who holds a sales tax bulk permit issued under regulations made pursuant to subsection (10);

"registered vendor" «vendeur enregistré»

"registered vendor" means a person who is registered under regulations made pursuant to subsection (10).

Fuel tax rebate to vendor

(2) Where gasoline or diesel fuel has been sold by a licensed manufacturer or licensed wholesaler to

(a) [Repealed, R.S., 1985, c. 42 (2nd Supp.), s. 9]

(b) a qualified fisherman for commercial fishing,

(c) a qualified hunter for commercial hunting,

(d) a qualified trapper for commercial trapping,

(e) a qualified person for use in logging, or

(f) a qualified person for use in mining,

for the sole use of the purchaser and not for resale and the taxes imposed by Parts III and VI are payable in respect of the sale, the manufacturer or wholesaler may, in such circumstances and on such terms and conditions as the Minister may prescribe, deduct, within two years after the sale, a fuel tax rebate in an amount calculated in accordance with subsections (8) and (8.01) from the amount of any payment of any tax, penalty, interest or other sum that the manufacturer or wholesaler is liable or is about to become liable to make under those Parts or under this Part in respect of taxes under those Parts.

Fuel tax rebate to vendor selling to farmer

(2.1) Where gasoline or diesel fuel has been sold by a licensed manufacturer or licensed wholesaler to a qualified farmer for farming purposes, for the sole use of the qualified farmer and not for resale and the tax imposed by Parts III and VI is payable in respect of the sale, the manufacturer or wholesaler may, in such circumstances and on such terms and conditions as the Minister may prescribe, deduct, within two years after the sale, a fuel tax rebate in an amount calculated in accordance with subsections (8.1) and (8.2) from the amount of any payment of any tax, penalty, interest or other sum that the manufacturer or wholesaler is liable or is about to become liable to make under those Parts or under this Part in respect of tax under those Parts.

Condition

(3) No deduction shall be made by a licensed manufacturer or licensed wholesaler under subsection (2) or (2.1) unless the manufacturer or wholesaler has reduced the amount charged for the gasoline or diesel fuel to the purchaser by an amount equal to the amount of the deduction and the amount of the reduction is shown separately on an invoice for the sale given to the purchaser by the manufacturer or wholesaler.

Fuel tax rebate to registered vendor

(4) Where gasoline or diesel fuel has been sold in bulk by a registered vendor to

(a) [Repealed, R.S., 1985, c. 42 (2nd Supp.), s. 9]

(b) a qualified fisherman for commercial fishing,

(c) a qualified hunter for commercial hunting,

(d) a qualified trapper for commercial trapping,

(e) a qualified person for use in logging, or

(f) a qualified person for use in mining,

for the sole use of the purchaser and not for resale and the taxes imposed by Parts III and VI have been paid or are payable in respect of the gasoline or fuel, a fuel tax rebate in an amount calculated in accordance with subsections (8) and (8.01) shall, subject to this Part, be paid to that registered vendor if he applies therefor within two years after he sold the gasoline or fuel.

Fuel tax rebate to registered vendor selling to farmer

(4.1) Where gasoline or diesel fuel has been sold in bulk by a registered vendor to a qualified farmer for farming purposes, for the sole use of the qualified farmer and not for resale and the tax imposed by Parts III and VI has been paid or is payable in respect of the gasoline or fuel, a fuel tax rebate in an amount calculated in accordance with subsections (8.1) and (8.2) shall, subject to this Part, be paid to that registered vendor if he applies therefor within two years after the sale of the gasoline or fuel.

Condition

(5) No fuel tax rebate shall be paid to a registered vendor under subsection (4) or (4.1) unless the registered vendor has reduced the amount charged for the gasoline or diesel fuel to the purchaser by an amount equal to the amount of the fuel tax rebate applied for and the amount of the reduction is shown separately on an invoice for the sale given to the purchaser by the registered vendor.

Fuel tax rebate to purchaser or importer

(6) Where gasoline or diesel fuel has been sold to or imported by

(a) [Repealed, R.S., 1985, c. 42 (2nd Supp.), s. 9]

(b) a fisherman for commercial fishing,

(c) a hunter for commercial hunting,

(d) a trapper for commercial trapping,

(e) a person for use in logging, or

(f) a person for use in mining,

for the sole use of the purchaser or importer and not for resale and the taxes imposed by Parts III and VI have been paid or are payable in respect of the gasoline or fuel and, in the case of a sale, the amount charged therefor has not been reduced in accordance with subsection (3) or (5), a fuel tax rebate in an amount calculated in accordance with subsections (8) and (8.01) shall, subject to this Part, be paid to that purchaser or importer if he applies therefor within two years after he purchased or imported the gasoline or fuel.

Fuel tax rebate to farmer

(6.1) Where gasoline or diesel fuel has been sold to or imported by a farmer for farming purposes, for the sole use of the farmer for farming purposes and not for resale and the tax imposed by Parts III and VI has been paid or is payable in respect of the gasoline or fuel and, in the case of a sale, the amount charged therefor has not been reduced in accordance with subsection (3) or (5), a fuel tax rebate in an amount calculated in accordance with subsections (8.1) and (8.2) shall, subject to this Part, be paid to that farmer if he applies therefor within two years after the purchase or importation of the gasoline or fuel.

Limitation

(7) Subsections (2), (2.1), (4), (4.1), (6) and (6.1) do not apply in respect of gasoline or diesel fuel

(a) that is to be used to propel a vehicle on a public highway;

(b) that is to be used other than for a commercial purpose; or

(c) that is sold or imported

(i) on or after January 1, 1990, in respect of the tax imposed by Part III, or

(ii) on or after January 1, 1991, in respect of the tax imposed by Part VI.

Amount of fuel tax rebate: Part VI

(8) For the purposes of subsections (2), (4) and (6), the amount of the fuel tax rebate in respect of the tax imposed by Part VI shall be calculated at such rate, not exceeding five cents, per litre of gasoline or diesel fuel sold or imported as the Governor in Council may, on the recommendation of the Minister of Finance, prescribe by order or, if no rate is so prescribed, at the rate of three cents per litre of gasoline or diesel fuel sold or imported.

Amount of fuel tax rebate: Part III

(8.01) For the purposes of subsections (2), (4) and (6), the amount of the fuel tax rebate in respect of the tax imposed by Part III shall be calculated

(a) in the case of gasoline, at the rate of

(i) one cent per litre, where the gasoline was sold or imported on or after January 1, 1988 and before April 1, 1988, and

(ii) two cents per litre, where the gasoline was sold or imported on or after April 1, 1988 and before January 1, 1990; and

(b) in the case of diesel fuel, at the rate of one cent per litre, where the diesel fuel was sold or imported on or after January 1, 1988 and before January 1, 1990.

Farmers' rate: Part VI

(8.1) For the purposes of subsections (2.1), (4.1) and (6.1), the amount of the fuel tax rebate in respect of the tax imposed by Part VI shall be calculated at such rate, not exceeding five cents, per litre of gasoline or diesel fuel sold or imported as the Governor in Council may, on the recommendation of the Minister of Finance, prescribe by order or, if no rate is so prescribed, at the rate of three and one-half cents per litre of gasoline or diesel fuel sold or imported.

Farmers' rate: Part III

(8.2) For the purposes of subsections (2.1), (4.1) and (6.1), the amount of the fuel tax rebate in respect of the tax imposed by Part III shall be calculated

(a) in the case of gasoline, at the rate of

(i) three cents per litre, where the gasoline was sold or imported on or after January 1, 1987 and before January 1, 1988,

(ii) four cents per litre, where the gasoline was sold or imported on or after January 1, 1988 and before April 1, 1988, and

(iii) five cents per litre, where the gasoline was sold or imported on or after April 1, 1988 and before January 1, 1990; and

(b) in the case of diesel fuel, at the rate of

(i) three cents per litre, where the diesel fuel was sold or imported on or after January 1, 1987 and before January 1, 1988, and

(ii) four cents per litre, where the diesel fuel was sold or imported on or after January 1, 1988 and before January 1, 1990.

Diversion

(9) Where the amount charged for gasoline or diesel fuel to a purchaser is reduced in accordance with subsection (3) or (5) or a payment is made under subsection (6) or (6.1) to a purchaser or importer of gasoline or diesel fuel and that person sells the gasoline or fuel or uses it for a purpose for which the reduction or payment could not, at the time of the purchase or importation, have been made, the amount of the reduction or payment shall be deemed to be a tax under this Act payable by that person,

(a) where that person sells the gasoline or fuel, at the time of delivery thereof to the purchaser from him; and

(b) where that person uses the gasoline or fuel, at the time of the use.

Regulations

(10) The Governor in Council may make regulations

(a) authorizing the issue of sales tax bulk permits to farmers, fishermen, hunters, trappers or other persons who use gasoline or diesel fuel for a purpose described in subsection (2) or (2.1) and prescribing the terms and conditions of the permits;

(b) prescribing the records to be maintained and returns to be filed by farmers, fishermen, hunters, trappers or other persons holding sales tax bulk permits;

(c) prescribing the times at which returns referred to in paragraph (b) are to be filed;

(d) authorizing the cancellation of any sales tax bulk permit where any term or condition of that permit is not complied with or where any provision of this Act or the regulations applicable to the person holding the permit is not complied with; and

(e) providing for a system of registration by the Minister of persons who regularly sell in bulk gasoline or diesel fuel to qualified farmers, qualified fishermen, qualified hunters, qualified trappers or qualified persons engaged in logging or mining, including, without limiting the generality of the foregoing,

(i) the form and manner of applying for, and the procedure for granting, registration,

(ii) the terms and conditions on which registration may be granted, and

(iii) the authorization of the Minister to cancel any registration where any term or condition of the registration is not complied with or where any provision of this Act or the regulations applicable to the registered vendor is not complied with.

R.S., 1985, c. E-15, s. 69; R.S., 1985, c. 7 (2nd Supp.), ss. 24, 34, c. 42 (2nd Supp.), s. 9, c. 42 (3rd Supp.), s. 1, c. 12 (4th Supp.), s. 28; 1989, c. 22, s. 4; 1994, c. 41, s. 37.

Drawback on certain goods

70. (1) Subject to subsection (5), on application, the Minister may, under regulations of the Governor in Council, grant a drawback of the taxes imposed by Part III, IV, V or VI and paid on or in respect of

(a) goods exported from Canada;

(b) goods supplied as ships' stores;

(c) goods used for the equipment, repair or reconstruction of ships or aircraft; or

(d) goods delivered to telegraph cable ships proceeding on an ocean voyage for use in laying or repairing oceanic telegraph cables outside Canadian waters.

Specific sum

(2) The Minister may, under regulations of the Governor in Council, pay a specific sum in lieu of a drawback under subsection (1) in any case where a specific sum in lieu of a drawback of duties is granted under section 102.1 of the Customs Tariff.

Drawback on imported goods

(2.1) On application, the Minister may, under section 100 of the Customs Tariff, grant a drawback of the taxes imposed by Parts III, IV and VI and paid on or in respect of goods imported into Canada.

Application for drawback

(3) An application for a drawback under this section shall be made in the prescribed form and contain the prescribed information and shall be filed with the Minister within such time and in such manner as the Governor in Council may, by regulation, prescribe.

Evidence

(4) No drawback shall be granted under this section unless the person applying therefor provides such evidence in support of the application as the Minister may require.

Exception to drawback

(5) No drawback of the taxes imposed under Part III shall be granted under this section in respect of tobacco products mentioned in Schedule II.

R.S., 1985, c. E-15, s. 70; R.S., 1985, c. 7 (2nd Supp.), ss. 25, 34, 75; 1991, c. 42, s. 4; 1993, c. 25, s. 62; 1995, c. 41, s. 114; 1996, c. 31, s. 81.

Definitions

70.1 (1) In this section,

"adjustment" « redressement »

"adjustment" to the sale price of goods means the giving of a discount, allowance, rebate or other amount as a reduction in the sale price;

"other enactment" « autre texte »

"other enactment" means

(a) a provision of an Act of Parliament, other than this Act, enacted before 1991, or

(b) a provision of a regulation or order enacted under an Act of Parliament before 1991;

"refund" « remboursement »

"refund" of tax means

(a) a refund of that tax, or other payment calculated with reference to that tax, provided for under any of sections 68, 68.1, 68.17, 68.19, 68.2 or 68.23 to 68.3,

(b) a drawback of that tax, or payment in lieu of a drawback of that tax, provided for under section 70, or

(c) a refund, rebate, drawback or remission of that tax, or other payment in respect of or calculated with reference to that tax, provided for under any other enactment;

"registrant" « inscrit »

"registrant" has the meaning assigned by subsection 123(1);

"tax" « taxe »

"tax" means tax imposed under Part VI.

Adjustments after 1990

(2) A refund of tax shall not be paid to a person (in this subsection referred to as the "vendor") in respect of an adjustment made after 1990 to the sale price of goods sold by the vendor to a purchaser unless

(a) the vendor sold the goods to the purchaser under an agreement in writing, paid tax in respect of the sale of the goods, calculated on the sale price, and granted the adjustment within two years after the day on or before which the vendor was required to pay the tax under section 78; and

(b) the adjustment is provided for in the agreement and the making of the adjustment is not dependent on the performance of any service or other act by the purchaser.

Exports after 1990

(3) A refund of tax provided for under section 68.1 or 70 or any other enactment in respect of goods exported from Canada shall not be paid to a person in respect of goods exported by the person after 1990 unless

(a) the person had possession of the goods in Canada at the end of 1990 and was not a registrant on January 1, 1991; or

(b) the person imported the goods, had possession of the goods in Canada at the end of 1990 and was not entitled to be paid a rebate in respect of the goods under section 120, and the goods suffered damage or deterioration at any time before the goods were released, were of inferior quality to those in respect of which the person paid tax, were defective or were not the goods ordered by the person.

Goods sold after 1990

(4) A refund of tax provided for under section 68.17, 68.2 or 70 or any other enactment in respect of goods sold or otherwise supplied or transferred by a person to a purchaser or other transferee shall not be paid to the person unless the person transferred ownership or possession of the goods to the purchaser or other transferee of the goods before 1991.

Goods for use by a province

(5) A refund of tax shall not be paid under section 68.19 in respect of goods supplied, transferred or delivered to, or purchased by, Her Majesty in right of a province unless

(a) Her Majesty in that right acquired ownership or possession of the goods before 1991; or

(b) the goods were supplied or transferred to Her Majesty in that right by a person in the course of performing services under an agreement in writing with Her Majesty in that right and the person had possession of the goods in Canada at the end of 1990 and was not entitled to be paid a rebate in respect of the goods under section 120.

System goods acquired after 1990

(6) A refund of tax shall not be paid under section 68.23 to a person in respect of system goods unless the person acquired ownership or possession of the goods before 1991 and was not entitled to be paid a rebate in respect of the goods under section 120.

Goods acquired by certain organizations after 1990

(7) A refund of tax shall not be paid under any of sections 68.24 to 68.27 to a person (in this subsection referred to as the "organization") unless

(a) in the case of goods purchased by the organization, the organization acquired ownership or possession of the goods before 1991; or

(b) in the case of goods acquired or used by another person for a purpose for which a refund of tax to the organization is provided for under that section, the other person acquired ownership or possession of the goods before 1991 and was not entitled to be paid a rebate in respect of the goods under section 120.

Other goods acquired after 1990

(8) A refund of tax in respect of goods purchased or otherwise acquired by a person shall not be paid under any of sections 68.28 to 68.3 or 70 or any other enactment to the person unless the person acquired ownership or possession of the goods before 1991.

1993, c. 27, s. 3.

Statutory recovery rights only

71. Except as provided in this or any other Act of Parliament, no person has a right of action against Her Majesty for the recovery of any moneys paid to Her Majesty that are taken into account by Her Majesty as taxes, penalties, interest or other sums under this Act.

R.S., 1985, c. E-15, s. 71; R.S., 1985, c. 7 (2nd Supp.), ss. 26, 34.

Definition of "application"

72. (1) In this section, "application" means an application under any of sections 68 to 69.

Form and contents of application

(2) An application, other than an application under any of sections 68.161 to 68.169, shall be made in the prescribed form and contain the prescribed information.

Filing of application

(3) An application, other than an application under any of sections 68.161 to 68.169, shall be filed with the Minister in any manner that the Governor in Council may, by regulation, prescribe.

Determination

(4) On receipt of an application, the Minister shall, with all due dispatch, consider the application and determine the amount, if any, payable to the applicant.

Minister not bound

(5) In considering an application, the Minister is not bound by any application or information supplied by or on behalf of any person.

Notice and payment

(6) After considering an application, the Minister shall

(a) send to the applicant a notice of determination in the prescribed form setting out

(i) the date of the determination,

(ii) the amount, if any, payable to the applicant,

(iii) a brief explanation of the determination, where the Minister rejects the application in whole or in part, and

(iv) the period within which an objection to the determination may be made under section 81.17; and

(b) pay to the applicant the amount, if any, payable to him.

Interest on payment

(7) Where an amount is paid to an applicant under subsection (6), interest at the prescribed rate shall be paid

(a) in the case of an application made under section 68.162, 68.163 or 68.164, in respect of each day between the day on which the application was received by the Minister and the day on which the payment is sent, and compounded monthly on the total amount of the payment and interest outstanding; and

(b) in any other case, in respect of each day between the day that is sixty days after the day on which the application was received by the Minister and the day on which the payment is sent, and compounded monthly on the total amount of the payment and interest outstanding.

Minimum interest

(8) No interest of less than one dollar is payable pursuant to subsection (7).

Determination valid and binding

(9) A determination under subsection (4), including a determination varied under section 81.17, subject to being varied or vacated on an objection or appeal under this Part and subject to an assessment, shall be deemed to be valid and binding notwithstanding any irregularity, informality, error, defect or omission therein or in any proceeding under this Act relating thereto.

Irregularities

(10) No determination under subsection (4) shall be varied or vacated on an appeal by reason only of an irregularity, informality, error, defect or omission by any person in the observance of any directory provision of this Act.

R.S., 1985, c. E-15, s. 72; R.S., 1985, c. 7 (2nd Supp.), ss. 27, 34; 1994, c. 29, s. 8.

Deductions of tax, other than Part I tax, where no application

73. (1) Any person authorized pursuant to subsection (4) who files a return under section 20, 21.32 or 78 and to whom an amount would be payable under any of sections 68 to 68.153 or 68.17 to 69 if that person duly applied therefor on the day on which he files the return, in lieu of applying for that amount, may in that return report that amount and deduct it or any part thereof from the amount of any payment or remittance of tax, penalty, interest or other sum that is reported in that return.

Deductions of Part I tax

(2) Any person who makes a return under subsection 5(1) and to whom an amount would be payable under section 68 if the person duly applied therefor on the day on which that return is made, in lieu of applying for that amount, may in that return report that amount and deduct it or any part thereof from the amount of any payment of tax, penalty, interest or other sum that is reported in that return.

Subsequent deductions

(3) Where a person reports an amount in accordance with subsection (1) or (2) and does not deduct the whole amount in the return in which it is reported, the person may, in any subsequent return, report the amount not previously deducted under this section and deduct it or any part thereof from the amount of any payment or remittance of tax, penalty, interest or other sum that is reported in that subsequent return.

Authorizations and terms

(4) The Minister may, in writing,

(a) authorize a specified person, a person of a specified class of persons or persons generally to make deductions under subsections (1) and (3) either generally or with respect to any transaction of a specified class of transactions;

(b) amend an authorization made pursuant to paragraph (a) or suspend or revoke any such authorization either generally or with respect to a specified person or a person of a specified class of persons; and

(c) specify the terms and conditions on which, and the manner in which, deductions may be made under subsection (1), (2) or (3).

Presumption

(5) Where a person deducts an amount under this section,

(a) the person is deemed to have paid, on the day he filed or made the return in which the amount was deducted, an amount equal to that amount on account of his tax, penalty, interest or other sum payable under this Act in respect of the period for which the return was filed or made; and

(b) the Minister is deemed to have paid, on that day, an amount equal to that amount to that person in accordance with section 72.

R.S., 1985, c. E-15, s. 73; R.S., 1985, c. 7 (2nd Supp.), ss. 28, 34, c. 12 (4th Supp.), s. 29.

73.1 [Repealed, R.S., 1985, c. 7 (2nd Supp.), s. 34]

Deductions of tax, other than Part I tax, where application

74. (1) In lieu of making a payment, other than a payment in respect of Part I, pursuant to an application under any of sections 68 to 68.153, 68.161 or 68.17 to 69, the Minister may, on request of the applicant, authorize the applicant to deduct, on such terms and conditions and in such manner as the Minister may specify, the amount that would otherwise be paid to the applicant from the amount of any payment or remittance of tax, penalty, interest or other sum that is reported in a return under section 20, 21.32 or 78 by the applicant.

Notification of applicant

(2) Where the Minister authorizes an applicant to make a deduction under subsection (1), the Minister shall notify the applicant to that effect in the notice of determination sent to the applicant.

Interest on deduction

(3) Where a deduction is authorized under subsection (1), interest at the prescribed rate shall be authorized as a deduction in accordance with that subsection, calculated in respect of each day between the day that is sixty days after the day on which the application for the payment in respect of which the deduction was authorized was received by the Minister and the day on which the notice of determination was sent, and compounded monthly on the total amount of the deduction and interest outstanding.

Minimum interest

(4) No interest of less than one dollar shall be authorized as a deduction under subsection (3).

Presumption

(5) Where an applicant deducts an amount under this section,

(a) the applicant is deemed to have paid, on the day he filed the return in which the amount was deducted, an amount equal to that amount on account of his tax, penalty, interest or other sum payable under this Act in respect of the period for which the return was filed; and

(b) the Minister is deemed to have paid, on the day the notice of determination is sent to the applicant, an amount equal to that amount to the applicant in accordance with section 72.

R.S., 1985, c. E-15, s. 74; R.S., 1985, c. 7 (2nd Supp.), s. 34, c. 12 (4th Supp.), s. 30; 1997, c. 26, s. 69.

Recovery of deduction from licensee

75. (1) Where a licensee makes a deduction under section 73 or 74 in lieu of receiving a payment pursuant to section 68.15, subsection 68.15(3) applies, with such modifications as the circumstances require, with respect to the amount of the deduction as if it were a refunded amount within the meaning of that subsection.

Recovery of deduction from licensed manufacturer

(2) Where a licensed manufacturer makes a deduction under section 73 or 74 in lieu of receiving a payment pursuant to section 68.21, subsection 68.21(3) applies, with such modifications as the circumstances require, with respect to the amount of the deduction as if it were a refunded amount within the meaning of that subsection.

R.S., 1985, c. E-15, s. 75; R.S., 1985, c. 7 (2nd Supp.), ss. 30, 34.

75.1 and 75.2 [Repealed, R.S., 1985, c. 7 (2nd Supp.), s. 34]

Calculation of payment or deduction

76. Where circumstances render it difficult to determine the exact amount of any payment that may be made pursuant to any of sections 68 to 68.29 or any deduction that may be made under section 73 or 74, the Minister, with the consent of the person to whom the payment or by whom the deduction may be made, may in lieu of that amount make a payment pursuant to, or authorize a deduction under, that section in an amount determined, in such manner as the Governor in Council may by regulation prescribe, to be the exact amount of the payment or deduction.

R.S., 1985, c. E-15, s. 76; R.S., 1985, c. 15 (1st Supp.), s. 25, c. 7 (2nd Supp.), s. 34.

77. [Repealed, R.S., 1985, c. 7 (2nd Supp.), s. 34]

Returns and Payment of Tax

Monthly returns

78. (1) Every person who is required to pay tax under Part II.1, III, IV or VI shall make each month

(a) in the case of tax under Part II.1, a true return in the prescribed form of all amounts payable by that person on account of tax imposed by that Part for the last preceding month, or

(b) in the case of tax under Part III, IV or VI, a true return in the prescribed form of that person's taxable sales for the last preceding month,

containing such prescribed information as may be required.

Licence holders

(2) Every person holding a licence granted under or in respect of Part II.1, III, IV or VI shall, if

(a) in the case of tax under Part II.1, no amounts are payable by that person on account of tax imposed by that Part for the last preceding month, or

(b) in the case of tax under Part III, IV or VI, no taxable sales have been made during the last preceding month,

make a return as required by subsection (1) stating that fact.

Alternate periods for making returns

(3) Notwithstanding subsections (1) and (2), the Minister may, by regulation,

(a) authorize any person to make a return in respect of any accounting period of not less than twenty-one days and not more than thirty-five days;

(b) authorize any person to make a return in respect of any period longer than one month but not longer than six months, if the tax payable by that person under Part II.1 or Parts III, IV and VI, as the case may be, for the last preceding calendar year did not exceed four thousand eight hundred dollars; or

(c) authorize any person whose taxable services or sales are predominantly limited to a seasonal period of operation to make a return in respect of any period longer than one month but not longer than six months, if the tax payable by that person under Part II.1 or Parts III, IV and VI, as the case may be, for the equivalent period in the last preceding calendar year did not exceed an average of four hundred dollars per month throughout that equivalent period.

Date for filing and payment

(4) Subject to subsection 79(2) and sections 79.1 and 79.2, the return required by this section shall be filed and the tax payable shall be paid

(a) in a case where the return is required to be made in accordance with subsection (1) or (2), not later than the last day of the first month succeeding that in which the taxes became payable or the sales were made, as the case may be;

(b) in a case where the return is authorized to be made in accordance with a regulation made under paragraph (3)(a), not later than the last day of the first authorized accounting period following the end of the accounting period to which the return relates; and

(c) in a case where the return is authorized to be made in accordance with a regulation made under paragraph (3)(b) or (c), not later than the last day of the first month following the end of the period to which the return relates.

R.S., 1985, c. E-15, s. 78; R.S., 1985, c. 15 (1st Supp.), s. 26, c. 7 (2nd Supp.), s. 35, c. 12 (4th Supp.), s. 31.

Penalty and interest on default in paying taxes

79. (1) Subject to subsections (1.1) to (3), a person who defaults in paying tax within the time prescribed by subsection 78(4), in addition to the amount in default, shall pay

(a) in the case of tax required to be paid not later than the last day of a month, a penalty of one-half of one per cent and interest at the prescribed rate, in respect of each month or fraction of a month between that day and the day on which the total tax, penalty and interest outstanding is paid, calculated on the total tax, penalty and interest outstanding in that month or fraction of a month; and

(b) in the case of tax required to be paid not later than the last day of an accounting period, a penalty of one-half of one per cent and interest at the prescribed rate, in respect of each accounting period or fraction of an accounting period between that day and the day on which the total tax, penalty and interest outstanding is paid, calculated on the total tax, penalty and interest outstanding in that accounting period or fraction of an accounting period.

Minimum penalty and interest

(1.1) No penalty or interest is payable under subsection (1) if the person liable to pay the tax pays all taxes payable by him under Parts II.1, III, IV or VI and, at the time of the payment, the total penalty and interest payable in respect of all such taxes is less than ten dollars.

Time for paying penalty or interest

(1.2) A person who is liable to pay penalty or interest under subsection (1) shall pay the penalty or interest not later than the last day of the month or accounting period in respect of which the penalty or interest was calculated.

Extension

(2) The Minister may, before or after the expiration of the time prescribed by subsection 78(4), extend in writing the time for filing a return or paying any tax, and where the Minister so extends the time,

(a) the return shall be filed or the tax shall be paid within the time as so extended;

(b) interest accrues under subsection (1) in respect of the tax as if the time had not been so extended;

(c) no penalty accrues or shall be deemed to have accrued under subsection (1) in respect of the tax before the expiration of the time as so extended; and

(d) penalty accrues under subsection (1) in respect of a default in paying the tax or any portion thereof within the time as so extended as if the default were a default referred to in that subsection.

Security

(3) Where the Minister holds security under section 80.1 for the payment of any tax that is not paid within the time prescribed by subsection 78(4),

(a) interest accrues under subsection (1) in respect of the tax from the expiration of that time; and

(b) penalty accrues under subsection (1) only if the total tax, penalty and interest outstanding, as calculated in respect of each month or accounting period or fraction of a month or accounting period during which the default continues, exceeds the value of the security at the time it is accepted by the Minister and, if accruing, the penalty shall be calculated only on the amount of the excess.

(4) [Repealed, R.S., 1985, c. 12 (4th Supp.), s. 32]

R.S., 1985, c. E-15, s. 79; R.S., 1985, c. 15 (1st Supp.), s. 26, c. 7 (2nd Supp.), s. 36, c. 12 (4th Supp.), s. 32; 1995, c. 46, s. 4; 2000, c. 30, s. 14.

Interpretation

79.1 (1) For the purposes of this section,

(a) a person's "instalment base"

(i) for a month is the lesser of

(A) the tax payable under Part II.1, or Parts III, IV and VI, as the case may be, other than tax payable in accordance with the Customs Act, by that person in that month, and

(B) the tax so payable in the last preceding month,

(ii) for an accounting period is the lesser of

(A) the tax payable under Part II.1, or Parts III, IV and VI, as the case may be, other than tax payable in accordance with the Customs Act, by that person in that accounting period, and

(B) the tax so payable in the last preceding accounting period, and

(iii) for any other period to which a return relates is the lesser of

(A) the tax payable under Part II.1, or Parts III, IV and VI, as the case may be, other than tax payable in accordance with the Customs Act, by that person in that period, and

(B) the tax so payable in the last preceding period multiplied by the ratio that the number of days in the period to which the return relates is to the number of days in the last preceding period; and

(b) a person is a "large taxpayer" at any particular time if

(i) the aggregate amount of taxes payable under Parts II.1, III, IV and VI, other than taxes payable in accordance with the Customs Act, and collected or collectible under Parts II and II.2 by that person in the last preceding calendar year ending at least ninety days, or ninety-one days where that time falls in a leap year, before that time exceeded twelve million dollars, or

(ii) the person

(A) was, at any time in the last preceding calendar year ending at least ninety days, or ninety-one days where that time falls in a leap year, before that time, a member of a group of associated corporations (within the meaning of section 256 of the Income Tax Act) and the aggregate amount of taxes payable under Parts II.1, III, IV and VI, other than taxes payable in accordance with the Customs Act, and collected or collectible under Parts II and II.2 by the group in that year exceeded twelve million dollars, and

(B) is not, at that time, authorized to make a return in accordance with a regulation made under paragraph 78(3)(b) or (c).

Instalment payments by large taxpayers

(2) A large taxpayer who is required to file a return and pay tax within the time prescribed by subsection 78(4) shall pay instalments on account of the tax in accordance with the following rules:

(a) in the case where the return is required to be made in accordance with subsection 78(1), the large taxpayer shall pay two instalments, each equal to one-half of the taxpayer's instalment base for the month in which the tax became payable or the sales were made, as the case may be, the first to be paid not later than the last day of that month and the second not later than the fifteenth day of the next following month; and

(b) in the case where the return is authorized to be made in accordance with a regulation made under paragraph 78(3)(a), the large taxpayer shall pay two instalments, each equal to one-half of the taxpayer's instalment base for the accounting period to which the return relates, the first to be paid not later than the last day of that accounting period and the second not later than the fifteenth day of the next following accounting period.

Instalment payments by other persons

(3) A person, other than a large taxpayer, who is required to file a return and pay tax within the time prescribed by subsection 78(4) shall pay an instalment on account of the tax in accordance with the following rules:

(a) in the case where the return is required to be made in accordance with subsection 78(1), the person shall pay an instalment, equal to the person's instalment base for the month in which the tax became payable or the sales were made, as the case may be, not later than the twenty-first day of the next following month;

(b) in the case where the return is authorized to be made in accordance with a regulation made under paragraph 78(3)(a), the person shall pay an instalment, equal to the person's instalment base for the accounting period to which the return relates, not later than the twenty-first day of the next following accounting period; and

(c) in the case where the return is authorized to be made in accordance with a regulation made under paragraph 78(3)(b) or (c), the person shall pay an instalment, equal to the person's instalment base for the period to which the return relates, not later than the twenty-first day of the month next following the end of that period.

Penalty and interest on default by large taxpayer in paying instalment

(4) Subject to subsections (6) to (8), a large taxpayer who defaults in paying an instalment within the time prescribed by subsection (2) shall, in addition to the amount in default, pay in respect of the period between the end of that time and the end of the time prescribed for payment of the tax on account of which the instalment was payable

(a) in the case of an instalment required to be paid not later than the last day of a month or an accounting period, a penalty of one-half of one per cent and interest at the prescribed rate, calculated on the amount by which

(i) one-half of the taxpayer's instalment base for that month or accounting period

exceeds

(ii) the aggregate of all taxes on account of which the instalment was payable that were paid not later than that day; and

(b) in the case of an instalment required to be paid not later than the fifteenth day of a month or an accounting period, a penalty of one-quarter of one per cent and interest at one-half of the prescribed rate, calculated on the amount by which

(i) one-half of the taxpayer's instalment base for the last preceding month or accounting period

exceeds

(ii) the amount by which the aggregate of all taxes on account of which the instalment was payable that were paid not later than that day exceeds the lesser of

(A) the aggregate of all taxes on account of which the instalment was payable that were paid not later than the last day of the last preceding month or accounting period, and

(B) one-half of the taxpayer's instalment base for the last preceding month or accounting period.

Penalty and interest on default by other persons in paying instalment

(5) Subject to subsections (6) to (8), a person who defaults in paying an instalment within the time prescribed by subsection (3) shall, in addition to the amount in default, pay in respect of the period between the end of that time and the end of the time prescribed for payment of the tax on account of which the instalment was payable

(a) in the case of an instalment required by paragraph (3)(a) or (b) to be paid not later than the twenty-first day of a month or an accounting period, a penalty of one-sixth of one per cent and interest at one-third of the prescribed rate, calculated on the amount by which

(i) the person's instalment base for the last preceding month or accounting period

exceeds

(ii) the aggregate of all taxes on account of which the instalment was payable that were paid not later than that day; and

(b) in the case of an instalment required by paragraph (3)(c) to be paid not later than the twenty-first day of a month next following the end of a period, a penalty of one-sixth of one per cent and interest at one-third of the prescribed rate, calculated on the amount by which

(i) the person's instalment base for that period

exceeds

(ii) the aggregate of all taxes on account of which the instalment was payable that were paid not later than that day.

Minimum penalty and interest

(6) No penalty or interest is payable under subsection (4) or (5) if the large taxpayer or other person liable to pay the instalment pays all taxes payable by the taxpayer or other person under Parts II.1, III, IV or VI and, at the time of the payment, the total penalty and interest payable in respect of the instalment is less than five dollars and in respect of all those taxes is less than ten dollars.

Time for paying penalty or interest

(7) A large taxpayer or other person who is liable to pay penalty or interest under subsection (4) or (5) in respect of a default in paying an instalment shall pay the penalty or interest within the time prescribed by subsection 78(4) for the payment of the tax on account of which the instalment is payable.

Extension

(8) The Minister may, before or after the expiration of the time prescribed by subsection (2) or (3), extend in writing the time for paying an instalment, for any period within the time prescribed by subsection 78(4) for the payment of the tax on account of which the instalment is payable, and where the Minister so extends the time

(a) the instalment shall be paid within the time as so extended;

(b) interest accrues under subsection (4) or (5), as the case may be, in respect of the instalment as if the time had not been so extended;

(c) no penalty accrues or shall be deemed to have accrued under subsection (4) or (5), as the case may be, in respect of the instalment before the expiration of the time as so extended; and

(d) penalty accrues under subsection (4) or (5), as the case may be, in respect of a default in paying an instalment within the time as so extended as if the default were a default referred to in that subsection.

R.S., 1985, c. 12 (4th Supp.), s. 33; 1999, c. 31, s. 247(F).

Filing of returns and payment or remittance of amounts

79.2 (1) A person who is required by this Act, other than Part I, to file a return or to pay or remit an amount shall file the return with the Minister or pay or remit the amount to the Receiver General at such office of the Agency as the Governor in Council may, by regulation, prescribe.

Expiry of time on a holiday

(2) If a person is required by this Act, other than Part I, to file a return or to pay or remit an amount not later than a day and that day falls on a day when the office of the Agency at which the person is required by the regulations to file the return or pay or remit the amount is normally closed for business, that person shall file the return or pay or remit the amount at that office not later than the day last preceding that day when that office is open for business.

Filing of return by mail

(3) Where a person who is required by this section to file a return with the Minister does so by mailing the return, the return shall be deemed to have been filed with the Minister on the day on which the return was mailed and the date of the postmark is evidence of that day.

Payment or remittance of amounts

(4) A person who is required by this section to pay or remit an amount to the Receiver General shall not be considered as having paid or remitted the amount until it is received by the Receiver General.

R.S., 1985, c. 12 (4th Supp.), s. 33; 1999, c. 17, ss. 150(E), 156.

Report by licence holders

80. (1) Every person holding a licence in respect of Parts III and IV shall submit to the Minister each year, within six months after the end of that person's fiscal year, a report in the prescribed form containing details of that person's sales, taxes paid under this Act and deductions under subsection 69(2) in the fiscal year and any other prescribed information.

Alternate reporting

(2) Any person making a return under paragraph 78(3)(b) or (c) may, in lieu of submitting a report under subsection (1), include in the return a report in the prescribed form containing details of the person's sales, taxes paid under this Act and deductions under subsection 69(2) in the period to which the return relates and any other prescribed information.

R.S., 1985, c. E-15, s. 80; R.S., 1985, c. 15 (1st Supp.), s. 27, c. 7 (2nd Supp.), s. 37, c. 12 (4th Supp.), s. 34; 1990, c. 45, s. 11.

Security

Security generally

80.1 (1) The Minister may, if he considers it advisable in a particular case, accept security for the payment of any tax, penalty, interest or other sum that is or may become payable under this Act.

Security on objection or appeal

(2) Where a person is making an objection to or appealing from an assessment, the Minister shall accept adequate security furnished by or on behalf of that person for the payment of any tax, penalty, interest or other sum that is in controversy.

Surrender of security

(3) Where a person who has furnished security, or on whose behalf security has been furnished, under this section requests in writing that the Minister surrender the security or any part thereof, the Minister shall surrender the security to the extent that the value thereof exceeds the amount, at the time the request is received by the Minister, of any tax, penalty, interest or other sum for the payment of which the security was furnished.

Discharge of security

(4) The Minister may discharge in writing any security accepted by the Minister pursuant to this section.

R.S., 1985, c. 7 (2nd Supp.), s. 37.

Obligation of Trustees

Certificate before distribution

81. (1) Every executor, administrator, assignee, liquidator or other like person, other than a trustee in bankruptcy, shall, before distributing any assets under his control in that capacity, obtain a certificate from the Minister certifying that no tax, penalty, interest or other sum under this Act, other than Part I, chargeable against or payable by that person in that capacity or chargeable against or payable in respect of those assets, remains unpaid or that security for the payment thereof has, in accordance with section 80.1, been accepted by the Minister.

Personal liability

(2) Any person who distributes assets without a certificate as required by subsection (1) is personally liable to pay to Her Majesty an amount equal to the lesser of

(a) the value of the assets so distributed, and

(b) the amount of any tax, penalty, interest or other sum that remains unpaid and for the payment of which security has not been furnished to the Minister.

R.S., 1985, c. E-15, s. 81; R.S., 1985, c. 15 (1st Supp.), s. 28, c. 7 (2nd Supp.), s. 38.

Assessments

Assessment

81.1 (1) The Minister may, in respect of any matter, assess a person for any tax, penalty, interest or other sum payable by that person under this Act and may, notwithstanding any previous assessment covering, in whole or in part, the same matter, make such additional assessments as the circumstances require.

Reassessment

(2) The Minister may, in respect of any matter covered by an assessment, vary the assessment or reassess the person assessed.

Completion of assessment

(3) An assessment shall be completed with all due dispatch and may be performed in such manner and form and by such procedure as the Minister considers appropriate.

Minister not bound

(4) The Minister is not bound by any return, application or information supplied by or on behalf of any person and may make an assessment, notwithstanding any return, application or information so supplied or that no return, application or information has been supplied.

Determination of refunds

(5) In making an assessment, the Minister may determine whether an amount is payable to the person being assessed pursuant to any of sections 68 to 68.29.

Presumption

(6) For the purposes of determining, in making an assessment, whether an amount is payable to the person being assessed pursuant to any of sections 68 to 68.29, the person is deemed to have duly made an application under the section on the day on which the notice of assessment is sent to him.

Determination of credits

(7) In making an assessment, the Minister may determine whether a credit may be allowed to the person being assessed pursuant to subsections (8) to (10).

When credit may be allowed

(8) Where an amount would be payable to the person being assessed pursuant to any of sections 68 to 68.29

(a) if that person had duly made an application under the section on the day on which the notice of assessment is sent to him, and

(b) if the reference in the section to "two years" were read as a reference to "four years",

a credit in that amount may be allowed to that person.

Maximum credits allowable

(9) The aggregate of the credits that may be allowed to the person being assessed shall not exceed the aggregate of the taxes, interest, penalty or other sums, if any, remaining unpaid by that person for the period beginning four years before the day on which the notice of assessment is sent to him and ending immediately before two years before that day.

Restriction

(10) No credit may be allowed for any amount that the Minister, pursuant to subsection (5), determines is payable to the person being assessed.

R.S., 1985, c. 7 (2nd Supp.), s. 38.

Sums not assessable

81.11 (1) No assessment shall be made for any penalty or fine imposed pursuant to a conviction for an offence under this Act.

Limitation period for assessments

(2) Subject to subsections (3) to (5), no assessment shall be made for any tax, penalty, interest or other sum more than four years after the tax, penalty, interest or sum became payable under this Act.

Exception where objection or appeal

(3) A variation of an assessment, or a reassessment, may be made at any time pursuant to subsection 81.15(4) or 81.38(1).

Exception where neglect or fraud

(4) An assessment in respect of any matter may be made at any time where the person to be assessed has, in respect of that matter,

(a) made a misrepresentation that is attributable to his neglect, carelessness or wilful default; or

(b) committed fraud in filing or making or failing to file or make a return, or in supplying or failing to supply any information, under this Act.

Exception where waiver

(5) An assessment in respect of any matter specified in a waiver filed pursuant to subsection (6) may be made at any time within the period specified in the waiver or, if a notice of revocation of the waiver has been filed pursuant to subsection (7), within the period commencing on the day on which the period specified in the waiver commences and ending six months after the day on which the notice is filed.

Filing waiver

(6) Any person may, within the time otherwise limited by subsection (2) for assessing that person, waive the application of that subsection to him by filing with the Minister a waiver in the prescribed form specifying the period for which, and the matter in respect of which, the person waives the application of that subsection.

Revoking waiver

(7) Any person who has filed a waiver pursuant to subsection (6) may revoke the waiver on six months notice to the Minister by filing with the Minister a notice of revocation of the waiver in the prescribed form.

R.S., 1985, c. 7 (2nd Supp.), s. 38.

Liability not affected

81.12 (1) Liability under this Act for any tax, penalty, interest or other sum is not affected by an incorrect or incomplete assessment or by the fact that no assessment has been made.

Valid and binding

(2) An assessment, subject to being varied or vacated on an objection or appeal under this Part and subject to a reassessment, shall be deemed to be valid and binding notwithstanding any irregularity, informality, error, defect or omission therein or in any proceeding under this Act relating thereto.

Irregularities

(3) No assessment shall be vacated or varied on an appeal by reason only of an irregularity, informality, error, defect or omission on the part of any person in the observance of any directory provision of this Act.

R.S., 1985, c. 7 (2nd Supp.), s. 38.

Notice of assessment

81.13 (1) After completing an assessment, otherwise than pursuant to subsection 81.15(4) or 81.38(1), the Minister shall send to the person assessed a notice of assessment in the prescribed form setting out

(a) the date of the assessment;

(b) the matter covered by the assessment;

(c) the amount owing or overpayment, if any, by the person assessed;

(d) a brief explanation of the assessment; and

(e) the period within which an objection to the assessment may be made under section 81.15.

Tax payable

(2) Where an assessment establishes that any tax, penalty, interest or other sum payable under this Act remains unpaid by the person assessed, the notice of assessment shall set out separately the taxes, penalties, interest and other sums payable and the aggregate thereof.

Refund payable

(3) Where an assessment establishes that an amount is payable pursuant to any of sections 68 to 68.29 to the person assessed, the notice of assessment shall set out the aggregate of the amounts payable.

Credit allowable

(4) Where an assessment establishes that a credit is allowable pursuant to section 81.1 to the person assessed, the notice of assessment shall set out the aggregate of the credits allowable.

No tax, refund or credit

(5) Where an assessment establishes that

(a) no tax, penalty, interest or other sum payable under this Act remains unpaid by the person assessed,

(b) no amount is payable pursuant to any of sections 68 to 68.29 to the person assessed, or

(c) no credit is allowable pursuant to section 81.1 to the person assessed,

in respect of the matter covered by the assessment, the notice of assessment shall contain a statement to that effect.

Amounts not considered

(6) For the purposes of determining the sums, amounts and credits referred to in subsections (2) to (5), where the assessment is a variation of an assessment, or a reassessment, no amount paid by the person assessed or the Minister on account of the amount owing or overpayment as set out in the notice of the original assessment or any subsequent assessment related thereto, and no amount deemed by subsection 81.14(2) to have been paid, shall be taken into consideration.

Definitions

(7) For the purposes of this section and section 81.14,

"amount owing" «montant dû»

"amount owing", in respect of a person assessed, means

(a) where the assessment is an original assessment, the amount by which

(i) the aggregate of all taxes, penalties, interest and other sums remaining unpaid by that person, as set out in the notice of assessment pursuant to subsection (2),

exceeds

(ii) the aggregate of

(A) all amounts payable to that person, as set out in the notice of assessment pursuant to subsection (3), and

(B) the credits allowable to that person, as set out in the notice of assessment pursuant to subsection (4), and

(b) where the assessment is a variation of an assessment, or a reassessment, the amount by which

(i) the amount obtained by subtracting

(A) the amount paid by that person on account of the amount owing as set out in the notice of the original assessment or any subsequent assessment related thereto

from

(B) the aggregate of all taxes, penalties, interest and other sums remaining unpaid by that person, as set out in the notice of the varied assessment or reassessment pursuant to subsection (2),

exceeds

(ii) the amount obtained by subtracting

(A) the amount paid to that person pursuant to subsection 81.14(1) in respect of an overpayment as set out in the notice of the original assessment or any subsequent assessment related thereto

from

(B) the aggregate of

(I) all amounts payable to that person, as set out in the notice of the varied assessment or reassessment pursuant to subsection (3), and

(II) the credits allowable to that person, as set out in the notice of the varied assessment or reassessment pursuant to subsection (4);

"overpayment" «paiement en trop»

"overpayment", in respect of a person assessed, means

(a) where the assessment is an original assessment, the amount by which the aggregate described in subparagraph (a)(ii) of the definition "amount owing" in this subsection exceeds the aggregate described in subparagraph (a)(i) of that definition, and

(b) where the assessment is a variation of an assessment, or a reassessment, the amount by which the amount described in subparagraph (b)(ii) of that definition exceeds the amount described in subparagraph (b)(i) of that definition.

R.S., 1985, c. 7 (2nd Supp.), s. 38.

Payment by Minister on assessment

81.14 (1) Where an assessment establishes that there is an overpayment by the person assessed, the Minister shall pay to that person the amount of the overpayment as set out in the notice of assessment.

Presumption

(2) Where an assessment establishes that an amount is payable pursuant to any of sections 68 to 68.29, or a credit is allowable pursuant to section 81.1, to the person assessed,

(a) that person is deemed to have paid, on the day on which the notice of assessment is sent to him, an amount equal to the lesser of

(i) where the assessment is an original assessment, the aggregates described in subparagraphs (a)(i) and (ii) of the definition "amount owing" in subsection 81.13(7), and

(ii) where the assessment is a variation of an assessment, or a reassessment, the amounts described in subparagraphs (b)(i) and (ii) of that definition

on account of the person's tax, penalty, interest or other sum payable under this Act in respect of the matter covered by the assessment; and

(b) the Minister is deemed to have paid, on that day, to the person assessed in accordance with section 72 the amount, if any, by which the amount deemed by paragraph (a) to have been paid exceeds the aggregate of the credits described in clause (a)(ii)(B) or subclause (b)(ii)(B)(II), as the case may be, of that definition.

No deemed double payments

(3) Subsection (2) ceases to apply in respect of an assessment if the assessment is subsequently vacated or varied or a reassessment is made in respect of any matter covered by the assessment but, for greater certainty, subject to this subsection, where the assessment is varied or the reassessment is made otherwise than pursuant to subsection 81.15(4) or 81.38(1), subsection (2) applies in respect of the varied assessment or the reassessment, as the case may be.

R.S., 1985, c. 7 (2nd Supp.), s. 38.

Objections

Objection to assessment

81.15 (1) Any person who has been assessed, otherwise than pursuant to subsection (4) or 81.38(1), and who objects to the assessment may, within ninety days after the day on which the notice of assessment is sent to him, serve on the Minister a notice of objection in the prescribed form setting out the reasons for the objection and all relevant facts on which that person relies.

Service

(2) Service of a notice of objection on the Minister shall be effected by prepaid mail addressed to the Minister at Ottawa.

Acceptance of other service

(3) The Minister may accept a notice of objection notwithstanding that it was not served in accordance with subsection (2).

Consideration of objection

(4) Subject to section 81.21, on receipt of a notice of objection, the Minister shall, with all due dispatch, reconsider the assessment and vacate, vary or confirm the assessment or make a reassessment.

Notice of decision

(5) After reconsidering an assessment, the Minister shall send to the person objecting a notice of decision in the prescribed form setting out

(a) the date of the decision;

(b) the amount owing or overpayment by the person objecting, where the Minister varies the assessment or makes a reassessment;

(c) a brief explanation of the decision; and

(d) the period within which an appeal may be made under section 81.19 or 81.2.

Tax payable

(6) Where the variation of an assessment, or a reassessment, on an objection establishes that any tax, penalty, interest or other sum payable under this Act remains unpaid by the person objecting, the notice of decision shall set out separately the taxes, penalties, interest and other sums payable and the aggregate thereof.

Refund payable

(7) Where the variation of an assessment, or a reassessment, on an objection establishes that an amount is payable pursuant to any of sections 68 to 68.29 to the person objecting, the notice of decision shall set out the aggregate of the amounts payable.

Credit allowable

(8) Where the variation of an assessment, or a reassessment, on an objection establishes that a credit is allowable pursuant to section 81.1 to the person objecting, the notice of decision shall set out the aggregate of the credits allowable.

No tax, refund or credit

(9) Where the variation of an assessment, or a reassessment, on an objection establishes that

(a) no tax, penalty, interest or other sum payable under this Act remains unpaid by the person objecting,

(b) no amount is payable pursuant to any of sections 68 to 68.29 to the person objecting, or

(c) no credit is allowable pursuant to section 81.1 to the person objecting,

in respect of the matter covered by the varied assessment or reassessment, the notice of decision shall contain a statement to that effect.

Amounts not considered

(10) For the purposes of determining the sums, amounts and credits referred to in subsections (6) to (9), no amount paid by the person objecting or the Minister on account of the amount owing or overpayment as set out in the notice of assessment, and no amount deemed by subsection 81.14(2) to have been paid, shall be taken into consideration.

Definitions

(11) For the purposes of this section and section 81.16,

"amount owing" «montant dû»

"amount owing", in respect of a person objecting, means the amount by which

(a) the amount obtained by subtracting

(i) the amount paid by that person on account of the amount owing as set out in the notice of assessment

from

(ii) the aggregate of all taxes, penalties, interest and other sums remaining unpaid by that person, as set out in the notice of decision pursuant to subsection (6)

exceeds

(b) the amount obtained by subtracting

(i) the amount paid to that person pursuant to subsection 81.14(1)

from

(ii) the aggregate of

(A) all amounts payable to that person, as set out in the notice of decision pursuant to subsection (7), and

(B) the credits allowable to that person, as set out in the notice of decision pursuant to subsection (8);

"overpayment" «paiement en trop»

"overpayment", in respect of a person objecting, means the amount by which the amount described in paragraph (b) of the definition "amount owing" in this subsection exceeds the amount described in paragraph (a) of that definition.

R.S., 1985, c. 7 (2nd Supp.), s. 38.

Payment by Minister on objection

81.16 (1) Where the variation of an assessment, or a reassessment, on an objection establishes that there is an overpayment by the person objecting, the Minister shall pay to that person the amount of the overpayment as set out in the notice of decision.

Presumption

(2) Where the variation of an assessment, or a reassessment, on an objection establishes that an amount is payable pursuant to any of sections 68 to 68.29, or a credit is allowable pursuant to section 81.1, to the person objecting,

(a) that person is deemed to have paid, on the day on which the notice of decision is sent to him, an amount equal to the lesser of the amounts described in paragraphs (a) and (b) of the definition "amount owing" in subsection 81.15(11) on account of the person's tax, penalty, interest or other sum payable under this Act in respect of the matter covered by the varied assessment or reassessment; and

(b) the Minister is deemed to have paid, on that day, to the person assessed in accordance with section 72 the amount, if any, by which the amount deemed by paragraph (a) to have been paid exceeds the aggregate of the credits described in clause (b)(ii)(B) of that definition.

No deemed double payments

(3) Subject to subsection 81.38(2), subsection (2) ceases to apply in respect of an assessment if the assessment is subsequently vacated or varied or a reassessment is made in respect of any matter covered by the assessment.

Interest on reassessment

(4) Subject to subsection (5), where an amount is paid pursuant to subsection (1), interest at the prescribed rate shall be paid, in respect of each day between the date of the notice of the assessment that is the subject of the objection and the day on which the payment was sent, and compounded monthly on the total amount of the payment and interest outstanding.

Idem

(5) Where a person has paid an amount on account of the amount owing as set out in a notice of assessment and a payment is made to that person pursuant to subsection (1) on an objection to the assessment, interest at the prescribed rate shall be paid, in respect of each day between the day on which the amount was paid by that person and the day on which the payment was sent to that person, and compounded monthly on the total amount of the payment to that person and interest outstanding.

Minimum interest

(6) No interest of less than one dollar is payable pursuant to this section.

R.S., 1985, c. 7 (2nd Supp.), s. 38.

Objection to determination

81.17 (1) Any person who has made an application under any of sections 68 to 69 and who objects to the determination of the Minister respecting the application may, within ninety days after the day on which the notice of determination is sent to that person, serve on the Minister a notice of objection in the prescribed form setting out the reasons for the objection and all relevant facts on which that person relies.

Service

(2) Service of a notice of objection on the Minister shall be effected by prepaid mail addressed to the Minister at Ottawa.

Acceptance of other service

(3) The Minister may accept a notice of objection notwithstanding that it was not served in accordance with subsection (2).

Consideration of objection

(4) Subject to section 81.21, on receipt of a notice of objection, the Minister shall, with all due dispatch, reconsider the determination and vacate, vary or confirm the determination.

Notice of decision

(5) After reconsidering a determination, the Minister shall send to the person objecting a notice of decision in the prescribed form setting out

(a) the date of the decision;

(b) the amount payable, if any, to the person objecting;

(c) a brief explanation of the decision, where the Minister rejects the objection in whole or in part; and

(d) the period within which an appeal may be taken under section 81.19 or 81.2.

Definition of "amount payable"

(6) For the purposes of this section and section 81.18, "amount payable", in respect of a person objecting, means the amount by which

(a) the aggregate of all amounts payable to that person pursuant to sections 68 to 69

exceeds

(b) the amount paid to that person pursuant to subsection 72(6) or authorized to be deducted by that person pursuant to subsection 74(1).

R.S., 1985, c. 7 (2nd Supp.), s. 38.

Payment by Minister

81.18 (1) Subject to subsection (2), where the reconsideration of a determination on an objection establishes that there is an amount payable to the person objecting, the Minister shall pay to that person the amount payable as set out in the notice of decision.

Authorization of deduction

(2) Where the reconsideration of a determination on an objection establishes that there is an amount payable to the person objecting and that person has, in the application that is the subject of the reconsideration, requested the Minister to authorize a deduction under subsection 74(1), the Minister may, in the notice of decision, authorize that person to deduct that amount in accordance with that subsection.

Interest on refund payments

(3) Where an amount is paid pursuant to subsection (1), interest at the prescribed rate shall be paid, in respect of each day between the day that is sixty days after the day on which the application that is the subject of the reconsideration was received by the Minister and the day on which the payment is sent, and compounded monthly on the total amount of the payment and interest outstanding.

Interest on refund deductions

(4) Where a deduction is authorized pursuant to subsection (2), interest at the prescribed rate shall be authorized as a deduction in accordance with subsection 74(1), calculated in respect of each day between the day that is sixty days after the day on which the application was received by the Minister and the day on which the notice of decision was sent, and compounded monthly on the total amount of the deduction and interest outstanding.

Minimum interest

(5) No interest of less than one dollar is payable pursuant to subsection (3) or shall be authorized as a deduction under subsection (4).

R.S., 1985, c. 7 (2nd Supp.), s. 38.

Rights of Appeal

Appeal to Tribunal from assessment or determination of Minister

81.19 Any person who has served a notice of objection under section 81.15 or 81.17, other than a notice in respect of Part I, may, within ninety days after the day on which the notice of decision on the objection is sent to him, appeal the assessment or determination to the Tribunal.

R.S., 1985, c. 7 (2nd Supp.), s. 38, c. 47 (4th Supp.), s. 52.

Appeal to Court from assessment or determination of Minister

81.2 (1) Any person who has served a notice of objection under section 81.15 or 81.17, other than a notice in respect of Part I, may, in lieu of appealing to the Tribunal under section 81.19, appeal the assessment or determination to the Federal Court--Trial Division at any time when, under section 81.19, that person could have appealed to the Tribunal.

Idem

(2) Any person who has served a notice of objection under section 81.15 or 81.17 in respect of Part I may, within ninety days after the day on which the notice of decision on the objection is sent to him, appeal the assessment or determination to the Federal Court--Trial Division.

R.S., 1985, c. 7 (2nd Supp.), s. 38, c. 47 (4th Supp.), s. 52.

Appeal to Tribunal or Court from assessment or determination of Minister

81.21 (1) Any person who has served a notice of objection under section 81.15 or 81.17, other than a notice in respect of Part I, and who states therein that he waives reconsideration of the assessment or determination to which the notice relates and wishes to appeal the assessment or determination directly to the Tribunal or to the Federal Court--Trial Division may so appeal if the Minister consents thereto.

Appeal to Court from assessment or determination of Minister

(2) Any person who has served a notice of objection under section 81.15 or 81.17 in respect of Part I and who states therein that he waives reconsideration of the assessment or determination to which the notice relates and wishes to appeal the assessment or determination directly to the Federal Court--Trial Division may so appeal if the Minister consents thereto.

Copy of notice filed

(3) Where the Minister consents to an appeal pursuant to subsection (1) or (2), the Minister shall file a copy of the notice of objection with the Tribunal or Federal Court--Trial Division, as the case may be, and send a notice of his action to the person who has served the notice of objection.

R.S., 1985, c. 7 (2nd Supp.), s. 38, c. 47 (4th Supp.), s. 52.

Appeal to Tribunal or Court where no decision

81.22 (1) Where a person has served a notice of objection under section 81.15 or 81.17, other than a notice in respect of Part I, and the Minister has not sent a notice of his decision to that person within one hundred and eighty days after the notice of objection was served, that person may appeal the assessment or determination to which the notice relates to the Tribunal or the Federal Court--Trial Division.

Appeal to Court where no decision

(2) Where a person has served a notice of objection under section 81.15 or 81.17 in respect of Part I and the Minister has not sent a notice of his decision to that person within one hundred and eighty days after the notice of objection was served, that person may appeal the assessment or determination to which the notice relates to the Federal Court--Trial Division.

Limitation

(3) No appeal may be instituted pursuant to this section after the Minister has sent a notice of decision to the person who served the notice of objection.

R.S., 1985, c. 7 (2nd Supp.), s. 38, c. 47 (4th Supp.), s. 52.

Appeal to Tribunal or Federal Court--Trial Division

81.23 (1) Where a person has served a notice of objection under section 81.15 in respect of an assessment and thereafter the Minister, otherwise than pursuant to subsection 81.15(4) or 81.38(1), varies the assessment or makes a reassessment in respect of any matter covered by the assessment and sends to that person a notice of assessment in respect of the varied assessment or reassessment, that person may, without serving a notice of objection to the varied assessment or reassessment,

(a) appeal the varied assessment or reassessment to the Tribunal or the Federal Court--Trial Division in accordance with section 81.19 or 81.2, as the case may be, as if the notice of assessment were a notice of decision of the Minister; or

(b) if an appeal has been instituted in respect of the assessment, amend the appeal by joining thereto an appeal in respect of the varied assessment or reassessment in such manner and on such terms, if any, as the Tribunal or the court hearing the appeal, as the case may be, deems appropriate.

Idem

(2) Where a person has appealed an assessment under section 81.22 and thereafter the Minister, pursuant to subsection 81.15(4), varies the assessment or makes a reassessment in respect of any matter covered by the assessment and sends to that person a notice of decision in respect of the varied assessment or reassessment, that person may, without serving a notice of objection to the varied assessment or reassessment, amend the appeal by joining thereto an appeal in respect of the varied assessment or reassessment in such manner and on such terms, if any, as the Tribunal or the Federal Court--Trial Division, as the case may be, deems appropriate.

R.S., 1985, c. 7 (2nd Supp.), s. 38, c. 47 (4th Supp.), s. 52.

Appeal to Court from decision of Tribunal

81.24 Any party to an appeal to the Tribunal under section 81.19, 81.21, 81.22 or 81.23 may, within one hundred and twenty days after the day on which the decision of the Tribunal is sent to that party, appeal the decision to the Federal Court--Trial Division.

R.S., 1985, c. 7 (2nd Supp.), s. 38, c. 47 (4th Supp.), s. 52.

Appeals to Tribunal

Notice to Commissioner

81.25 (1) Where an appeal to the Tribunal is instituted otherwise than pursuant to subsection 81.21(1), the Tribunal shall send a notice of the appeal to the Commissioner at Ottawa.

Material sent to Tribunal

(2) On the receipt of a notice of an appeal under subsection (1) or the filing of a notice of objection with the Tribunal under subsection 81.21(3), the Commissioner shall send to the Tribunal copies of all returns, applications, notices of assessment, notices of objection, notices of decision and notifications, if any, that are relevant to the appeal.

R.S., 1985, c. 7 (2nd Supp.), s. 38, c. 47 (4th Supp.), s. 52; 1999, c. 17, s. 155.

Hearing of appeal

81.26 The Tribunal may hear an appeal under this Part in private if, on application by any party to the appeal, the Tribunal is satisfied that the circumstances of the case justify the hearing being so held.

R.S., 1985, c. 7 (2nd Supp.), s. 38, c. 47 (4th Supp.), s. 52.

Disposition of appeal

81.27 (1) After hearing an appeal under this Part, the Tribunal may dispose of the appeal by making such finding or declaration as the nature of the matter may require and by making an order

(a) dismissing the appeal; or

(b) allowing the appeal in whole or in part and vacating or varying the assessment or determination or referring it back to the Minister for reconsideration.

Costs

(2) No costs may be awarded by the Tribunal on the disposition of an appeal.

Decision of Tribunal

(3) A decision of the Tribunal disposing of an appeal shall be recorded in writing and include the reasons for the decision, and a copy thereof shall forthwith be sent to the parties to the appeal.

Penalty where no reasonable grounds for appeal to Tribunal

(4) Where the Tribunal disposes of an appeal in respect of an assessment or where such an appeal to the Tribunal is discontinued or dismissed without a hearing, the Tribunal may, on application by the Minister, order the person instituting the appeal to pay to the Receiver General an amount not exceeding ten per cent of the amount that was in controversy, if the Tribunal determines that there were no reasonable grounds for the appeal and that one of the main purposes for instituting or maintaining the appeal was to defer the payment of any tax, penalty, interest or other sum payable under this Act.

R.S., 1985, c. 7 (2nd Supp.), s. 38, c. 47 (4th Supp.), s. 52.

Appeals to Court

Institution of appeal to Court

81.28 (1) An appeal to the Federal Court--Trial Division under section 81.2, 81.22 or 81.24 shall be instituted,

(a) in the case of an appeal by a person, other than the Minister, in the manner set out in section 48 of the Federal Court Act; and

(b) in the case of an appeal by the Minister, in the manner provided by the rules made pursuant to the Federal Court Act for the commencement of an action.

Counter-claim or cross-demand

(2) If the respondent in an appeal under section 81.24 from a decision of the Tribunal desires to appeal that decision, he may do so, whether or not the time fixed by that section has expired, by a counter-claim or cross-demand instituted in accordance with the Federal Court Act and the rules made pursuant thereto.

Procedure

(3) An appeal to the Federal Court--Trial Division under this Part shall be deemed to be an action in the Federal Court to which the Federal Court Act and the rules made pursuant thereto applicable to an ordinary action apply, except as varied by special rules made in respect of such appeals and except that

(a) the rules concerning joinder of parties and causes of action do not apply except to permit the joinder of appeals under this Part;

(b) a copy of a notice of objection filed with the Federal Court--Trial Division pursuant to subsection 81.21(3) is deemed to be a statement of claim that is filed with the Court by the person serving the notice and served by him on the Minister on the day it was so filed by the Minister; and

(c) a copy of a notice of objection filed by the Minister pursuant to subsection 81.21(3) or an originating document filed by the Minister pursuant to subsection (1) shall be served in the manner provided in subsection (4).

Service

(4) Where a copy of a notice of objection is filed by the Minister pursuant to subsection 81.21(3) or an originating document is filed by the Minister pursuant to subsection (1) and he files two copies or additional copies thereof, together with a certificate as to the latest known address of the other party to the appeal, an officer of the Court shall, after verifying the accuracy of the copies, forthwith on behalf of the Minister serve the copy of the notice of objection or the originating document, as the case may be, on that other party by sending the copies or additional copies thereof by registered or certified letter addressed to that other party at the address set out in the certificate.

Certificate

(5) Where copies have been served on a party pursuant to subsection (4), a certificate signed by an officer of the Court as to the date of filing and the date of mailing of the copies shall be transmitted to the office of the Deputy Attorney General of Canada and is evidence of the date of filing and the date of service of the documents referred to therein.

R.S., 1985, c. 7 (2nd Supp.), s. 38, c. 47 (4th Supp.), s. 52.

Notice to Tribunal

81.29 (1) Where an appeal is instituted to the Federal Court--Trial Division from a decision of the Tribunal, the Court shall send a notice of the appeal to the Tribunal.

Material sent to Federal Court--Trial Division

(2) On the receipt of a notice of an appeal under subsection (1), the Tribunal shall send to the Court all material filed with or sent to the Tribunal in connection with the appeal, together with a transcript of the record of proceedings before the Tribunal.

Idem

(3) Where an appeal is instituted to the Federal Court--Trial Division from an assessment or determination, the Commissioner shall send to the Court copies of all returns, applications, notices of assessment, notices of objection, notices of decision and notifications, if any, that are relevant to the appeal.

R.S., 1985, c. 7 (2nd Supp.), s. 38, c. 47 (4th Supp.), s. 52; 1999, c. 17, s. 155.

Hearing of appeal

81.3 The Federal Court--Trial Division may hear an appeal under this Part in private if, on application by any party to the appeal, the Court is satisfied that the circumstances of the case justify the hearing being so held.

R.S., 1985, c. 7 (2nd Supp.), s. 38.

Disposition of appeal

81.31 (1) After hearing an appeal under this Part, the Federal Court--Trial Division may dispose of the appeal by making such order, judgment, finding or declaration as the nature of the matter may require including, without limiting the generality of the foregoing, an order

(a) dismissing the appeal; or

(b) allowing the appeal in whole or in part and vacating or varying the assessment or determination or referring it back to the Minister for reconsideration.

Order

(2) Subject to subsection (3), on the disposition of an appeal, the Federal Court--Trial Division may order payment or repayment of any tax, penalty, interest, sum or costs.

Costs

(3) Where the amount in dispute on an appeal by the Minister, other than by way of counter-claim or cross-demand, from a decision of the Tribunal does not exceed ten thousand dollars, the Minister, on disposition of the appeal, shall pay all reasonable and proper costs of the other party to the appeal in connection therewith.

Penalty where no reasonable grounds for appeal to Court

(4) Where the Federal Court--Trial Division disposes of an appeal in respect of an assessment or where such an appeal to the Court is discontinued or dismissed without a hearing, the Court may, on application by the Minister and whether or not the Court awards costs, order the person instituting the appeal to pay to the Receiver General an amount not exceeding ten per cent of the amount that was in controversy, if the Court determines that there were no reasonable grounds for the appeal and that one of the main purposes for instituting or maintaining the appeal was to defer the payment of any tax, penalty, interest or other sum payable under this Act.

R.S., 1985, c. 7 (2nd Supp.), s. 38, c. 47 (4th Supp.), s. 52.

Extension of Time for Objection or Appeal

Extension of time by Tribunal

81.32 (1) Subject to subsection (6), any person entitled to serve a notice of objection under section 81.15 or 81.17, other than a notice in respect of Part I, or to appeal to the Tribunal under section 81.19 may, at any time before or after the expiration of the time limited by that section for so objecting or appealing, apply to the Tribunal for an order extending that time.

Procedure

(2) An application under subsection (1) shall be made by filing with the Tribunal three copies of the application.

Extension of time by Federal Court--Trial Division

(3) Subject to subsection (6), any person entitled to serve a notice of objection under section 81.15 or 81.17 in respect of Part I or to appeal to the Federal Court--Trial Division under section 81.2 or 81.24 may, at any time before or after the expiration of the time limited by that section for so objecting or appealing, apply to the Court for an order extending that time.

Procedure

(4) An application under subsection (3) shall be made by filing a notice of the application with the Court and serving a copy of the notice on the Deputy Attorney General of Canada at least fourteen days before the application is returnable.

Reasons

(5) An application under subsection (1) or (3) shall set out the reasons why the applicant is or was not able to comply with the time limitation.

Limitation

(6) No application may be made pursuant to subsection (1) or (3) more than one year after the expiration of the time limited.

Order

(7) On application pursuant to subsection (1) or (3), the Tribunal or Court may grant an order extending the time limited if

(a) it has not previously made an order extending that time; and

(b) it is satisfied that

(i) the circumstances are such that it is just and equitable to extend the time,

(ii) but for the circumstances referred to in subparagraph (i), an objection would have been made or an appeal would have been instituted, as the case may be, within that time,

(iii) the application was brought as soon as circumstances permitted, and

(iv) there are reasonable grounds for the objection or appeal.

R.S., 1985, c. 7 (2nd Supp.), s. 38, c. 47 (4th Supp.), s. 52.

Purchaser Objections and Appeals

Right to institute proceedings or apply for extensions

81.33 (1) Subject to this section, where

(a) a vendor of goods has made an application under section 68.2 in respect of the sale of the goods and the application was rejected in whole or in part by the Minister, or

(b) a vendor of goods has not paid tax in respect of the sale of the goods

(i) on the basis that the tax was not payable by virtue of subsection 23(6), (7), (8) or (8.1) or 50(5), or

(ii) on the basis that the goods were sold in circumstances that, by virtue of the nature of the purchaser of the goods or the use to which the goods were to be put or by virtue of both such nature and use, rendered the sale exempt from tax under subsection 51(1)

and subsequently the vendor was assessed tax by the Minister in respect of the sale and has recovered the amount of that tax, or a part thereof, from the purchaser of the goods,

the purchaser of the goods may, in substitution for the vendor and in the purchaser's own name as if he were the vendor, institute proceedings under any of sections 81.15, 81.17, 81.19, 81.2, 81.21, 81.22, 81.23 or 81.24 in respect of the rejection or assessment or apply for an extension, under section 81.32, of the time limited for instituting any such proceedings.

Condition precedent

(2) A purchaser may institute proceedings or apply for an extension of the time limited for instituting proceedings pursuant to subsection (1) only if

(a) the vendor has unconditionally assigned to the purchaser in the prescribed form his rights, if any,

(i) to institute proceedings under sections 81.15, 81.17, 81.19, 81.2, 81.21, 81.22, 81.23 or 81.24,

(ii) to make an application under section 81.32, and

(iii) to receive a payment pursuant to section 81.16, 81.18 or 81.38

in respect of the sale and the Minister is served with a true copy of the assignment in accordance with subsection (3);

(b) the vendor has not, within the time limited for instituting the proceedings, instituted the proceedings or applied for an extension, under section 81.32, of that time; or

(c) the proceedings are an appeal arising from proceedings previously instituted by the purchaser pursuant to subsection (1).

Service

(3) Service of a true copy of an assignment on the Minister shall be effected, by prepaid mail addressed to the Minister at Ottawa, within the time limited for instituting the proceedings to which the assignment relates.

Acceptance of other service

(4) The Minister may accept a true copy of an assignment notwithstanding that it was not served by prepaid mail addressed to the Minister at Ottawa.

Deemed extension

(5) For the purpose of permitting a purchaser to institute proceedings or apply for an extension of the time limited for instituting proceedings pursuant to subsection (1) in the circumstances described in paragraph (2)(b), the time limited for instituting the proceedings is deemed to be extended by thirty days.

Purchaser stands in place of vendor

(6) Proceedings and applications under subsection (1) shall be dealt with in all respects as if the purchaser were the vendor and any amounts found, on the conclusion of the proceedings, to be payable under subsection 81.16(1), 81.18(1) or 81.38(1) shall be paid to the purchaser and not to the vendor.

Exception

(7) Where a vendor applies for an extension, under section 81.32, of the time limited for instituting any proceedings after the time has expired, the purchaser may not institute the proceedings or apply for an extension of the time limited for instituting the proceedings pursuant to subsection (1).

Preclusion

(8) Where a purchaser institutes proceedings or applies for an extension of the time limited for instituting proceedings pursuant to subsection (1), the vendor may not apply for an extension, under section 81.32, of the time limited for instituting the proceedings or, in the case described in paragraph (1)(a), make a further application under section 68.2 in respect of the sale.

Intervention

(9) Notwithstanding section 81.34, a vendor of goods may intervene in any proceedings or application for extension of the time limited for instituting proceedings instituted by a purchaser of the goods pursuant to subsection (1), as a party to the proceedings or application.

R.S., 1985, c. 7 (2nd Supp.), s. 38.

Interventions

Interventions

81.34 (1) On application, the Tribunal or Federal Court--Trial Division may make an order permitting any person to intervene in an appeal or a reference to it under this Part as a party thereto, if it is satisfied that the applicant has a substantial and direct interest in the subject-matter of the appeal or reference.

Assistance

(2) On application, the Tribunal or Federal Court--Trial Division may make an order permitting any person to render assistance to it by way of argument in an appeal or a reference to it under this Part, but such person shall not be added as a party thereto.

Terms

(3) The Tribunal or Federal Court--Trial Division may impose such terms and conditions as it deems appropriate in connection with an order under this section.

Procedure

(4) An application under subsection (1) shall be made by filing a notice of the application with the Tribunal or Court, as the case may be, and serving a copy of the notice on the parties to the appeal or reference at least fourteen days before the application is returnable.

Matters considered

(5) The Tribunal or Court, in any application under this section, shall consider the possibility of undue delay or prejudice or any other matter that it deems appropriate in exercising its discretion pursuant to this section.

R.S., 1985, c. 7 (2nd Supp.), s. 38, c. 47 (4th Supp.), s. 52.

81.35 [Repealed, R.S., 1985, c. 47 (4th Supp.), s. 52]

References

Reference to Federal Court--Trial Division

81.36 (1) The Minister may refer any question of law, fact or mixed law and fact relating to this Act to the Federal Court--Trial Division for hearing and determination.

Contents of reference

(2) A reference under subsection (1) shall set out

(a) the question to be determined;

(b) the names of any specific persons that the Minister seeks to have bound by the determination; and

(c) the facts and arguments on which the Minister intends to rely at the hearing.

Service

(3) A copy of a reference under subsection (1) shall be served by the Minister on the persons, if any, named in the reference pursuant to subsection (2) and on such other persons as, in the opinion of the Court, are likely to be affected by the determination of the question set out in the reference.

Notice

(4) Where a reference under subsection (1) is made to the Court and the Court is of the opinion that persons, other than those named in the reference pursuant to subsection (2), are likely to be affected by the determination of the question set out in the reference but that the identity of those persons is not known or readily ascertainable, the Court may direct that notice of the reference be given in such manner as it considers will most likely come to the attention of those other persons.

Suspension of time limitations

(5) The period beginning on the day the Minister institutes proceedings in the Court pursuant to subsection (1) to have a question determined and ending on the day the question is finally determined shall not be counted in determining

(a) the time limited by subsection 81.15(1) or 81.17(1) for serving a notice of objection by any person who is served with a copy of the reference pursuant to subsection (3) or who appears as a party at the hearing to determine the question;

(b) the time limited by section 81.19, 81.2 or 81.24 for instituting an appeal by any person referred to in paragraph (a); or

(c) the time limited by section 82 for commencing proceedings to recover any tax, penalty, interest or other sum payable under this Act by any person referred to in paragraph (a).

Final and binding

(6) A determination of the Federal Court--Trial Division under this section is, subject to an appeal, final and binding on any person who is served with a copy of the reference pursuant to subsection (3) or who appears as a party at the hearing to determine the question.

R.S., 1985, c. 7 (2nd Supp.), s. 38.

Reference to Federal Court--Trial Division

81.37 (1) Where the Minister and a person agree in writing that a question of law, fact or mixed law and fact relating to this Act should be determined by the Federal Court--Trial Division, that question shall be determined by the Court pursuant to subsection 17(3) of the Federal Court Act.

Suspension of time limitations

(2) The period beginning on the day proceedings are instituted in the Court pursuant to subsection (1) to have a question determined and ending on the day the question is finally determined shall not be counted in determining

(a) the time limited by subsection 81.15(1) or 81.17(1) for serving a notice of objection by the person who agreed to refer the question or any person who appears as a party at the hearing to determine the question;

(b) the time limited by section 81.19, 81.2 or 81.24 for instituting an appeal by any person referred to in paragraph (a); or

(c) the time limited by section 82 for commencing proceedings to recover any tax, penalty, interest or other sum payable under this Act by any person referred to in paragraph (a).

R.S., 1985, c. 7 (2nd Supp.), s. 38.

Payments by Minister on Appeals

Payment by Minister on appeal

81.38 (1) Where the Tribunal, the Federal Court or the Supreme Court of Canada has, on the disposition of an appeal under this Part,

(a) vacated or varied an assessment or a determination of the Minister respecting an application under any of sections 68 to 69,

(b) referred an assessment or a determination described in paragraph (a) back to the Minister for reconsideration, or

(c) ordered the Minister to pay or repay any tax, penalty, interest or other sum,

unless otherwise directed in writing by the person who served the notice of objection, the Minister shall, with all due dispatch, whether or not a further appeal is instituted,

(d) where the assessment or determination is referred back to the Minister, reconsider the assessment or determination and vary the assessment or determination or make a reassessment or a further determination in accordance with the decision of the Tribunal or Court, and

(e) pay or repay, or surrender any security accepted for the payment of, any tax, penalty, interest or other sum in accordance with the varied assessment or determination, the reassessment or further determination of the Minister or the decision or order of the Tribunal or Court.

Provisions applicable to reconsideration of assessments

(2) Subsections 81.15(5) to (11) and 81.16(2) and (3) apply, with such modifications as the circumstances require, to the reconsideration of an assessment under subsection (1) as if

(a) the words "or a notice of decision" were added immediately after the words "notice of assessment" in subsection 81.15(10) and paragraph (a) of the definition "amount owing" in subsection 81.15(11);

(b) the reference in subsection 81.15(10) to "subsection 81.14(2)" were a reference to "subsection 81.14(2) or 81.16(2)"; and

(c) the reference in paragraph (b) of the definition "amount owing" in subsection 81.15(11) to "subsection 81.14(1)" were a reference to "subsections 81.14(1), 81.16(1) and 81.38(1)".

Provisions applicable to reconsideration of determinations

(3) Subsections 81.17(5) and (6) apply, with such modifications as the circumstances require, to the reconsideration of a determination under subsection (1) as if

(a) the reference in paragraph (b) of the definition "amount payable" in subsection 81.17(6) to "subsection 72(6)" were a reference to "subsections 72(6), 81.18(1) and 81.38(1)"; and

(b) the reference in that paragraph to "subsection 74(1)" were a reference to "subsections 74(1) and 81.18(2)".

Payment in other appeals

(4) Where, having regard to the reasons given on the disposition of an appeal referred to in subsection (1), the Minister is satisfied that it would be just and equitable to make a payment to, or surrender any security furnished by or on behalf of, any other person who has served a notice of objection or instituted an appeal, the Minister may, with the consent of that person and subject to such terms and conditions as the Minister may prescribe, pay or repay to that person any tax, penalty, interest or other sum or surrender any security accepted for the payment thereof.

Right of appeal preserved

(5) Nothing in this section shall be construed as derogating from the right of the Minister to appeal from a decision of the Tribunal or the Federal Court on an appeal referred to in subsection (1), and any such appeal from a decision of the Tribunal shall proceed as if it were an appeal from the assessment or determination that was the subject of the decision.

Interest on assessment

(6) Subject to subsection (7), where a payment is made pursuant to subsection (1) or (4) in respect of an assessment, interest at the prescribed rate shall be paid, in respect of each day between the date of the notice of assessment and the day on which the payment was sent, and compounded monthly on the total amount of the payment and interest outstanding.

Idem

(7) Where a person has paid an amount on account of the amount owing as set out in a notice of assessment or a notice of decision and a payment is made to that person pursuant to subsection (1) or (4) in respect of the assessment, interest at the prescribed rate shall be paid, in respect of each day between the day on which the amount was paid by that person and the day on which the payment was sent to that person, and compounded monthly on the total amount of the payment to that person and interest outstanding.

Interest on refunds

(8) Where a payment is made under subsection (1) or (4) in respect of an application under any of sections 68 to 68.161 and 68.165 to 69, interest at the prescribed rate shall be paid, in respect of each day between the day that is sixty days after the day on which the application was received by the Minister and the day on which the payment was sent, and compounded monthly on the total amount of the payment and interest outstanding.

Interest on refunds

(8.1) Where a payment is made under subsection (1) or (4) in respect of an application under section 68.162, 68.163 or 68.164, interest at the prescribed rate shall be paid, in respect of each day between the day on which the application was received by the Minister and the day on which the payment was sent, and compounded monthly on the total amount of the payment and interest outstanding.

Minimum interest

(9) No interest of less than one dollar is payable pursuant to this section.

R.S., 1985, c. 7 (2nd Supp.), s. 38, c. 47 (4th Supp.), s. 52; 1994, c. 29, s. 9.

Overpayments by Minister

Deemed tax

81.39 (1) Subject to subsection (4), where a person has

(a) received a drawback under section 70,

(b) received a payment under subsection 72(6) or (7), 81.14(1), 81.16(1), (4) or (5), 81.18(1) or (3) or 120(7), or

(c) made a deduction under subsection 69(2), 73(1), (2) or (3), 74(1) or (3) or 81.18(2) or (4)

to which that person was not entitled or in excess of the drawback, payment or deduction to which he was entitled, the amount of the drawback, payment or deduction or the excess is deemed to be a tax under this Act payable by that person not later than the last day of the first month succeeding that in which the drawback, payment or deduction was made.

Idem

(2) Where a person has received a payment under subsection 81.38(1), (6), (7) or (8) and, on the final disposition of the appeal by further appeal or otherwise, it is determined that the person was not entitled to the payment or that the payment was in excess of the payment to which he was entitled, the amount of the payment or the excess is deemed to be a tax under this Act payable by that person not later than the last day of the first month succeeding that in which the appeal was finally disposed of.

Idem

(3) Where a person has received a payment under subsection 81.38(4), (6), (7) or (8) and, on the final disposition by further appeal or otherwise of the appeal referred to in subsection 81.38(1) on the basis of which the payment was made, it is determined that the person was not entitled to the payment or that the payment was in excess of the payment to which he was entitled, the amount of the payment or the excess is deemed to be a tax under this Act payable by that person not later than the last day of the first month succeeding that in which the appeal was finally disposed of.

Idem

(4) Where a person is liable to pay an amount under subsection 68.15(3), 68.16(4) or 68.21(3), that amount is deemed to be a tax under this Act payable by that person not later than the last day of the first month succeeding that in which the liability arose.

Penalty and interest for default

(5) On default of payment of any tax payable under subsection (1) or (4) within the time prescribed therefor, the person liable to pay the tax shall pay, in addition to the amount of the default, a penalty of one-half of one per cent and interest at the prescribed rate, in respect of each month or fraction of a month between the expiration of that time and the day on which the total tax, penalty and interest is paid, calculated on the total tax, penalty and interest outstanding in that month.

Interest

(6) A person liable to pay tax under subsection (2) or (3), in addition to the amount of the tax, shall pay, not later than the last day on which the tax is payable, interest at the prescribed rate, in respect of each month or fraction of a month beginning with the first month succeeding that in which the amount constituting the tax was sent to that person and ending with the month in which the appeal was finally disposed of, calculated on the total tax and interest outstanding in that month.

Penalty and interest for default

(7) On default of payment of any tax payable under subsection (2) or (3) or interest payable under subsection (6) within the time prescribed therefor, the person liable to pay the tax or interest shall pay, in addition to the amount of the default, a penalty of one-half of one per cent and interest at the prescribed rate, in respect of each month or fraction of a month between the expiration of that time and the day on which the total tax, penalty and interest is paid, calculated on the total tax, penalty and interest outstanding in that month.

Time for paying penalty and interest

(8) Any penalty or interest that accrues under subsection (5) or (7) shall be paid not later than the last day of the month in respect of which the penalty or interest was calculated.

Security

(9) Where the Minister holds security under section 80.1 for the payment of any tax under this section or interest under subsection (6) that is not paid within the time prescribed by this section,

(a) interest accrues under subsection (5) or (7), as the case may be, in respect of the tax or interest from the expiration of that time; and

(b) penalty accrues under subsection (5) or (7), as the case may be, only if the total tax, penalty and interest outstanding, as calculated in respect of each month or fraction of a month during which the default continues, exceeds the value of the security at the time it is accepted by the Minister and, if accruing, the penalty shall be calculated only on the amount of the excess.

Penalty and interest under ten dollars not payable

(10) No penalty or interest is payable under subsection (5), (6) or (7) if the person otherwise liable to pay the penalty or interest pays all taxes payable by him under this section and, at the time of the payment, the total penalty and interest otherwise payable by that person under this section is less than ten dollars.

R.S., 1985, c. 7 (2nd Supp.), s. 38; 1993, c. 27, s. 4.

Collection

Debts due to Her Majesty

82. (1) All taxes, penalties, interest or other sums payable under this Act are debts due to Her Majesty in right of Canada and are recoverable as such in the Federal Court or any other court of competent jurisdiction or in any other manner provided by this Act.

Limitation period

(2) Subject to subsection (3), no proceedings for the recovery of any tax, penalty, interest or other sum payable under this Act shall be commenced in a court more than four years after the sum becomes payable, unless the person by whom the sum is payable has been assessed for that sum under this Part.

Exception where misrepresentation or fraud

(3) Proceedings for the recovery of any tax, penalty, interest or other sum payable under this Act may be commenced in a court at any time if payment thereof was avoided by reason of a misrepresentation attributable to neglect, carelessness or wilful default or by reason of fraud.

Recovery of penalties and fines for offence from corporation

(4) Where a penalty or fine is imposed on a corporation pursuant to a conviction for an offence under this Act and the conviction or a certified copy thereof is produced to the Federal Court, the conviction shall be registered in the Court and, when registered, has the same force and effect, and all proceedings may be taken thereon, as if the conviction were a judgment obtained in the Court for a debt of the amount of the penalty or fine and costs, if any, specified in the conviction.

Penalties and interest on judgments

(5) Where a judgment is obtained for any tax, penalty, interest or other sum payable under this Act, including a certificate registered under section 83, the provisions of this Act by virtue of which a penalty or interest is payable for failure to pay or remit the sum apply, with such modifications as the circumstances require, to failure to pay the judgment debt, and the penalty and interest are recoverable in the same manner as the judgment debt.

R.S., 1985, c. E-15, s. 82; R.S., 1985, c. 7 (2nd Supp.), s. 41.

Certificate of default

83. (1) The Minister may certify that any tax, penalty, interest or other sum payable under this Act has not been paid as and when required by this Act.

Certificate has effect of judgment

(2) On production to the Federal Court, a certificate made under this section shall be registered in the Court and, when registered, has the same force and effect, and all proceedings may be taken thereon, as if the certificate were a judgment obtained in the Court for a debt of the amount specified in the certificate.

Costs

(3) All reasonable costs and charges attendant on the registration of the certificate are recoverable in the same manner as if they had been certified and the certificate had been registered under this section.

R.S., 1985, c. E-15, s. 83; R.S., 1985, c. 7 (2nd Supp.), s. 41.

Garnishment

84. (1) Where the Minister has knowledge or suspects that a person is or is about to become liable to make a payment to a tax debtor, the Minister may, by a notice served personally or by registered or certified mail, require that person to pay to the Receiver General, on account of the tax debtor's liability under this Act, the whole or any part of the moneys that would otherwise, within ninety days after the service of the notice, be paid or become payable to the tax debtor.

Application of notice

(2) Where the Minister has, under subsection (1), required a person to pay to the Receiver General moneys otherwise payable to a tax debtor, the requirement applies in respect of all moneys that are or will become payable by that person to the tax debtor within the ninety day period referred to in that subsection until the tax debtor's liability under this Act is satisfied.

Assignment of book debts

(3) Where the Minister has knowledge or suspects that a person has received, or is about to receive, an assignment of a book debt or of a negotiable instrument of title to a book debt from a tax debtor, the Minister may, by a notice served personally or by registered or certified mail, require that person to pay to the Receiver General, on account of the tax debtor's liability under this Act, out of any moneys received by that person on account of the debt within ninety days after service of the notice, an amount equal to the amount of any tax, penalty, interest or other sum payable under this Act in respect of the transaction giving rise to the debt assigned.

Failure to comply

(4) Any person on whom a notice is served under this section shall pay the Receiver General according to the terms thereof and, in default of payment, is liable to pay to Her Majesty an amount equal to the lesser of

(a) in the case of a person served under subsection (1),

(i) the amount of the tax debtor's liability under this Act, and

(ii) the amount payable to the tax debtor by that person, and

(b) in the case of a person served under subsection (3),

(i) the amount of any tax, penalty, interest or other sum payable under this Act in respect of the transaction giving rise to the debt assigned to that person, and

(ii) the amount received by that person on account of the debt assigned after receipt of the notice.

Penalty and interest on default in paying amount

(5) Any person liable to pay an amount under subsection (4) shall pay, in addition to that amount, a penalty of one-half of one per cent and interest at the prescribed rate, in respect of each month or fraction of a month between the first day of the month following the month in which the default occurs and the day on which the total amount, penalty and interest is paid, calculated on the total amount, penalty and interest outstanding in that month or fraction of a month.

Time for paying penalty or interest

(6) A person who is liable to pay penalty or interest under subsection (5) shall pay the penalty or interest not later than the last day of the month in respect of which the penalty or interest was calculated.

Application of payments

(7) Any moneys paid by a person pursuant to subsection (4) or (5) shall, in addition to being applied to that person's liability under this section, be applied on account of the tax debtor's liability under this Act.

Receipt of Minister

(8) The receipt of the Minister for moneys paid as required by subsection (1) or, in default thereof, by subsection (4) or (5) is a good and sufficient discharge of the liability to the tax debtor to the extent of the amount set out in the receipt.

Definition of "tax debtor"

(9) In this section, "tax debtor" means a person by whom any tax, penalty, interest or other sum is payable under this Act.

R.S., 1985, c. E-15, s. 84; R.S., 1985, c. 15 (1st Supp.), s. 29, c. 7 (2nd Supp.), ss. 39, 41, c. 42 (2nd Supp.), s. 10, c. 12 (4th Supp.), s. 35.

Retention by deduction or set-off

85. Where a person is indebted to Her Majesty in right of Canada under this Act, the Minister may require the retention, by way of deduction or set-off, out of any amount that may be or become payable to that person by Her Majesty in right of Canada, of such amount as the Minister may specify.

R.S., 1985, c. E-15, s. 85; R.S., 1985, c. 15 (1st Supp.), s. 29, c. 7 (2nd Supp.), s. 41.

Exclusion of penalties and fines for offences

86. (1) Subsections 82(3) and (5) and sections 83 to 85 do not apply in respect of any penalty or fine imposed pursuant to a conviction for an offence under this Act.

Restriction on certificate of default

(2) The Minister shall not certify under section 83 that a sum has not been paid, unless the person by whom the sum is payable has been assessed for that sum under this Part.

Restriction on garnishment and retention

(3) The Minister shall not

(a) serve a notice under section 84 in respect of a sum payable under this Act, or

(b) require under section 85 the retention of an amount in respect of a sum payable under this Act,

unless the person by whom the sum is payable has been assessed for that sum under this Part or a judgment against that person for the payment of that sum has been rendered by a court of competent jurisdiction.

Delay where assessment

(4) Where a person has been assessed for any sum payable under this Act, otherwise than pursuant to subsection 81.15(4) or 81.38(1), the Minister shall not, for the purpose of collecting that sum,

(a) commence legal proceedings in a court,

(b) make a certificate under section 83,

(c) serve a notice under section 84, or

(d) require under section 85 the retention of an amount

before ninety days after the day on which the notice of assessment is sent to that person.

Delay where objection

(5) Where a person has served a notice of objection under section 81.15, otherwise than pursuant to section 81.33, the Minister shall not, for the purpose of collecting the sum in controversy, take any of the actions described in paragraphs (4)(a) to (d) before ninety days after the day on which the notice of decision is sent to that person.

Delay where appeal

(6) Where a person has appealed to the Tribunal or the Federal Court--Trial Division under this Part, otherwise than pursuant to section 81.33, in respect of an assessment, the Minister shall not, for the purpose of collecting the sum in controversy, take any of the actions described in paragraphs (4)(a) to (d),

(a) where the appeal is to the Tribunal, before the day on which a copy of the decision of the Tribunal is sent to that person or that person discontinues the appeal; and

(b) where the appeal is to the Federal Court--Trial Division, before the day on which the judgment of the Court is rendered or that person discontinues the appeal.

Delay where reference

(7) Where a person is named in a reference under section 81.36, agrees to a reference under section 81.37 or appears as a party at the hearing of any such reference, the Minister shall not, for the purpose of collecting any sum for which that person has been assessed and of which the liability for payment will be affected by the determination of the question, take any of the actions described in paragraphs (4)(a) to (d) before the day on which the question is determined by the Court.

Delay where agreement

(8) Notwithstanding subsections (1) to (7), where a person has served a notice of objection under section 81.15 or has appealed to the Tribunal or the Federal Court--Trial Division under this Part, otherwise than pursuant to section 81.33, in respect of an assessment and agrees in writing with the Minister to delay proceedings on the objection or appeal until a decision or judgment is rendered in another action before the Tribunal, the Federal Court or the Supreme Court of Canada in which the issue is the same or substantially the same as that raised in the objection or appeal of that person, the Minister may take any of the actions described in paragraphs (4)(a) to (d) for the purpose of collecting any sum for which that person has been assessed determined in a manner consistent with the decision or judgment of the Tribunal or Court in the other action at any time after the Minister notifies that person in writing that such decision or judgment has been rendered.

Exception

(9) Subsections (2) and (3) do not apply in respect of any amount deemed to be a tax by subsection 81.39(2) or (3).

R.S., 1985, c. E-15, s. 86; R.S., 1985, c. 15 (1st Supp.), s. 30, c. 7 (2nd Supp.), s. 41, c. 47 (4th Supp.), s. 52.

Collection in jeopardy

87. (1) Notwithstanding section 86, where it may reasonably be considered that the collection of any sum for which a person has been assessed would be jeopardized by a delay under that section and the Minister has, by a notice served personally or by registered or certified mail, so advised that person and directed him to pay that sum or any part thereof, the Minister may forthwith take any of the actions described in paragraphs 86(4)(a) to (d) with respect to that sum or part.

Application to vacate direction

(2) Any person on whom a direction is served under subsection (1) may

(a) on three days notice of motion to the Deputy Attorney General of Canada, apply to a judge of a superior court having jurisdiction in the province in which that person resides or to a judge of the Federal Court for an order fixing a day, not earlier than fourteen days nor later than twenty-eight days after the date of the order, and place for the determination of the question whether the direction was justified in the circumstances;

(b) serve a copy of the order on the Deputy Attorney General of Canada within six days after the day on which it was made; and

(c) if that person has proceeded as authorized by paragraph (b), apply at the appointed time and place for an order determining the question.

Time for application

(3) An application to a judge under paragraph (2)(a) shall be made

(a) within thirty days after the day on which the direction under subsection (1) was served; or

(b) within such further time as the judge, on being satisfied that the application was made as soon as circumstances permitted, may allow.

Hearing in private

(4) An application to a judge under paragraph (2)(c) may, on request of the applicant, be heard in private if the applicant establishes to the satisfaction of the judge that the circumstances of the case justify proceedings being held in private.

Burden to justify direction

(5) On the hearing of an application under paragraph (2)(c), the burden of justifying the direction is on the Minister.

Disposition of application

(6) On an application under paragraph (2)(c), the judge shall determine the question summarily and may confirm, vacate or vary the direction and make such other order as he considers appropriate.

Continuation by another judge

(7) Where the judge to whom an application has been made under paragraph (2)(a) cannot for any reason act or continue to act in the application under paragraph (2)(c), the application under paragraph (2)(c) may be made to another judge.

Costs

(8) No costs may be awarded by a judge on the disposition of an application under subsection (2).

R.S., 1985, c. E-15, s. 87; R.S., 1985, c. 15 (1st Supp.), s. 31, c. 7 (2nd Supp.), s. 41.

88. to 94. [Repealed, R.S., 1985, c. 7 (2nd Supp.), s. 41]

Application of penalties and fines

95. (1) The amount of all penalties and fines under this Act belong to Her Majesty in right of Canada for the public uses of Canada and form part of the Consolidated Revenue Fund.

Application of penalty on account of tax

(2) Where a penalty calculated by reference to the amount of the tax that should have been paid or collected or the amount of stamps that should have been affixed or cancelled is imposed and recovered under or pursuant to this Act, the Minister may direct that the amount thereof or any portion thereof be applied on account of the tax that should have been paid or collected or the indebtedness arising out of the failure to affix or cancel the stamps.

R.S., 1985, c. E-15, s. 95; R.S., 1985, c. 7 (2nd Supp.), s. 42.

Punishment for failure to pay or collect taxes or affix stamps

96. (1) Every person who, being required, by or pursuant to this Act, to pay or collect taxes or other sums, or to affix or cancel stamps, fails to do so as required is guilty of an offence and, in addition to any other punishment or liability imposed by law for that failure, is liable on summary conviction to a fine of

(a) not less than the aggregate of twenty-five dollars and an amount equal to the tax or other sum that he should have paid or collected or the amount of stamps that he should have affixed or cancelled, as the case may be, and

(b) not more than the aggregate of one thousand dollars and an amount equal to the tax or other sum or amount of stamps, as the case may be,

and in default of payment of the fine to imprisonment for a term of not less than thirty days and not more than twelve months.

Punishment for contravention

(2) Every person who contravenes any of the provisions of this Act or of a regulation made by the Minister under this Act for which no other punishment is provided is liable on summary conviction to a fine of not less than fifty dollars and not more than one thousand dollars.

Officers, etc., of corporations

(3) Where a corporation commits an offence under this Act, any officer, director or agent of the corporation who directed, authorized, assented to, acquiesced in, or participated in the commission of the offence is a party to and guilty of the offence and is liable on summary conviction to the punishment provided for the offence whether or not the corporation has been prosecuted or convicted.

R.S., 1985, c. E-15, s. 96; R.S., 1985, c. 7 (2nd Supp.), s. 43.

Failing to file return

97. (1) Every person required, by or pursuant to any Part except Part I, to file a return, who fails to file the return within the time it is required to be filed, is guilty of an offence and liable to a fine of not less than ten dollars and not more than one hundred dollars.

False or deceptive statements

(2) When

(a) a return is filed as required by or pursuant to any Part except Part I, or

(b) an application is made under any of sections 68 to 70,

every person who makes, assents to or acquiesces in the making of, false or deceptive statements in the return or application is guilty of an offence and liable on summary conviction to a fine of

(c) not less than the aggregate of one hundred dollars and an amount equal to

(i) double the amount of the tax that should have been paid in or in respect of the period covered by the return, or

(ii) double the amount of the tax or other sum that he obtained and accepted by reason of the application, and

(d) not more than the aggregate of one thousand dollars and an amount equal to double the amount of the tax or other sum,

and in default of payment of the fine to imprisonment for a term of not more than twelve months.

(3) [Repealed, R.S., 1985, c. 12 (4th Supp.), s. 36]

R.S., 1985, c. E-15, s. 97; R.S., 1985, c. 15 (1st Supp.), s. 35, c. 7 (2nd Supp.), s. 44, c. 12 (4th Supp.), s. 36.

Offence of selling in another province tobacco marked for sale in Ontario

97.1 If manufactured tobacco, other than tobacco sticks, has been marked or stamped in accordance with a statute of the Province of Ontario to indicate that the manufactured tobacco is intended for sale in that province, every person who sells or offers for sale the manufactured tobacco to a consumer in any other province is guilty of an offence and is liable on summary conviction to a fine of not less than $1,000 and not more than the greater of $1,000 and triple the amount by which

(a) the excise tax that would be imposed under section 23 in respect of the manufactured tobacco if the applicable rates of excise tax were the rates set out in paragraphs 1(f) and 3(e) of Schedule II

exceeds

(b) the excise tax that was imposed under section 23 in respect of the manufactured tobacco.

1994, c. 29, s. 10; 1997, c. 26, s. 70; 2000, c. 30, s. 15.

Offence of selling in another province cigarettes marked for sale in Quebec or N.B.

97.2 If cigarettes have been marked or stamped in accordance with a statute of the Province of Quebec or New Brunswick to indicate that they are intended for sale in that province, every person who sells or offers for sale the cigarettes to a consumer in any other province is guilty of an offence and is liable on summary conviction to a fine of not less than $1,000 and not more than the greater of $1,000 and triple the amount by which

(a) the excise tax that would be imposed under section 23 in respect of the cigarettes if the applicable rate of excise tax were the rate set out in paragraph 1(f) of Schedule II

exceeds

(b) the excise tax that was imposed under section 23 in respect of the cigarettes.

1994, c. 29, s. 10; 1997, c. 26, s. 71; 2000, c. 30, s. 16.

Offence of selling in another province cigarettes marked for sale in N.S.

97.3 Where cigarettes have been marked or stamped in accordance with a statute of the Province of Nova Scotia to indicate that the cigarettes are intended for sale in that province, every person who sells or offers for sale the cigarettes to a consumer in any other province, other than the Province of Prince Edward Island, is guilty of an offence and is liable on summary conviction to a fine of not less than $1,000 and not more than the greater of $1,000 and triple the amount by which

(a) the excise tax that would be imposed under section 23 in respect of the cigarettes if the applicable rate of tax were the rate set out in paragraph 1(f) of Schedule II

exceeds

(b) the excise tax that was imposed under section 23 in respect of the cigarettes.

1994, c. 29, s. 10; 1995, c. 36, s. 7; 1997, c. 26, s. 72.

Definitions

97.4 (1) In this section,

"on-reserve retailer" « détaillant situé dans une réserve »

"on-reserve retailer" means a retailer on a reserve in the Province of Ontario who is authorized under the Tobacco Tax Act, R.S.O. 1990, c. T.10, to sell black stock cigarettes, in the ordinary course of the retailer's business, to Indian consumers in the Province of Ontario;

"reserve" « réserve »

"reserve" means a reserve as defined in subsection 2(1) of the Indian Act or an Indian settlement as defined in section 2 of the Indians and Bands on certain Indian Settlements Remission Order;

"supplier" « fournisseur »

"supplier" means a wholesaler who has a permit under section 9 of the Tobacco Tax Act, R.S.O. 1990, c. T.10, to purchase and sell black stock cigarettes.

Offence of unauthorized sale of tobacco intended for Indian reserve

(2) Every person who sells or offers for sale black stock in respect of which excise tax was imposed under section 23 at a rate provided for under paragraph 1(a) or 3(a) of Schedule II, because of the application of subparagraph 1(a)(ii) or 3(a)(ii) of that Schedule, to a person other than a supplier, an on-reserve retailer or an Indian consumer in the Province of Ontario is guilty of an offence and liable on summary conviction to a fine of not less than $1,000 and not more than the greater of $1,000 and triple the amount by which

(a) the excise tax that would be imposed under section 23 in respect of the black stock if the applicable rates of excise tax were the rates set out in paragraphs 1(f) and 3(e) of Schedule II

exceeds

(b) the excise tax that was imposed under section 23 in respect of the black stock.

1994, c. 29, s. 10; 2000, c. 30, s. 17.

Definitions

97.5 (1) In this section,

"band" « bande »

"band" has the same meaning as in subsection 2(1) of the Indian Act;

"council" « conseil »

"council" of a band has the same meaning as in subsection 2(1) of the Indian Act;

"designated retail vendor" « vendeur au détail désigné »

"designated retail vendor" means a retail vendor on a reserve in the Province of Nova Scotia who is designated in writing by the council of a band in Nova Scotia, and by the Provincial Tax Commission of the Department of Finance of the Province of Nova Scotia, as a vendor from whom Indians on the reserve may buy manufactured tobacco on which tax under Part III of the Revenue Act, S.N.S. 1995-96, c. 17, is not payable;

"designated wholesale vendor" « vendeur en gros désigné »

"designated wholesale vendor" means a wholesale vendor who has a wholesale vendor's permit under Part III of the Revenue Act, S.N.S. 1995-96, c. 17, for the sale of black stock to designated retail vendors;

"reserve" « réserve »

"reserve" means a reserve as defined in subsection 2(1) of the Indian Act.

Offence of unauthorized sale of cigarettes intended for Indian reserve

(2) Every person who sells or offers for sale black stock cigarettes in respect of which excise tax was imposed under section 23 at a rate provided for under paragraph 1(c) of Schedule II, because of the application of subparagraph 1(c)(ii) of that Schedule, to a person other than a designated wholesale vendor, a designated retail vendor or an Indian consumer on a reserve in Nova Scotia is guilty of an offence and liable on summary conviction to a fine of not less than $1,000 and not more than the greater of $1,000 and triple the amount by which

(a) the excise tax that would be imposed under section 23 in respect of the cigarettes if the applicable rate of excise tax were the rate set out in paragraph 1(f) of Schedule II

exceeds

(b) the excise tax that was imposed under section 23 in respect of the cigarettes.

1994, c. 29, s. 10; 1997, c. 26, s. 73; 2000, c. 30, s. 140.

Books and records

98. (1) Every person who

(a) is required, by or pursuant to this Act, to pay or collect taxes or other sums or to affix or cancel stamps, or

(b) makes an application under any of sections 68 to 70,

shall keep records and books of account in English or French at that person's place of business in Canada in such form and containing such information as will enable the amount of taxes or other sums that should have been paid or collected, the amount of stamps that should have been affixed or cancelled or the amount, if any, of any drawback, payment or deduction that has been made or that may be made to or by that person, to be determined.

Keeping of records and books of account

(2) Every person required by subsection (1) to keep records and books of account shall retain those records and books of account and every account and voucher necessary to verify the information contained therein until the expiration of six years from the end of the calendar year in respect of which those records and books of account are kept or until written permission for their prior disposal is given by the Minister.

Electronic records

(2.01) Every person required by this section to keep records who does so electronically shall retain them in an electronically readable format for the retention period set out in subsection (2).

Exemption

(2.02) The Minister may, on such terms and conditions as are acceptable to the Minister, exempt a person or a class of persons from the requirement in subsection (2.01).

Idem

(2.1) Notwithstanding subsection (2), where a person required by subsection (1) to keep records and books of account serves a notice of objection under section 81.15 or 81.17 or is a party to an appeal under this Part, he shall retain those records and books of account and every account and voucher necessary to verify the information therein until the objection or appeal has been finally disposed of by appeal or otherwise.

Inspection

(3) Every person required by subsection (1) to keep records and books of account shall, at all reasonable times, make the records and books of account and every account and voucher necessary to verify the information therein available to officers of the Agency and other persons thereunto authorized by the Minister and give them every facility necessary to inspect the records, books, accounts and vouchers.

R.S., 1985, c. E-15, s. 98; R.S., 1985, c. 15 (1st Supp.), s. 36, c. 7 (2nd Supp.), s. 45; 1998, c. 19, s. 278; 1999, c. 17, s. 156.

Inspection

98.1 Every person who is authorized under a statute of the Province of Ontario, Quebec, Nova Scotia, New Brunswick or Prince Edward Island to sell manufactured tobacco in the province to a purchaser who is authorized under a statute of the province to retail manufactured tobacco in the province shall, at all reasonable times, make the person's records and books of account and the records and vouchers necessary to verify the information in them available to officers of the Agency, and to other persons authorized by the Minister for the purpose of this section, for any purpose relating to the administration or enforcement of this Act and give them every facility necessary to inspect the records, books, accounts and vouchers for that purpose.

1994, c. 29, s. 11; 1999, c. 17, s. 156.

Inspection

98.2 Every person who has sold tax-paid manufactured tobacco (as defined in subsection 68.162(1)) or tax-paid cigarettes (as defined in subsection 68.163(1) or 68.164(1)) to a purchaser for resale shall, at all reasonable times, make the person's records and books of account and the records and vouchers necessary to verify the information in them available to officers of the Agency, and to other persons authorized by the Minister for the purpose of this section, for the purpose of verifying an application by the purchaser under subsection 68.162(3), 68.163(3) or 68.164(3) and give them every facility necessary to inspect the records, books, accounts and vouchers for that purpose.

1994, c. 29, s. 11; 1999, c. 17, s. 156.

Provision of documents may be required

99. (1) Subject to section 102.1, the Minister may, for any purpose related to the administration or enforcement of this Act, by a notice served personally or by registered or certified mail, require that any person provide any book, record, writing or other document or any information or further information within such reasonable time as may be stipulated in the notice.

Offence

(2) Every person who fails to comply with a notice under subsection (1) is guilty of an offence and, in addition to any penalty otherwise provided, liable on summary conviction to

(a) a fine of not less than two hundred dollars and not more than ten thousand dollars; or

(b) both a fine described in paragraph (a) and imprisonment for a term not exceeding six months.

R.S., 1985, c. E-15, s. 99; R.S., 1985, c. 15 (1st Supp.), s. 37, c. 7 (2nd Supp.), s. 46.

Order for compliance

100. (1) Where a person is found guilty of an offence under subsection 99(2) for failing to comply with a notice, the court may make such order as it deems appropriate to enforce compliance with the notice.

Copies

(1.1) Where any record or other document is inspected or provided under sections 98 and 99, the person by whom it is inspected, or to whom it is provided or any officer of the Agency may make, or cause to be made, one or more copies thereof and, in the case of an electronic document, make or cause to be made a print-out of the electronic document, and any document purporting to be certified by the Minister or an authorized person to be a copy of the document, or to be a print-out of an electronic document, made under this section is evidence of the nature and content of the original document and has the same probative force as the original document would have if it were proven in the ordinary way.

Where records or books not adequate

(2) Where a person required by subsection 98(1) to keep records or books of account has not, in the opinion of the Minister, kept adequate records or books of account, the Minister may prescribe the form of, and the information to be contained in, records or books of account to be kept by that person under that subsection.

Where records or books not kept as required

(3) Where the form of, or the information to be contained in, records or books of account to be kept by a person has been prescribed under subsection (2), and where that person fails to keep those records or books of account as required, that person is guilty of an offence and liable on summary conviction to a fine of not less than twenty-five dollars and not more than one thousand dollars and in default of payment of the fine to a term of imprisonment of not less than two months and not more than twelve months.

Failure to make records and books available

(4) Every person who fails to comply with subsection 98(3) and every person who in any way prevents or attempts to prevent an officer of the Agency or an authorized person from having access to, or from inspecting, records or books of account kept pursuant to subsection 98(1) is guilty of an offence and liable on summary conviction to a fine of not less than two hundred dollars and not more than two thousand dollars or to imprisonment for a term of not more than six months or to both fine and imprisonment.

Failure to make records and books available

(5) Every person who fails to comply with section 98.1 or 98.2 is guilty of an offence and liable on summary conviction to a fine of not less than $200 and not more than $2,000 or to imprisonment for a term of not more than 6 months or to both fine and imprisonment.

R.S., 1985, c. E-15, s. 100; R.S., 1985, c. 7 (2nd Supp.), s. 47; 1994, c. 29, s. 12; 1998, c. 19, s. 279; 1999, c. 17, s. 156.

101. [Repealed, R.S., 1985, c. 7 (2nd Supp.), s. 48]

Destroying records and making false entries

102. Every person who

(a) destroys, alters or mutilates records or books of account kept in respect of any period pursuant to subsection 98(1) to evade paying a tax or otherwise to evade compliance with this Act or to assist any other person to evade paying a tax or otherwise to evade compliance with this Act, or

(b) makes, assents to or acquiesces in the making of, false or deceptive entries or omits, assents to or acquiesces in the omission, to enter a material particular in books or records of account required to be kept in respect of any period by subsection 98(1),

is guilty of an offence and liable on summary conviction to a fine of

(c) not less than the aggregate of one hundred dollars and an amount equal to double the amount of the taxes that should have been paid or collected or the amount of stamps that should have been affixed or cancelled, as the case may be, in respect of that period, and

(d) not more than the aggregate of one thousand dollars and an amount equal to double the amount of the taxes or stamps referred to in paragraph (c),

and in default of payment of the fine, to imprisonment for a term of not less than three months and not more than twelve months.

R.S., c. E-13, s. 57.

Unnamed persons

102.1 (1) The Minister shall not serve a notice under subsection 99(1) with respect to an unnamed person or a group of unnamed persons unless the Minister has been authorized to do so under subsection (2).

Authorization order

(2) On an ex parte application by the Minister, a judge may, subject to such conditions as the judge considers appropriate, authorize the Minister to serve a notice under subsection 99(1) with respect to an unnamed person or a group of unnamed persons if the judge is satisfied by information on oath that

(a) the person or group is ascertainable; and

(b) the notice would be served in order to verify compliance by the person or group with any duty or obligation of that person or of persons in that group under this Act.

(c) and (d) [Repealed, 1996, c. 21, s. 63]

Reference to authorization

(3) Where authorization to serve a notice is granted under subsection (2), the notice shall refer to the authorization and the conditions, if any, imposed by the judge in connection therewith.

Review of authorization

(4) Where authorization to serve a notice is granted under subsection (2), any person on whom the notice is served may, within fifteen days after being served with the notice, apply to the judge who granted the authorization or, where that judge is unable to act, to another judge of the same court, for a review of the authorization.

Powers on review

(5) A judge to whom an application is made under subsection (4) may

(a) cancel the authorization if the judge is not satisfied that the conditions referred to in paragraphs (2)(a) and (b) have been met; or

(b) confirm or vary the authorization if the judge is satisfied that those conditions have been met.

Definition of "judge"

(6) In this section, "judge" means a judge of a superior court having jurisdiction in the province where the matter arises or a judge of the Federal Court.

R.S., 1985, c. 7 (2nd Supp.), s. 49; 1996, c. 21, s. 63.

Application of Customs Act

103. Where a tax is payable under this Act on the importation of any goods into Canada, the Customs Act is applicable in the same way and to the same extent as if that tax were payable under the Customs Tariff.

R.S., 1985, c. E-15, s. 103; R.S., 1985, c. 1 (2nd Supp.), s. 196.

Service

Service

104. (1) Except as otherwise provided in this Act, where a notice or other document is required or authorized by this Act to be sent to a person, other than the Minister or the Commissioner or the Tribunal, the notice or document shall be sent to that person by prepaid mail addressed to him at his latest known address or by being served personally on that person.

Presumption

(2) Where a person referred to in subsection (1) carries on business under a name or style other than his own name, the notice or document may be addressed to the name or style under which that person carries on business and, in the case of personal service, is deemed to have been validly served if it has been left with an adult person employed at the place of business of the addressee.

Idem

(3) Where a person referred to in subsection (1) carries on business in partnership, the notice or document may be addressed to the name of the partnership and, in the case of personal service, is deemed to have been validly served if it has been served on one of the partners or left with an adult person employed at the place of business of the partnership.

R.S., 1985, c. E-15, s. 104; R.S., 1985, c. 15 (1st Supp.), s. 39, c. 7 (2nd Supp.), s. 50, c. 47 (4th Supp.), s. 52; 1999, c. 17, s. 155.

Evidence

Proof of service by registered or certified mail

105. (1) Where a notice or other document under this Act or the regulations is sent by registered or certified mail, an affidavit of an officer of the Agency, sworn before a commissioner or other person authorized to take affidavits, setting out

(a) that the officer has knowledge of the facts in the particular case,

(b) that such a notice or document was sent by registered or certified mail on a named day to the person to whom it was addressed, indicating such address, and

(c) that the officer identifies as exhibits annexed to the affidavit the postal certificate of registration or proof of delivery, as the case may be, of the notice or document or a true copy of the relevant portion thereof and a true copy of the notice or document,

is evidence of the sending and of the notice or document.

Proof of personal service

(2) Where a notice or other document under this Act or the regulations is served personally, an affidavit of an officer of the Agency, sworn before a commissioner or other person authorized to take affidavits, setting out

(a) that the officer has knowledge of the facts in the particular case,

(b) that such a notice or document was served personally on a named day on the person to whom it was directed, and

(c) that the officer identifies as an exhibit annexed to the affidavit a true copy of the notice or document,

is evidence of the personal service and of the notice or document.

Proof of failure to comply

(3) Where a person is required by this Act or the regulations to file a return or report or to pay any tax, interest, penalty or other sum, an affidavit of an officer of the Agency, sworn before a commissioner or other person authorized to take affidavits, setting out

(a) that the officer has charge of the appropriate records, and

(b) that after careful examination of the records the officer was unable to find in the particular case the return or report or the payment, as the case may be,

is evidence that, in such case, that person did not file the return or report or pay the tax, interest, penalty or other sum.

Proof of time of compliance

(4) Where a person is required or authorized by this Act or the regulations to file an application, notice, return or report or to pay any tax, interest, penalty or other sum, an affidavit of an officer of the Agency, sworn before a commissioner or other person authorized to take affidavits, setting out

(a) that the officer has charge of the appropriate records, and

(b) that after careful examination of the records the officer has found that the application, notice, return or report was filed on a particular day or the payment was received on a particular day, as the case may be,

is evidence that the application, notice, return or report was filed, or the payment was received, on that day and not prior thereto.

Proof of documents

(5) An affidavit of an officer of the Agency, sworn before a commissioner or other person authorized to take affidavits, setting out

(a) that the officer has charge of the appropriate records, and

(b) that a document annexed to the affidavit is a document or true copy of a document, or a print-out of an electronic document, made by or on behalf of the Minister or a person exercising the powers of the Minister or by or on behalf of a person,

is evidence of the nature and contents of the document.

Proof of no objection

(6) An affidavit of an officer of the Agency, sworn before a commissioner or other person authorized to take affidavits, setting out

(a) that the officer has charge of the appropriate records,

(b) that the officer has knowledge of the practice of the Agency,

(c) that an examination of the records shows that a notice of determination or a notice of assessment was sent to a person on a named day pursuant to this Act, and

(d) that after careful examination of the records the officer was unable to find that a notice of objection to the determination or assessment was received within the time limited therefor,

is evidence of the statements contained therein.

Proof of no assignment

(7) An affidavit of an officer of the Agency, sworn before a commissioner or other person authorized to take affidavits, setting out

(a) that the officer has charge of the appropriate records, and

(b) that after careful examination of the records the officer was unable to find that a notice of assignment of the right to institute proceedings under this Act was received within the time limited therefor,

is evidence of the statements contained therein.

Proof of licence

(8) An affidavit of an officer of the Agency, sworn before a commissioner or other person authorized to take affidavits, setting out

(a) that the officer has charge of the appropriate records, and

(b) that after careful examination of the records the officer has found that during a stated period a person was the holder of a licence granted under this Act,

is evidence of the statements contained therein.

Presumption

(9) Where evidence is offered under this section by an affidavit from which it appears that the person making the affidavit is an officer of the Agency, it is not necessary to prove his signature or that the person is such an officer nor is it necessary to prove the signature or official character of the person before whom the affidavit was sworn.

R.S., 1985, c. E-15, s. 105; R.S., 1985, c. 7 (2nd Supp.), s. 50; 1998, c. 19, s. 280; 1999, c. 17, s. 156.

Evidence of filing

106. (1) In any proceedings under or in respect of this Act or the regulations, the production of a return, report, certificate, statement or answer required by or under this Act or the regulations, purporting to have been made, signed or filed by or on behalf of a person, is, in the absence of evidence to the contrary, proof that the return, report, certificate, statement or answer was made, signed or filed by or on behalf of that person.

Evidence of document

(2) In any proceedings under or in respect of this Act or the regulations,

(a) a document purporting to be, or purporting to be a copy of or an extract from, a record, book, account, voucher, writing, document or thing inspected, provided or produced pursuant to section 98, 99 or 107 and purporting to be certified by the person by whom it was inspected or to whom it was provided or produced or by an officer of the Agency, and

(b) a document purporting to be certified by an officer of the Agency and setting out the amount of any tax, interest, penalty or other sum paid or payable by any named person or the amount of any payment under this Act paid or payable to any named person

is evidence of the facts appearing in the document without proof of the signature or official character of the person appearing to have signed the certificate.

R.S., 1985, c. E-15, s. 106; R.S., 1985, c. 7 (2nd Supp.), s. 50; 1999, c. 17, s. 156.

Presumption

106.1 (1) Every document purporting to be an order, direction, notice, certificate, requirement, decision, determination, assessment, discharge of mortgage or other document and purporting to have been executed under, or in the course of the administration or enforcement of, this Act or the regulations over the name in writing of the Minister, the Deputy Minister of National Revenue, the Commissioner or an officer authorized by the Minister to exercise his powers or perform his duties or functions under this Act shall be deemed to be a document signed, made and issued by the Minister, Deputy Minister, Commissioner or officer, unless called into question by the Minister or by some person acting for him or Her Majesty.

Idem

(2) For the purposes of this Act, a notice referred to in subsection 72(6), 81.13(1), 81.15(5) or 81.17(5) that is sent by mail shall, in the absence of any evidence to the contrary, be deemed to have been sent on the day appearing from the notice to be the date thereof, unless called into question by the Minister or by some person acting for him or Her Majesty.

Idem

(3) Where a notice referred to in subsection 72(6), 81.13(1), 81.15(5) or 81.17(5) is sent by the Minister as required by this Act, the determination, assessment or decision to which the notice relates shall be deemed to have been made on the day on which the notice is sent.

Idem

(4) Every form purporting to be a form prescribed by the Minister under this Act shall be deemed to be a form prescribed by the Minister under this Act, unless called into question by the Minister or by some person acting for him or Her Majesty.

R.S., 1985, c. 7 (2nd Supp.), s. 50; 1999, c. 17, s. 151.

Inquiries

107. (1) Any person designated by the Minister may conduct any inquiry or investigation in matters relating to this Act, and any person so authorized has all the powers and authority of a commissioner appointed under Part I of the Inquiries Act.

Summoning witnesses

(2) A person designated to conduct an inquiry or investigation under subsection (1) may, for the purpose thereof, issue a summons to any person in any part of Canada requiring him to appear at the time and place mentioned therein, to testify to all matters within his knowledge relating to the subject-matter of the inquiry or investigation and to bring with him and produce any document, book or paper that he has in his possession or under his control relating to the subject-matter of the inquiry or investigation.

Travel expenses

(3) Reasonable travel expenses shall be paid to any person summoned under subsection (2) at the time of the service of the summons.

Punishment

(4) Every person who

(a) fails, without valid excuse, to attend an inquiry or investigation as required under this section,

(b) fails to produce any document, book or paper in his possession or under his control, as required under this section, or

(c) at any inquiry or investigation under this section

(i) refuses to be sworn, to affirm or to declare, as the case may be, or

(ii) refuses to answer any proper question put to him by the person conducting the inquiry or investigation,

is guilty of an offence and liable on summary conviction to a fine of not less than twenty dollars and not more than four hundred dollars.

R.S., c. E-13, s. 61.

Offence of evasion

108. Every one who wilfully attempts in any manner to evade or defeat any tax imposed by this Act is guilty of an offence and liable on summary conviction to a fine not exceeding twelve thousand dollars or to imprisonment for a term not exceeding twelve months or to both.

R.S., c. E-13, s. 62; 1980-81-82-83, c. 68, s. 25.

Penalty for collecting excess sums

109. Every one liable under this Act to pay to Her Majesty any of the taxes imposed by this Act, or to collect the taxes on Her Majesty's behalf, who collects, under colour of this Act, any sum of money in excess of such sum as he is hereby required to pay to Her Majesty shall pay to Her Majesty all moneys so collected and shall in addition be liable to a penalty not exceeding five hundred dollars.

R.S., c. E-13, s. 63.

Time limited for prosecution

110. An information or complaint under the provisions of the Criminal Code relating to summary convictions, in respect of an offence under this Act, may be laid or made on or before a day three years from the time when the matter or the information or complaint arose or within one year from the day on which evidence, sufficient in the opinion of the Minister to justify a prosecution for the offence, came to his knowledge, and the Minister's certificate as to the day on which the evidence came to his knowledge is conclusive evidence thereof.

R.S., c. E-13, s. 64.

Action against officers

111. (1) No writ shall be issued against, nor any process served on, any officer for any thing done or purporting to be done in the exercise of his duty as an officer until one month after notice in writing has been served on him, in which notice shall be clearly and explicitly stated the cause of action, the name and place of residence of the person who intends to bring action and the name of his attorney, solicitor or agent.

Evidence

(2) No evidence of any cause of action shall be produced except of such cause of action as is contained in the notice, and no verdict or judgment shall be given for the plaintiff, unless he proves on the trial that the notice was given, in default of which proof the defendant is entitled to a verdict or judgment and costs.

R.S., c. E-13, s. 65.

Time and place of action

112. (1) Every action referred to in subsection 111(1) shall be brought within three months after the cause thereof arose and shall be laid and tried in the place or district where the acts complained of were committed.

Defendant's plea

(2) The defendant in an action may plead the general issue and give the special matter in evidence.

Costs

(3) If the plaintiff in an action is non-suited or discontinues the action, or if, on demurrer or otherwise, judgment is given against the plaintiff, the defendant may recover costs and have such remedy for the costs as any defendant has in other cases where costs are given.

R.S., c. E-13, s. 66.

Officer may tender amends

113. Any officer or person against whom any action is brought under this Act on account of anything done, or purporting to be done, under the authority of this Act may, within one month after the notice referred to in subsection 111(1) has been served, tender amends to the person complaining or his agent and plead the tender in bar or answer to the action, together with other pleas or defences, and if the court or jury, as the case may be, finds the amends sufficient, a judgment or verdict shall be given for the defendant, and in that case, or if the plaintiff is non-suited or discontinues his action, or judgment is given for the defendant on demurrer or otherwise, the defendant is entitled to the like costs as he would have been entitled to in case he had pleaded the general issue only, but the defendant may, by leave of the court in which the action is brought, at any time before issue is joined, pay money into court as in other actions.

R.S., c. E-13, s. 67.

If defendants acted on probable cause

114. If, in any action under this Act, the court or judge before whom the action is tried certifies that the defendant or defendants in the action acted on probable cause, the plaintiff in the action is not entitled to more than twenty cents damages or to any costs of suit.

R.S., c. E-13, s. 68.

Punishment

115. (1) Notwithstanding any other statute or law, the court in any prosecution, suit or proceeding under this Act has no power to impose less than the minimum punishment prescribed by this Act and the court has no power to suspend sentence.

Information

(2) An information or complaint in respect of a contravention of this Act may be for one or more offences and no information, complaint, warrant, conviction or other proceeding in respect of an offence or offences is objectionable or insufficient on the ground that it relates to two or more offences.

R.S., c. E-13, s. 69.

Incorrect statements as to use

116. (1) Where a purchaser of goods from a wholesaler, producer, manufacturer or importer has incorrectly stated or certified that the goods were intended for a use rendering them exempt from tax under any provision of this Act, the wholesaler, producer, manufacturer or importer, as the case may be, is entitled to recover from the purchaser the taxes paid by him under this Act in respect of those goods.

Idem

(2) Where a purchaser of transportation by air from an air carrier has incorrectly stated or certified that the transportation by air was intended for a use rendering the transportation exempt from tax under Part II, the air carrier is entitled to recover from the purchaser the taxes paid by the air carrier under that Part in respect of that transportation by air.

Idem

(3) Where a person who acquires a taxable service from a licensee under Part II.1 or II.2 has incorrectly stated or certified that the service was intended for a use rendering the service exempt from tax under that Part, the licensee is entitled to recover from that person the taxes paid or remitted by the licensee under that Part in respect of the amount charged for the service.

Liability where purchaser's statement or certificate incorrect

(4) Where a manufacturer or wholesaler holding a licence granted under or in respect of Part III or VI has purchased goods from another such licensed manufacturer or licensed wholesaler and has incorrectly stated or certified that the goods were being purchased for a use or under conditions rendering the sale of the goods exempt from any tax imposed by Part III or VI,

(a) the purchaser and not the manufacturer or wholesaler from whom the goods were purchased is liable to pay the tax and any penalty or interest under subsection 79(1), if

(i) the statement or certificate is in writing, and

(ii) the manufacturer or wholesaler from whom the goods were purchased establishes that he acted with due care and diligence in relying on the statement or certificate of the purchaser; and

(b) in any other case, the purchaser and the manufacturer or wholesaler from whom the goods were purchased are jointly and severally liable to pay the tax and any penalty or interest under subsection 79(1).

R.S., 1985, c. E-15, s. 116; R.S., 1985, c. 15 (1st Supp.), s. 40, c. 7 (2nd Supp.), s. 51, c. 12 (4th Supp.), s. 37.

PART VIII
TRANSITIONAL

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).

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.

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.

1990, c. 45, s. 12.

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.

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.

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.

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.

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.

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.

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.

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.

1990, c. 45, s. 12; 1993, c. 27, s. 5.

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.

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.

1990, c. 45, s. 12.

Sales Tax Inventory Rebate

Definitions

120. (1) In this section,

"capital property" «immobilisation»

"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;

"commercial activity" « activité commerciale »

"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;

"inventory" «inventaire»

"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;

"sales tax" «taxe de vente»

"sales tax" means the consumption or sales tax imposed under Part VI;

"tax-paid goods" «marchandises libérées de taxe»

"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.

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.

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.

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.

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.

Definitions

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

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.

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.

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.

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.

Limitation

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

1990, c. 45, s. 12; 1993, c. 27, s. 6; 1999, c. 31, s. 233(F).

New Housing Rebate

Definitions

121. (1) In this section,

"estimated federal sales tax" « taxe de vente fédérale estimative »

"estimated federal sales tax" for a residential complex means the prescribed amount in respect of the complex;

"specified residential complex" «immeuble d'habitation déterminé»

"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;

"specified single unit residential complex" « immeuble d'habitation à logement unique déterminé »

"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.

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.

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.

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.

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.

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.

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.

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.

1990, c. 45, s. 12; 1993, c. 27, s. 7; 1994, c. 9, s. 1.

Application of anti-avoidance rule

121.1 Section 274 applies to this Part with such modifications as the circumstances require, and for that purpose every reference in that section to "an assessment, a reassessment or an additional assessment" shall be read as a reference to "an assessment, a reassessment, an additional assessment, a determination or a redetermination".

1993, c. 27, s. 8.

PART IX
GOODS AND SERVICES TAX

Application

122. This Part is binding

(a) on Her Majesty in right of Canada; and

(b) on Her Majesty in right of a province in respect of obligations as a supplier to collect and to remit tax in respect of taxable supplies made by Her Majesty in right of the province.

(c) [Repealed, 1993, c. 27, s. 9]

1990, c. 45, s. 12; 1993, c. 27, s. 9.

DIVISION I
INTERPRETATION

Definitions

123. (1) In section 121, this Part and Schedules V to X,

"admission" «droit d'entrée»

"admission", in respect of a place of amusement or a seminar, an activity or an event, means a right of entry or access to, or attendance at, the place of amusement or the seminar, activity or event;

"Agency" « Agence »

"Agency" means the Canada Customs and Revenue Agency established by subsection 4(1) of the Canada Customs and Revenue Agency Act;

"amount" «montant»

"amount" means money, property or a service, expressed in terms of the amount of money or the value in terms of money of the property or service;

"assessment" «cotisation»

"assessment" means an assessment under this Part and includes a reassessment under this Part;

"bank" « banque »

"bank" means a bank or an authorized foreign bank within the meaning of section 2 of the Bank Act;

"basic tax content" « teneur en taxe »

"basic tax content", at a particular time, of property of a person means

(a) except where paragraph (b) applies, the amount determined by the formula

(A - B) x C

where

A is the total of

(i) the tax that was payable by the person in respect of the last acquisition or importation of the property by the person,

(ii) the tax that was payable by the person in respect of improvements to the property acquired, imported or brought into a participating province by the person after the property was last acquired or imported by the person,

(iii) the tax under section 165 that would have been payable by the person, in respect of the last acquisition of the property by the person or in respect of improvements to the property acquired by the person after the property was last acquired or imported by the person, but for subsection 153(4), section 167 or the fact that the property or improvements were acquired by the person for consumption, use or supply exclusively in commercial activities,

(iv) the tax under any of sections 218 and 218.1 and Division IV.1 that would have become payable by the person in respect of the last acquisition or importation of the property by the person, and the tax thereunder that would have become payable by the person in respect of improvements to the property acquired, imported or brought into a participating province by the person after the property was last acquired or imported by the person, but for the fact that the person acquired or imported the property or improvement or brought the improvement into the participating province, as the case may be, for consumption, use or supply exclusively in the course of commercial activities of the person, and

(v) all amounts determined by the formula

D x E x F/G

where

D is an amount of tax (other than tax that the person was exempt from paying under any other Act or law) under subsection 165(1) or section 212 or 218 referred to in any of subparagraphs (i) to (iii) of the description of A that became payable, or would have become payable in the circumstances described in that subparagraph, by the person while the person was a selected listed financial institution,

E is the person's percentage for a participating province determined for the purposes of subsection 225.2(2) for the person's taxation year that includes the time that amount so became payable, or would have so become payable,

F is that province's tax rate, and

G is 7%,

B is the total of

(i) all tax referred to in subparagraphs (i) to (iv) of the description of A that the person was exempt from paying under any other Act or law,

(ii) all tax (other than tax referred to in subparagraph (i)) under subsection 165(2) and section 212.1 referred to in any of subparagraphs (i) to (iv) of the description of A that became payable by the person, or would have become payable by the person in the circumstances described in that subparagraph, while the person was a selected listed financial institution,

(iii) all amounts (other than input tax credits and amounts referred to in subparagraphs (i) and (ii)) in respect of tax referred to in subparagraphs (i) and (ii) of the description of A that the person was entitled to recover by way of rebate, refund, remission or otherwise under this or any other Act or law or would have been entitled to so recover if the property or improvement had been acquired for use exclusively in activities that are not commercial activities, and

(iv) all amounts (other than input tax credits and amounts referred to in subparagraphs (i) and (ii)) in respect of tax referred to in subparagraphs (iii) and (iv) of the description of A that the person would have been entitled to recover by way of rebate, refund, remission or otherwise under this or any other Act or law if that tax had been payable and the property or improvement had been acquired for use exclusively in activities that are not commercial activities, and

C is the lesser of 1 and the fraction

H/I

where

H is the fair market value of the property at the particular time, and

I is the total of

(i) the value of the consideration for the last supply to the person of the property or, where the property was last imported by the person, the value of the property determined under section 215, and

(ii) where the person acquired or imported improvements to the property after the property was last so acquired or imported, the total of all amounts each of which is the value of the consideration for a supply to the person of such an improvement or, where such an improvement is property that was imported or brought into a participating province by the person, the value of the property determined under section 215 or subsection 220.05(1), 220.06(1) or 220.07(3), as the case may require, and

(b) where the person brought the property into a participating province from a non-participating province for consumption, use or supply in the participating province in circumstances in which the person was required to pay tax in respect of the property under section 220.05, or would have been required to pay that tax but for the fact that the property was brought into that province for consumption, use or supply exclusively in commercial activities or the person was exempt from paying that tax under any other Act or law, the amount determined by the formula

(J - K) x L

where

J is the total of

(i) the basic tax content of the property, determined under paragraph (a), immediately before the property was brought into the province,

(ii) the tax that became payable by the person in respect of the property under section 220.05 when the property was brought into the participating province,

(iii) the tax that was payable by the person in respect of improvements to the property acquired, imported or brought into a participating province by the person after the property was brought into the participating province,

(iv) the tax under section 165 that would have been payable by the person, in respect of improvements to the property acquired by the person after the property was brought into the participating province, but for subsection 153(4), section 167 or the fact that the improvements were acquired by the person for consumption, use or supply exclusively in commercial activities,

(v) the tax under section 220.05 that would have become payable by the person in respect of the property, and the tax under any of sections 218 and 218.1 and Division IV.1 that would have become payable by the person in respect of improvements to the property acquired, imported or brought into a participating province by the person after the property was brought into the participating province, but for the fact that the person brought the property into the participating province, or acquired or imported the improvement or brought it into the province, as the case may be, for consumption, use or supply exclusively in the course of commercial activities of the person, and

(vi) all amounts determined by the formula

M x N x O/P

where

M is an amount of tax (other than tax that the person was exempt from paying under any other Act or law) under subsection 165(1) or section 212 or 218 referred to in subparagraph (iii) or (iv) of the description of J that became payable, or would have become payable in the circumstances described in that subparagraph, by the person after the property was brought into the participating province and while the person was a selected listed financial institution,

N is the person's percentage for a participating province determined for the purposes of subsection 225.2(2) for the person's taxation year that includes the time that amount so became payable, or would have so become payable,

O is that province's tax rate, and

P is 7%,

K is the total of

(i) all tax referred to in subparagraphs (ii) to (v) of the description of J that the person was exempt from paying under any other Act or law,

(ii) all tax (other than tax referred to in subparagraph (i)) under subsection 165(2) and section 212.1 referred to in any of subparagraphs (ii) to (v) of the description of J that became payable by the person, or would have become payable by the person in the circumstances described in that subparagraph, while the person was a selected listed financial institution,

(iii) all amounts (other than input tax credits and amounts referred to in subparagraphs (i) and (ii)) in respect of tax referred to in subparagraphs (ii) and (iii) of the description of J that the person was entitled to recover by way of rebate, refund, remission or otherwise under this or any other Act or law or would have been entitled to so recover if the property or improvement had been acquired for use exclusively in activities that are not commercial activities, and

(iv) all amounts (other than input tax credits and amounts referred to in subparagraphs (i) and (ii)) in respect of tax referred to in subparagraphs (iv) and (v) of the description of J that the person would have been entitled to recover by way of rebate, refund, remission or otherwise under this or any other Act or law if that tax had been payable and the property or improvement had been acquired for use exclusively in activities that are not commercial activities, and

L is lesser of 1 and the fraction

Q/R

where

Q is the fair market value of the property at the particular time, and

R is the total of

(i) the value of the property determined under subsection 220.05(1), 220.06(1) or 220.07(3), as the case may require, at the time the property was brought into the participating province, and

(ii) where the person acquired or imported improvements to the property after the property was brought into the participating province, the total of all amounts each of which is the value of the consideration for a supply to the person of such an improvement or, where such an improvement is property that was imported or brought into a participating province by the person, the value of the improvement determined under section 215 or subsection 220.05(1), 220.06(1) or 220.07(3), as the case may require;

"builder" «constructeur»

"builder" of a residential complex or of an addition to a multiple unit residential complex means a person who

(a) at a time when the person has an interest in the real property on which the complex is situated, carries on or engages another person to carry on for the person

(i) in the case of an addition to a multiple unit residential complex, the construction of the addition to the multiple unit residential complex,

(ii) in the case of a residential condominium unit, the construction of the condominium complex in which the unit is situated, and

(iii) in any other case, the construction or substantial renovation of the complex,

(b) acquires an interest in the complex at a time when

(i) in the case of an addition to a multiple unit residential complex, the addition is under construction, and

(ii) in any other case, the complex is under construction or substantial renovation,

(c) in the case of a mobile home or floating home, makes a supply of the home before the home has been used or occupied by any individual as a place of residence,

(d) acquires an interest in the complex

(i) in the case of a condominium complex or residential condominium unit, at a time when the complex is not registered as a condominium, or

(ii) in any case, before it has been occupied by an individual as a place of residence or lodging,

for the primary purpose of

(iii) making one or more supplies of the complex or parts thereof or interests therein by way of sale, or

(iv) making one or more supplies of the complex or parts thereof by way of lease, licence or similar arrangement to persons other than to individuals who are acquiring the complex or parts otherwise than in the course of a business or an adventure or concern in the nature of trade, or

(e) in any case, is deemed under subsection 190(1) to be a builder of the complex,

but does not include

(f) an individual described in paragraph (a), (b) or (d) who

(i) carries on the construction or substantial renovation,

(ii) engages another person to carry on the construction or substantial renovation for the individual, or

(iii) acquires the complex or interest in it,

otherwise than in the course of a business or an adventure or concern in the nature of trade,

(g) an individual described in paragraph (c) who makes a supply of the mobile home or floating home otherwise than in the course of a business or an adventure or concern in the nature of trade, or

(h) a person described in any of paragraphs (a) to (c) whose only interest in the complex is a right to purchase the complex or an interest in it from a builder of the complex;

"business" «entreprise»

"business" includes a profession, calling, trade, manufacture or undertaking of any kind whatever, whether the activity or undertaking is engaged in for profit, and any activity engaged in on a regular or continuous basis that involves the supply of property by way of lease, licence or similar arrangement, but does not include an office or employment;

"calendar quarter" «trimestre civil»

"calendar quarter" means a period of three months beginning on the first day of January, April, July or October in each calendar year;

"capital property" « immobilisation »

"capital property", in respect of a person, means property that is, or 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, 14 or 44 of Schedule II to the Income Tax Regulations;

"carrier" « transporteur »

"carrier" means a person who supplies a freight transportation service within the meaning assigned by subsection 1(1) of Part VII of Schedule VI;

"charity" « organisme de bienfaisance »

"charity" means a registered charity or registered Canadian amateur athletic association within the meaning assigned to those expressions by subsection 248(1) of the Income Tax Act, but does not include a public institution;

"closely related group" «groupe étroitement lié»

"closely related group" means a group of corporations each member of which is closely related, within the meaning assigned by section 128, to each other member of the group;

"commercial activity" « activité commerciale »

"commercial activity" of a person means

(a) a business carried on by the person (other than a business carried on without a reasonable expectation of profit by an individual, a personal trust or a partnership, all of the members of which are individuals), except to the extent to which the business involves the making of exempt supplies by the person,

(b) an adventure or concern of the person in the nature of trade (other than an adventure or concern engaged in without a reasonable expectation of profit by an individual, a personal trust or a partnership, all of the members of which are individuals), except to the extent to which the adventure or concern involves the making of exempt supplies by the person, and

(c) the making of a supply (other than an exempt supply) by the person of real property of the person, including anything done by the person in the course of or in connection with the making of the supply;

"commercial service" « service commercial »

"commercial service", in respect of tangible personal property, means any service in respect of the property other than

(a) a service of shipping the property supplied by a carrier, and

(b) a financial service;

"Commissioner" « commissaire »

"Commissioner" means the Commissioner of Customs and Revenue, appointed under section 25 of the Canada Customs and Revenue Agency Act;

"common-law partner" « conjoint de fait »

"common-law partner" of an individual at any time means a person who is the common-law partner of the individual at that time for the purposes of the Income Tax Act;

"condominium complex" «immeuble d'habitation en copropriété»

"condominium complex" means a residential complex that contains more than one residential condominium unit;

"consideration" « contrepartie »

"consideration" includes any amount that is payable for a supply by operation of law;

"consideration fraction" [Repealed, 1997, c. 10, s. 150]

"consumer" «consommateur»

"consumer" of property or a service means a particular individual who acquires or imports the property or service for the particular individual's personal consumption, use or enjoyment or the personal consumption, use or enjoyment of any other individual at the particular individual's expense, but does not include an individual who acquires or imports the property or service for consumption, use or supply in the course of commercial activities of the individual or other activities in the course of which the individual makes exempt supplies;

"continuous transmission commodity" « produit transporté en continu »

"continuous transmission commodity" means electricity, crude oil, natural gas, or any tangible personal property, that is transportable by means of a wire, pipeline or other conduit;

"convention" « congrès »

"convention" means a formal meeting or assembly that is not open to the general public, but does not include a meeting or assembly the principal purpose of which is

(a) to provide any type of amusement, entertainment or recreation,

(b) to conduct contests or games of chance, or

(c) to transact the business of the convenor or attendees

(i) in the course of a trade show that is open to the general public, or

(ii) otherwise than in the course of a trade show;

"convention facility" « centre de congrès »

"convention facility" means real property that is acquired by way of lease, licence or similar arrangement by the sponsor or organizer of a convention for use exclusively as the site for the convention;

"cooperative corporation" « coopérative »

"cooperative corporation" means a cooperative housing corporation and any other cooperative corporation within the meaning assigned by subsection 136(2) of the Income Tax Act;

"cooperative housing corporation" « coopérative d'habitation »

"cooperative housing corporation" means a corporation that was incorporated, by or under a law of Canada or a province providing for the establishment of the corporation or respecting the establishment of cooperative corporations, for the purpose of making supplies by way of lease, licence or similar arrangement of residential units to its members for the purpose of their occupancy as places of residence for individuals where

(a) the statute by or under which it was incorporated, its charter, articles of association or by-laws or its contracts with its members require that the activities of the corporation be engaged in at or near cost after providing for reasonable reserves and hold forth the prospect that surplus funds arising from those activities will be distributed among its members in proportion to patronage,

(b) none of its members (except other cooperative corporations) have more than one vote in the conduct of the affairs of the corporation, and

(c) at least 90% of its members are individuals or other cooperative corporations and at least 90% of its shares are held by such persons;

"courier" « messager »

"courier" has the meaning assigned by subsection 2(1) of the Customs Act;

"credit note" « note de crédit »

"credit note" means a credit note issued under subsection 232(3);

"credit union" «caisse de crédit»

"credit union" has the meaning assigned by subsection 137(6) of the Income Tax Act and includes a corporation described in subparagraph 137.1(5)(a)(i) of that Act;

"debit note" « note de débit »

"debit note" means a debit note issued under subsection 232(3);

"debt security" «titre de créance»

"debt security" means a right to be paid money and includes a deposit of money, but does not include a lease, licence or similar arrangement for the use of, or the right to use, property other than a financial instrument;

"Department" [Repealed, 1999, c. 17, s. 152]

"Deputy Minister" [Repealed, 1999, c. 17, s. 152]

"direct cost" « coût direct »

"direct cost" of a supply of tangible personal property or a service means the total of all amounts each of which is the consideration paid or payable by the supplier

(a) for the property or service if it was purchased by the supplier for the purpose of making a supply by way of sale of the property or service, or

(b) for an article or material (other than capital property of the supplier) that was purchased by the supplier, to the extent that the article or material is to be incorporated into or is to form a constituent or component part of the property, or is to be consumed or expended directly in the process of manufacturing, producing, processing or packaging the property

and, for the purposes of this definition, the consideration paid or payable by a supplier for property or a service is deemed to include

(c) tax under this Part payable by the supplier in respect of the acquisition or importation of the property or service by the supplier,

(d) if the property was brought into a participating province from a non-participating province, any tax under this Part payable by the supplier in respect of the bringing in of the property into the participating province, and

(e) any tax, duty or fee payable in respect of the acquisition or importation of the property or service by the supplier and prescribed for the purposes of section 154, excluding the portion of the tax (other than tax that became payable under the first paragraph of section 16 of An Act respecting the Québec sales tax, R.S.Q., c. T-0.1, by the supplier at a time when the supplier was a registrant as defined in section 1 of that Act), duty or fee that is recovered or recoverable by the supplier;

"document" «document»

"document" includes money, a security and a record;

"employee" « salarié »

"employee" includes an officer;

"employer" « employeur »

"employer", in relation to an officer, means the person from whom the officer receives remuneration;

"equity security" «titre de participation»

"equity security" means a share of the capital stock of a corporation or any interest in or right to such a share;

"excisable goods" «produit soumis à l'accise»

"excisable goods" means any goods on which a duty of excise is imposed under the Excise Act or would be imposed under that Act if the goods were manufactured or produced in Canada;

"exclusive" « exclusif »

"exclusive" means

(a) in respect of the consumption, use or supply of property or a service by a person that is not a financial institution, all or substantially all of the consumption, use or supply of the property or service, and

(b) in respect of the consumption, use or supply of property or a service by a financial institution, all of the consumption, use or supply of the property or service;

"exempt supply" «fourniture exonérée»

"exempt supply" means a supply included in Schedule V;

"export" «exportation»

"export" means export from Canada;

"fair market value" «juste valeur marchande»

"fair market value" of property or a service supplied to a person means the fair market value of the property or service without reference to any tax excluded by section 154 from the consideration for the supply;

"financial institution" «institution financière»

"financial institution", at any time, means a person who is at that time a financial institution under section 149;

"financial instrument" «effet financier»

"financial instrument" means

(a) a debt security,

(b) an equity security,

(c) an insurance policy,

(d) an interest in a partnership, a trust or the estate of a deceased individual, or any right in respect of such an interest,

(e) a precious metal,

(f) an option or a contract for the future supply of a commodity, where the option or contract is traded on a recognized commodity exchange,

(g) a prescribed instrument,

(h) a guarantee, an acceptance or an indemnity in respect of anything described in paragraph (a), (b), (d), (e) or (g), or

(i) an option or a contract for the future supply of money or anything described in any of paragraphs (a) to (h);

"financial service" «service financier»

"financial service" means

(a) the exchange, payment, issue, receipt or transfer of money, whether effected by the exchange of currency, by crediting or debiting accounts or otherwise,

(b) the operation or maintenance of a savings, chequing, deposit, loan, charge or other account,

(c) the lending or borrowing of a financial instrument,

(d) the issue, granting, allotment, acceptance, endorsement, renewal, processing, variation, transfer of ownership or repayment of a financial instrument,

(e) the provision, variation, release or receipt of a guarantee, an acceptance or an indemnity in respect of a financial instrument,

(f) the payment or receipt of money as dividends (other than patronage dividends), interest, principal, benefits or any similar payment or receipt of money in respect of a financial instrument,

(f.1) the payment or receipt of an amount in full or partial satisfaction of a claim arising under an insurance policy,

(g) the making of any advance, the granting of any credit or the lending of money,

(h) the underwriting of a financial instrument,

(i) any service provided pursuant to the terms and conditions of any agreement relating to payments of amounts for which a credit card voucher or charge card voucher has been issued,

(j) the service of investigating and recommending the compensation in satisfaction of a claim where

(i) the claim is made under a marine insurance policy, or

(ii) the claim is made under an insurance policy that is not in the nature of accident and sickness or life insurance and

(A) the service is supplied by an insurer or by a person who is licensed under the laws of a province to provide such a service, or

(B) the service is supplied to an insurer or a group of insurers by a person who would be required to be so licensed but for the fact that the person is relieved from that requirement under the laws of a province,

(j.1) the service of providing an insurer or a person who supplies a service referred to in paragraph (j) with an appraisal of the damage caused to property, or in the case of a loss of property, the value of the property, where the supplier of the appraisal inspects the property, or in the case of a loss of the property, the last-known place where the property was situated before the loss,

(k) any supply deemed by subsection 150(1) or section 158 to be a supply of a financial service,

(l) the agreeing to provide, or the arranging for, a service referred to in any of paragraphs (a) to (i), or

(m) a prescribed service,

but does not include

(n) the payment or receipt of money as consideration for the supply of property other than a financial instrument or of a service other than a financial service,

(o) the payment or receipt of money in settlement of a claim (other than a claim under an insurance policy) under a warranty, guarantee or similar arrangement in respect of property other than a financial instrument or a service other than a financial service,

(p) the service of providing advice, other than a service included in this definition because of paragraph (j) or (j.1),

(q) the provision, to an investment plan (as defined in subsection 149(5)) or any corporation, partnership or trust whose principal activity is the investing of funds, of

(i) a management or administrative service, or

(ii) any other service (other than a prescribed service),

if the supplier is a person who provides management or administrative services to the investment plan, corporation, partnership or trust,

(r) a professional service provided by an accountant, actuary, lawyer or notary in the course of a professional practice,

(r.1) the arranging for the transfer of ownership of shares of a cooperative housing corporation,

(s) any service the supply of which is deemed under this Part to be a taxable supply, or

(t) a prescribed service;

"fiscal month" «mois d'exercice»

"fiscal month" of a person means a period that is determined under section 243 to be the fiscal month of the person;

"fiscal quarter" «trimestre d'exercice»

"fiscal quarter" of a person means a period that is determined under section 243 to be the fiscal quarter of the person;

"fiscal year" «exercice»

"fiscal year" of a person means

(a) where the person has made an election under section 244 that is in effect, the period that the person elected to be the fiscal year of the person, and

(b) in all other cases, the taxation year of the person;

"floating home" « maison flottante »

"floating home" means a structure that is composed of a floating platform and a building designed to be occupied as a place of residence for individuals that is permanently affixed to the platform, but does not include any freestanding appliances or furniture sold with the structure or any structure that has means of, or is capable of being readily adapted for, self-propulsion;

"foreign convention" « congrès étranger »

"foreign convention" means a convention

(a) at least 75% of the admissions to which are, at the time the sponsor of the convention determines the amount to be charged as consideration therefor, reasonably expected to be supplied to non-resident persons, and

(b) the sponsor of which is an organization whose head office is situated outside Canada or, where the organization has no head office, the member, or majority of members, of which having management and control of the organization is or are non-resident;

"former spouse" [Repealed, 2000, c. 12, s. 111]

"game of chance" «jeu de hasard»

"game of chance" means a lottery or other scheme under which prizes or winnings are awarded by way of chance or by way of a mixture of chance and other factors where the result depends more on chance than on the other factors;

"goods" «produits»

"goods" has the same meaning as in the Customs Act;

"government" «gouvernement»

"government" means Her Majesty in right of Canada or a province;

"hospital authority" « administration hospitalière »

"hospital authority" means an organization that operates a public hospital and that is designated by the Minister as a hospital authority for the purposes of this Part;

"import" «importation»

"import" means import into Canada;

"improvement" « améliorations »

"improvement", in respect of property of a person, means any property or service supplied to, or goods imported by, the person for the purpose of improving the property, to the extent that the consideration paid or payable by the person for the property or service or the value of the goods is, or would be if the person were a taxpayer under the Income Tax Act, included in determining the cost or, in the case of property that is capital property of the person, the adjusted cost base to the person of the property for the purposes of that Act;

"individual" Version anglaise seulement

"individual" means a natural person;

"insurance policy" «police d'assurance»

"insurance policy" means

(a) a policy or contract of insurance (other than a warranty in respect of the quality, fitness or performance of tangible property, where the warranty is supplied to a person who acquires the property otherwise than for resale) that is issued by an insurer, including

(i) a policy of reinsurance issued by an insurer,

(ii) an annuity contract issued by an insurer, or a contract issued by an insurer that would be an annuity contract except that the payments under the contract

(A) are payable on a periodic basis at intervals that are longer or shorter than one year, or

(B) vary in amount depending on the value of a specified group of assets or on changes in interest rates, and

(iii) a contract issued by an insurer all or part of the insurer's reserves for which vary in amount depending on the value of a specified group of assets,

(b) a policy or contract in the nature of accident and sickness insurance, whether the policy is issued, or the contract is entered into, by an insurer, and

(c) a bid, performance, maintenance or payment bond issued in respect of a construction contract;

"insurer" «assureur»

"insurer" means a person who is licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada an insurance business or under the laws of another jurisdiction to carry on in that other jurisdiction an insurance business;

"inter vivos trust" Version anglaise seulement

"inter vivos trust" means a trust other than a testamentary trust;

"invoice" «facture»

"invoice" includes a statement of account, a bill and any other similar record, regardless of its form or characteristics, and a cash register slip or receipt;

"listed financial institution" «institution financière désignée»

"listed financial institution" means a person referred to in paragraph 149(1)(a);

"membership" « droit d'adhésion »

"membership" includes a right granted by a particular person that entitles another person to services that are provided by, or to the use of facilities that are operated by, the particular person and that are not available, or are not available to the same extent or for the same fee or charge, to persons to whom such a right has not been granted, and also includes such a right that is conditional on the acquisition or ownership of a share, bond, debenture or other security;

"mineral" « minéral »

"mineral" includes ammonite gemstone, bituminous sands, calcium chloride, coal, gravel, kaolin, oil shale, silica, sand and petroleum, natural gas and related hydrocarbons;

"Minister" «ministre»

"Minister" means the Minister of National Revenue;

"mobile home" « maison mobile »

"mobile home" means a building, the manufacture and assembly of which is completed or substantially completed, that is equipped with complete plumbing, electrical and heating facilities and that is designed to be moved to a site for installation on a foundation and connection to service facilities and to be occupied as a place of residence, but does not include any travel trailer, motor home, camping trailer or other vehicle or trailer designed for recreational use;

"money" «argent»

"money" includes any currency, cheque, promissory note, letter of credit, draft, traveller's cheque, bill of exchange, postal note, money order, postal remittance and other similar instrument, whether Canadian or foreign, but does not include currency the fair market value of which exceeds its stated value as legal tender in the country of issuance or currency that is supplied or held for its numismatic value;

"month" « mois »

"month" means a period beginning on a particular day in a calendar month and ending on

(a) the day immediately before the day in the next calendar month that has the same calendar number as the particular day, or

(b) where the next calendar month does not have a day that has the same calendar number as the particular day, the last day of that next calendar month;

"multiple unit residential complex" «immeuble d'habitation à logements multiples»

"multiple unit residential complex" means a residential complex that contains more than one residential unit, but does not include a condominium complex;

"municipality" «municipalité»

"municipality" means

(a) an incorporated city, town, village, metropolitan authority, township, district, county or rural municipality or other incorporated municipal body however designated, and

(b) such other local authority as the Minister may determine to be a municipality for the purposes of this Part;

"mutual insurance federation" « fédération de sociétés mutuelles d'assurance »

"mutual insurance federation" means a corporation each member of which is a mutual insurance corporation that is required, under an Act of the legislature of a province, to be a member of the corporation, but does not include a corporation the main purpose of which is

(a) related to automobile insurance,

(b) to provide compensation to insurance policy holders of, or claimants on, insolvent insurers, or

(c) to establish and manage a guarantee fund, cash reserve fund, mutual aid fund or similar fund for the benefit of its members and to provide financial assistance with regard to losses sustained on the winding-up or dissolution of its members;

"mutual insurance group" « regroupement de sociétés mutuelles d'assurance »

"mutual insurance group" means a group that consists of

(a) a mutual insurance federation and its members,

(b) where the members of the mutual insurance federation are the sole investors in an investment fund, that fund, and

(c) where there exists a mutual reinsurance corporation each member of which is a member of the mutual insurance federation and is not entitled to obtain reinsurance from any other reinsurance corporation, that mutual reinsurance corporation;

"Newfoundland offshore area" « zone extracôtière de Terre-Neuve »

"Newfoundland offshore area" means the offshore area as defined in section 2 of the Canada-Newfoundland Atlantic Accord Implementation Act;

"non-participating province" « province non participante »

"non-participating province" means

(a) a province that is not a participating province, or

(b) another area in Canada that is outside the participating provinces;

"non-profit organization" « organisme à but non lucratif »

"non-profit organization" means a person (other than an individual, an estate, a trust, a charity, a public institution, a municipality or a government) that was organized and is operated solely for a purpose other than profit, no part of the income of which is payable to, or otherwise available for the personal benefit of, any proprietor, member or shareholder thereof unless the proprietor, member or shareholder is a club, a society or an association the primary purpose and function of which is the promotion of amateur athletics in Canada;

"non-resident" «non résidant»

"non-resident" means not resident in Canada;

"Nova Scotia offshore area" « zone extracôtière de la Nouvelle-Écosse »

"Nova Scotia offshore area" means the offshore area as defined in section 2 of the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act;

"office" « charge »

"office" has the meaning assigned by subsection 248(1) of the Income Tax Act, but does not include

(a) the position of trustee in bankruptcy,

(b) the position of receiver (including the position of a receiver within the meaning assigned by subsection 266(1)), or

(c) the position of trustee of a trust or personal representative of a deceased individual where the person who acts in that capacity is entitled to an amount for doing so that is included in computing, for the purposes of that Act, the person's income or, where the person is an individual, the person's income from a business;

"officer" « cadre »

"officer" means a person who holds an office;

"offshore activity" « activité extracôtière »

"offshore activity" means

(a) when used in connection with an activity carried on in the Nova Scotia offshore area, an activity in respect of which tax would be imposed under section 212 of the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act if this Part were one of the Nova Scotia Consumption Tax Acts (as defined in section 211 of that Act); and

(b) when used in connection with an activity carried on in the Newfoundland offshore area, an activity in respect of which tax would be imposed under section 207 of the Canada-Newfoundland Atlantic Accord Implementation Act if this Part were one of the Newfoundland Consumption Tax Acts (as defined in section 206 of that Act);

"organizer" « organisateur »

"organizer" of a convention means a person who acquires the convention facility or related convention supplies and who organizes the convention for another person who is the sponsor of the convention;

"participating province" « province participante »

"participating province" means a province or area referred to in Schedule VIII, but does not include the Nova Scotia offshore area or the Newfoundland offshore area except to the extent that offshore activities are carried on in that area;

"passenger vehicle" «voiture de tourisme»

"passenger vehicle" has the meaning assigned by subsection 248(1) of the Income Tax Act;

"patronage dividend" «ristourne»

"patronage dividend" means an amount that is deductible under section 135 of the Income Tax Act in computing, for the purposes of that Act, the income of the person paying the amount;

"permanent establishment" «établissement stable»

"permanent establishment", in respect of a particular person, means

(a) a fixed place of business of the particular person, including

(i) a place of management, a branch, an office, a factory or a workshop, and

(ii) a mine, an oil or gas well, a quarry, timberland or any other place of extraction of natural resources,

through which the particular person makes supplies, or

(b) a fixed place of business of another person (other than a broker, general commission agent or other independent agent acting in the ordinary course of business) who is acting in Canada on behalf of the particular person and through whom the particular person makes supplies in the ordinary course of business;

"person" « personne »

"person" means an individual, a partnership, a corporation, the estate of a deceased individual, a trust, or a body that is a society, union, club, association, commission or other organization of any kind;

"personal property" «bien meuble»

"personal property" means property that is not real property;

"personal representative" « représentant personnel »

"personal representative", of a deceased individual or the estate of a deceased individual, means the executor of the individual's will, the administrator of the estate or any person who is responsible under the appropriate law for the proper collection, administration, disposition and distribution of the assets of the estate;

"personal trust" « fiducie personnelle »

"personal trust" means

(a) a testamentary trust, or

(b) an inter vivos trust that is a personal trust (within the meaning assigned by subsection 248(1) of the Income Tax Act) all the beneficiaries (other than contingent beneficiaries) of which are individuals and all the contingent beneficiaries of which, if any, are individuals, charities or public institutions;

"place of amusement" «lieu de divertissement»

"place of amusement" means any premises or place, whether or not enclosed, at or in any part of which is staged or held any

(a) film, slide show, sound and light or similar presentation,

(b) artistic, literary, theatrical, musical or other performance, entertainment or exhibition,

(c) fair, circus, menagerie, rodeo or similar event, or

(d) race, game of chance, athletic contest or other contest or game,

and includes a museum, historical site, zoo, wildlife or other park, place where bets are placed and any place, structure, apparatus, machine or device the purpose of which is to provide any type of amusement or recreation;

"precious metal" «métal précieux»

"precious metal" means a bar, ingot, coin or wafer that is composed of gold, silver or platinum and that is refined to a purity level of at least

(a) 99.5% in the case of gold and platinum, and

(b) 99.9% in the case of silver;

"prescribed" Version anglaise seulement

"prescribed" means

(a) in the case of a form or the manner of filing a form, authorized by the Minister,

(b) in the case of the information to be given on a form, specified by the Minister,

(c) in the case of the manner of making or filing an election, authorized by the Minister, and

(d) in any other case, prescribed by regulation or determined in accordance with rules prescribed by regulation;

"property" «bien»

"property" means any property, whether real or personal, movable or immovable, tangible or intangible, corporeal or incorporeal, and includes a right or interest of any kind, a share and a chose in action, but does not include money;

"province" « province »

"province" includes a participating province;

"public college" « collège public »

"public college" means an organization that operates a post-secondary college or post-secondary technical institute

(a) that receives from a government or a municipality funds that are paid for the purpose of assisting the organization in the ongoing provision of educational services to the general public, and

(b) the primary purpose of which is to provide programs of instruction in one or more fields of vocational, technical or general education;

"public institution" « institution publique »

"public institution" means a registered charity (within the meaning assigned by subsection 248(1) of the Income Tax Act) that is a school authority, a public college, a university, a hospital authority or a local authority determined under paragraph (b) of the definition "municipality" to be a municipality;

"public sector body" «organisme du secteur public»

"public sector body" means a government or a public service body;

"public service body" «organisme de services publics»

"public service body" means a non-profit organization, a charity, a municipality, a school authority, a hospital authority, a public college or a university;

"qualifying subsidiary" «filiale déterminée»

"qualifying subsidiary" of a particular corporation means another corporation resident in Canada not less than 90% of the value and number of the issued and outstanding shares of the capital stock of which, having full voting rights under all circumstances, are owned by the particular corporation, and includes

(a) a corporation that is a qualifying subsidiary of a qualifying subsidiary of the particular corporation,

(b) where the particular corporation is a credit union, every other credit union, and

(c) where the particular corporation is a member of a mutual insurance group, every other member of that group;

"real property" «immeuble»

"real property" includes

(a) in respect of property in the Province of Quebec, immovable property and every lease thereof,

(b) in respect of property in any other place in Canada, messuages, lands and tenements of every nature and description and every estate or interest in real property, whether legal or equitable, and

(c) a mobile home, a floating home and any leasehold or proprietary interest therein;

"recipient" « acquéreur »

"recipient" of a supply of property or a service means

(a) where consideration for the supply is payable under an agreement for the supply, the person who is liable under the agreement to pay that consideration,

(b) where paragraph (a) does not apply and consideration is payable for the supply, the person who is liable to pay that consideration, and

(c) where no consideration is payable for the supply,

(i) in the case of a supply of property by way of sale, the person to whom the property is delivered or made available,

(ii) in the case of a supply of property otherwise than by way of sale, the person to whom possession or use of the property is given or made available, and

(iii) in the case of a supply of a service, the person to whom the service is rendered,

and any reference to a person to whom a supply is made shall be read as a reference to the recipient of the supply;

"record" « registre »

"record" includes an account, an agreement, a book, a chart or table, a diagram, a form, an image, an invoice, a letter, a map, a memorandum, a plan, a return, a statement, a telegram, a voucher, and any other thing containing information, whether in writing or in any other form;

"registrant" « inscrit »

"registrant" means a person who is registered, or who is required to be registered, under Subdivision d of Division V;

"related convention supplies" « fournitures liées à un congrès »

"related convention supplies" means property or services acquired, imported or brought into a participating province by a person exclusively for consumption, use or supply by the person in connection with a convention, but does not include

(a) transportation services, other than a chartered service acquired by the person solely for the purpose of transporting attendees of the convention between any of the convention facilities, places of lodging of the attendees or transportation terminals,

(b) entertainment,

(c) except for the purposes of subsection 167.2(1) and section 252.4, property or services that are food or beverages or are supplied to the person under a contract for catering, or

(d) property or services supplied by the person in connection with the convention for consideration that is separate from the consideration for the admission to the convention, unless the recipient of the supply is acquiring the property or services exclusively for consumption or use in the course of promoting, at the convention, property or services supplied by, or a business of, the recipient;

"release" «dédouanement»

"release" has the same meaning as in the Customs Act;

"reporting period" «période de déclaration»

"reporting period" of a person means the reporting period of the person as determined under sections 245 to 251;

"residential complex" «immeuble d'habitation»

"residential complex" means

(a) that part of a building in which one or more residential units are located, together with

(i) that part of any common areas and other appurtenances to the building and the land immediately contiguous to the building that is reasonably necessary for the use and enjoyment of the building as a place of residence for individuals, and

(ii) that proportion of the land subjacent to the building that that part of the building is of the whole building,

(b) that part of a building that is

(i) the whole or part of a semi-detached house, rowhouse unit, residential condominium unit or other similar premises that is, or is intended to be, a separate parcel or other division of real property owned, or intended to be owned, apart from any other unit in the building, and

(ii) a residential unit,

together with that proportion of any common areas and other appurtenances to the building and the land subjacent or immediately contiguous to the building that is attributable to the unit and that is reasonably necessary for its use and enjoyment as a place of residence for individuals,

(c) the whole of a building described in paragraph (a), or the whole of a premises described in subparagraph (b)(i), that is owned by or has been supplied by way of sale to an individual and that is used primarily as a place of residence of the individual, an individual related to the individual or a former spouse or common-law partner of the individual, together with

(i) in the case of a building described in paragraph (a), any appurtenances to the building, the land subjacent to the building and that part of the land immediately contiguous to the building, that are reasonably necessary for the use and enjoyment of the building, and

(ii) in the case of a premises described in subparagraph (b)(i), that part of any common areas and other appurtenances to the building and the land subjacent or immediately contiguous to the building that is attributable to the unit and that is reasonably necessary for the use and enjoyment of the unit,

(d) a mobile home, together with any appurtenances to the home and, where the home is affixed to land (other than a site in a residential trailer park) for the purpose of its use and enjoyment as a place of residence for individuals, the land subjacent or immediately contiguous to the home that is attributable to the home and is reasonably necessary for that purpose, and

(e) a floating home,

but does not include a building, or that part of a building, that is a hotel, a motel, an inn, a boarding house, a lodging house or other similar premises, or the land and appurtenances attributable to the building or part, where the building is not described in paragraph (c) and all or substantially all of the leases, licences or similar arrangements, under which residential units in the building or part are supplied, provide, or are expected to provide, for periods of continuous possession or use of less than sixty days;

"residential condominium unit" «logement en copropriété»

"residential condominium unit" means a residential complex that is, or is intended to be, a bounded space in a building designated or described as a separate unit on a registered condominium or strata lot plan or description, or a similar plan or description registered under the laws of a province, and includes any interest in land pertaining to ownership of the unit;

"residential trailer park" « parc à roulottes résidentiel »

"residential trailer park" of a person means the land that is included in a trailer park of the person or, where the person has two or more trailer parks that are immediately contiguous to each other, the land that is included in those contiguous trailer parks, and any buildings, fixtures and other appurtenances to the land that are reasonably necessary for

(a) the use and enjoyment of sites in the trailer parks by individuals residing in or occupying mobile homes, or travel trailers, motor homes or similar vehicles or trailers, situated or to be situated on those sites, or

(b) the purpose of engaging in the business of supplying those sites by way of lease, licence or similar arrangement,

but does not include such land and appurtenances or any part of them unless the land encompasses at least two sites and all or substantially all of the sites in the trailer parks

(c) are supplied, or are intended to be supplied, under a lease, licence or similar arrangement under which continuous possession or use of a site is provided for a period of at least

(i) one month, in the case of a mobile home or other residential unit, and

(ii) twelve months, in the case of a travel trailer, motor home or similar vehicle or trailer that is not a residential unit, and

(d) if the sites were occupied by mobile homes, would be suitable for use by individuals as places of residence throughout the year;

"residential unit" «habitation»

"residential unit" means

(a) a detached house, semi-detached house, rowhouse unit, condominium unit, mobile home, floating home or apartment,

(b) a suite or room in a hotel, a motel, an inn, a boarding house or a lodging house or in a residence for students, seniors, individuals with a disability or other individuals, or

(c) any other similar premises,

or that part thereof that

(d) is occupied by an individual as a place of residence or lodging,

(e) is supplied by way of lease, licence or similar arrangement for the occupancy thereof as a place of residence or lodging for individuals,

(f) is vacant, but was last occupied or supplied as a place of residence or lodging for individuals, or

(g) has never been used or occupied for any purpose, but is intended to be used as a place of residence or lodging for individuals;

"sale" «vente»

"sale", in respect of property, includes any transfer of the ownership of the property and a transfer of the possession of the property under an agreement to transfer ownership of the property;

"school authority" « administration scolaire »

"school authority" means an organization that operates an elementary or secondary school in which it provides instruction that meets the standards of educational instruction established by the government of the province in which the school is operated;

"secured creditor" « créancier garanti »

"secured creditor" means

(a) a particular person who has a security interest in the property of another person, or

(b) a person who acts for or on behalf of the particular person with respect to the security interest and includes

(i) a trustee appointed under a trust deed relating to a security interest,

(ii) a receiver or receiver-manager appointed by the particular person or appointed by a court on the application of the particular person,

(iii) a sequestrator, or

(iv) any other person performing a function similar to that of a person referred to in any of subparagraphs (i) to (iii);

"security interest" « droit en garantie »

"security interest" means any interest in property that secures payment or performance of an obligation, and includes an interest created by or arising out of a debenture, mortgage, hypothec, lien, pledge, charge, deemed or actual trust, assignment or encumbrance of any kind whatever, however or whenever arising, created, deemed to arise or otherwise provided for;

"segregated fund" « fonds réservé »

"segregated fund" of an insurer means a specified group of properties that is held in respect of insurance policies all or part of the reserves for which vary in amount depending on the fair market value of the properties;

"selected listed financial institution" « institution financière désignée particulière »

"selected listed financial institution" means, at any time, a listed financial institution who is at that time a selected listed financial institution under subsection 225.2(1);

"self-contained domestic establishment" « établissement domestique autonome »

"self-contained domestic establishment" has the meaning assigned by subsection 248(1) of the Income Tax Act;

"service" « service »

"service" means anything other than

(a) property,

(b) money, and

(c) anything that is supplied to an employer by a person who is or agrees to become an employee of the employer in the course of or in relation to the office or employment of that person;

"short-term accommodation" « logement provisoire »

"short-term accommodation" means a residential complex or a residential unit that is supplied to a recipient by way of lease, licence or similar arrangement for the purpose of its occupancy by an individual as a place of residence or lodging, where the period throughout which the individual is given continuous occupancy of the complex or unit is less than one month and, for the purposes of sections 252.1, 252.2 and 252.4,

(a) includes any type of overnight shelter (other than shelter on a train, trailer, boat or structure that has means of, or is capable of being readily adapted for, self-propulsion) when supplied as part of a tour package (within the meaning assigned by subsection 163(3)) that also includes food and the services of a guide, and

(b) does not include a complex or unit when it

(i) is supplied to the recipient under a timeshare arrangement, or

(ii) is included in that part of a tour package that is not the taxable portion of the tour package (within the meaning assigned to those expressions by subsection 163(3));

"single unit residential complex" «immeuble d'habitation à logement unique»

"single unit residential complex" means a residential complex that does not contain more than one residential unit, but does not include a residential condominium unit;

"small supplier" « petit fournisseur »

"small supplier", at any time, means a person who is at that time a small supplier under section 148 or 148.1;

"specified Crown agent" « mandataire désigné »

"specified Crown agent" means

(a) a prescribed agent of Her Majesty in right of Canada, or

(b) an agent of Her Majesty in right of a province

(i) that pays tax because of an agreement under section 32 of the Federal-Provincial Fiscal Arrangements Act entered into by the government of the province, or

(ii) that is prescribed;

"specified motor vehicle" « véhicule à moteur déterminé »

"specified motor vehicle" means

(a) goods that are or would, if they were imported, be classified under any of tariff item 8701.20.00, subheading Nos. 8701.30 and 8701.90, heading No. 87.02, tariff item 8703.10.10, subheading Nos. 8703.21 to 8703.90 and 8704.21 to 8704.90, heading 87.05, tariff items 8711.20.00 to 8711.90.00 and 8713.90.00, 8716.10.21, 8716.10.29 and 8716.39.30 to 8716.40.00 and subheading No. 8716.80 of Schedule I to the Customs Tariff, other than racing cars classified under heading No. 87.03 of that Schedule and prescribed motor vehicles, and

(b) prescribed motor vehicles;

"specified tangible personal property" «bien meuble corporel désigné»

"specified tangible personal property" means property that is, or is an interest in,

(a) a print, an etching, a drawing, a painting, a sculpture or other similar work of art,

(b) jewellery,

(c) a rare folio, a rare manuscript or a rare book,

(d) a stamp,

(e) a coin, or

(f) prescribed personal property;

"sponsor" « promoteur »

"sponsor" of a convention means the person who convenes the convention and supplies admissions to it;

"straddle plant" « installation de traitement complémentaire »

"straddle plant" means a natural gas processing plant devoted primarily to the recovery of natural gas liquids or ethane from natural gas that is transported by pipeline to the plant by a common carrier of natural gas;

"substantial renovation" «rénovations majeures»

"substantial renovation" of a residential complex means the renovation or alteration of a building to such an extent that all or substantially all of the building that existed immediately before the renovation or alteration was begun, other than the foundation, external walls, interior supporting walls, floors, roof and staircases, has been removed or replaced where, after completion of the renovation or alteration, the building is, or forms part of, a residential complex;

"supplier" Version anglaise seulement

"supplier", in respect of a supply, means the person making the supply;

"supply" «fourniture»

"supply" means, subject to sections 133 and 134, the provision of property or a service in any manner, including sale, transfer, barter, exchange, licence, rental, lease, gift or disposition;

"tax" «taxe»

"tax" means tax payable under this Part;

"taxable supply" « fourniture taxable »

"taxable supply" means a supply that is made in the course of a commercial activity;

"taxation year" « année d'imposition »

"taxation year" of a person means

(a) where the person is a taxpayer, within the meaning of that term in the Income Tax Act (other than an unincorporated person exempt because of subsection 149(1) of that Act from tax under Part I of that Act on all or part of the person's taxable income), the taxation year of the person for the purposes of that Act,

(b) where the person is a partnership described in subparagraph 249.1(1)(b)(ii) of that Act, the fiscal period of the person's business determined under subsection 249.1(1) of that Act, and

(c) in any other case, the period that would be the taxation year of the person for the purposes of that Act if the person were a corporation other than a professional corporation (within the meaning assigned by subsection 248(1) of that Act);

"Tax Court" Version anglaise seulement

"Tax Court" means the Tax Court of Canada;

"tax fraction" [Repealed, 1997, c. 10, s. 150]

"taxi business" « entreprise de taxis »

"taxi business" means a business carried on in Canada of transporting passengers by taxi for fares that are regulated under the laws of Canada or a province;

"tax rate" « taux de taxe »

"tax rate", for or in relation to a participating province, means the rate set opposite the name of the province in Schedule VIII;

"telecommunication service" « service de télécommunication »

"telecommunication service" means

(a) the service of emitting, transmitting or receiving signs, signals, writing, images or sounds or intelligence of any nature by wire, cable, radio, optical or other electromagnetic system, or by any similar technical system, or

(b) making available for such emission, transmission or reception telecommunications facilities of a person who carries on the business of supplying services referred to in paragraph (a);

"telecommunications facility" « installation de télécommunication »

"telecommunications facility" means any facility, apparatus or other thing (including any wire, cable, radio, optical or other electromagnetic system, or any similar technical system, or any part thereof) that is used or is capable of being used for telecommunications;

"testamentary trust" « fiducie testamentaire »

"testamentary trust" has the meaning assigned by subsection 248(1) of the Income Tax Act;

"trailer park" « parc à roulottes »

"trailer park" of a person means a piece of land that is owned by or leased to the person and that is exclusively composed of

(a) one or more sites each of which is, or is intended to be, supplied by the person by way of lease, licence or similar arrangement to the owner, lessee or person in occupation or possession of a mobile home, or a travel trailer, motor home or similar vehicle or trailer, situated or to be situated on the site, and

(b) other land that is reasonably necessary for

(i) the use and enjoyment of the sites by individuals residing in or occupying mobile homes, or travel trailers, motor homes or similar vehicles or trailers, situated or to be situated on those sites, or

(ii) the purpose of engaging in the business of supplying the sites by way of lease, licence or similar arrangement;

"university" « université »

"university" means a recognized degree-granting institution or an organization that operates a college affiliated with, or a research body of, such an institution;

"used tangible personal property" « bien meuble corporel d'occasion »

"used tangible personal property" means tangible personal property that has been used in Canada;

"zero-rated supply" «fourniture détaxée»

"zero-rated supply" means a supply included in Schedule VI.

Meaning of "Canada"

(2) Subject to subsection (3), in this Part, "Canada" includes

(a) the sea bed and subsoil of the submarine areas adjacent to the coasts of Canada in respect of which the government of Canada or of a province may grant a right, licence or privilege to explore for or exploit any minerals; and

(b) the seas and airspace above the submarine areas referred to in paragraph (a) in respect of any activities carried on in connection with the exploration for or exploitation of minerals.

Idem

(3) In or in respect of Division III, "Canada" has the same meaning as in the Customs Act.

Application of provisions to schedules

(4) Any provision of this Part that applies for the purposes of this Part also applies for the purposes of Schedules V to X.

1990, c. 45, s. 12; 1993, c. 27, ss. 10, 204(F); 1994, c. 9, s. 2, c. 13, s. 7; 1996, c. 21, s. 64; 1997, c. 10, ss. 1, 150, 255; 1998, c. 19, s. 281; 1999, c. 17, s. 152, c. 28, s. 159; 2000, c. 12, ss. 111, 113, c. 30, s. 18.

Compound interest

124. (1) Interest computed at a prescribed rate and any penalty computed at a rate per year under any provision of this Part shall be compounded daily.

Idem

(2) Where, on any day, both penalty computed at a rate per year and interest are required to be compounded, they shall, on that day, be compounded together at a single rate equal to the total of the penalty rate and the interest rate as though both the penalty and interest were interest computed at that single rate.

Application of interest

(3) Where an amendment to this Part, or an amendment or an enactment that relates to this Part,

(a) applies to a person who did something or to or for whom something was done,

(b) applies to property or a service that was supplied or in respect of which something was done,

(c) applies to an event or a transaction that occurred,

(d) applies to a period all or part of which is, or

(e) comes into force on a particular day that is,

before the day the amendment or enactment is assented to or promulgated, for the purposes of applying the provisions of this Part that relate to or that provide for the payment, or the liability for payment, of interest in respect of any amount, the amount shall be determined and interest shall be computed thereon as though the amendment or enactment had been assented to or promulgated before the thing was done, the supply was made, the occurrence of the event or transaction, the beginning of the period or the particular day, as the case may be.

Exception

(4) Subsection (3) does not apply for the purposes of computing any penalties under this Part.

1990, c. 45, s. 12; 1993, c. 27, s. 11.

Negative amounts

125. Except as specifically otherwise provided, where an amount or a number is required under this Part to be determined or calculated by or in accordance with an algebraic formula, if the amount or number when so determined or calculated would, but for this section, be a negative amount or number, it shall be deemed to be nil.

1990, c. 45, s. 12.

Relationships, Associations, Separate Persons and Residence

Arm's length

126. (1) For the purposes of this Part, related persons shall be deemed not to deal with each other at arm's length and it is a question of fact whether persons not related to each other were, at any particular time, dealing with each other at arm's length.

Related persons

(2) Persons are related to each other for the purposes of this Part if, by reason of subsections 251(2) to (6) of the Income Tax Act, they are related to each other for the purposes of that Act.

Idem

(3) For the purposes of this Part, a member of a partnership shall be deemed to be related to the partnership.

1990, c. 45, s. 12.

Associated persons

127. (1) A particular corporation is associated with another corporation for the purposes of this Part if, by reason of subsections 256(1) to (6) of the Income Tax Act, the particular corporation is associated with the other corporation for the purposes of that Act.

Idem

(2) A person other than a corporation is associated with a particular corporation for the purposes of this Part if the particular corporation is controlled by the person or by a group of persons of which the person is a member and each of whom is associated with each of the others.

Idem

(3) For the purposes of this Part, a person is associated with

(a) a partnership if the total of the shares of the profits of the partnership to which the person and all other persons who are associated with the person are entitled is more than half of the total profits of the partnership, or would be more than half of the total profits of the partnership if it had profits; and

(b) a trust if the total of the values of the interests in the trust of the person and all other persons who are associated with the person is more than half of the total value of all interests in the trust.

Idem

(4) For the purposes of this Part, a person is associated with another person if each of them is associated with the same third person.

1990, c. 45, s. 12.

Closely related corporation

128. (1) For the purposes of this Part, a particular corporation and another corporation are closely related to each other at any time if at that time the particular corporation is resident in Canada and is a registrant and at that time

(a) the other corporation is resident in Canada and is a registrant and not less than 90% of the value and number of the issued and outstanding shares of the capital stock of the other corporation, having full voting rights under all circumstances, are owned by

(i) the particular corporation,

(ii) a qualifying subsidiary of the particular corporation,

(iii) a corporation of which the particular corporation is a qualifying subsidiary,

(iv) a qualifying subsidiary of a corporation of which the particular corporation is a qualifying subsidiary, or

(v) any combination of the corporations or subsidiaries referred to in subparagraphs (i) to (iv),

(vi) [Repealed, 1993, c. 27, s. 12]

(b) the other corporation is a prescribed corporation in relation to the particular corporation,

and, for the purposes of this section, a non-resident insurer that has a permanent establishment in Canada shall be deemed to be resident in Canada.

Idem

(2) Where under subsection (1) two corporations resident in Canada are closely related to the same corporation, or would be so related if all of the corporations were resident in Canada, they are closely related to each other for the purposes of this Part.

Credit unions and members of mutual insurance groups

(3) For the purposes of this section,

(a) a credit union and a member of a mutual insurance group shall each be deemed to be a registrant; and

(b) an investment fund that is a member of a mutual insurance group shall be deemed to be a corporation.

1990, c. 45, s. 12; 1993, c. 27, s. 12.

Meaning of "small supplier division"

129. (1) In this section and section 129.1, "small supplier division" of a public service body, at any time, means a branch or division of the body that, at that time,

(a) is a branch or division designated by the Minister as an eligible division for the purposes of this section; and

(b) would be a small supplier under section 148 if

(i) the branch or division were a person separate from the body and its other branches or divisions,

(ii) the branch or division were not associated with any other person, and

(iii) every supply made by the body through the branch or division were made by the branch or division.

Branches of public service bodies

(2) A public service body that is engaged in one or more activities in separate branches or divisions may apply to the Minister, in prescribed form containing prescribed information, to have a branch or division specified in the application designated by the Minister as an eligible division for the purposes of this section.

Designation by Minister

(3) Where the Minister receives an application under subsection (2), the Minister may, by notice in writing, designate a branch or division specified in the application as an eligible division for the purposes of this section, effective on a day specified in the notice, if the Minister is satisfied that

(a) the branch or division can be separately identified by reference to its location or the nature of the activities engaged in by it;

(b) separate records, books of account and accounting systems are maintained in respect of the branch or division; and

(c) a revocation under subsection (4) pursuant to a request made by the body in respect of the branch or division has not become effective in the 365-day period ending on that day.

Revocation of designation

(4) The Minister may, in writing, revoke a designation under subsection (3) of a branch or division of a public service body where the conditions described in paragraph (3)(a) or (b) are no longer met in respect of the branch or division or the body makes a request in writing to the Minister that the designation be revoked.

Notice of revocation

(5) Where, under subsection (4), the Minister revokes a designation of a branch or division of a public service body, the Minister shall send a notice in writing of the revocation to the body and shall specify in the notice the effective date of the revocation.

Supply of property on becoming a small supplier division

(6) For the purposes of this Part, where a branch or division of a public service body that is a registrant becomes at any time a small supplier division and the body does not, at that time, cease to be a registrant, the body shall be deemed

(a) to have made, immediately before that time, a supply of each of its properties, other than capital property or an improvement thereto, that was held immediately before that time for consumption, use or supply in the course of commercial activities of the body and that the body begins, immediately after that time, to hold for consumption, use or supply primarily in the course of activities engaged in by the body through its small supplier divisions; and

(b) except where the supply is an exempt supply, to have collected, immediately before that time, tax in respect of the supply equal to the total of all input tax credits in respect of the property that the body was entitled to claim at or before that time.

Services and rented properties on becoming a small supplier division

(7) Where,

(a) at any time in a particular reporting period of a public service body that is a registrant, a branch or division of the body becomes a small supplier division,

(b) the body does not, at that time, cease to be a registrant, and

(c) in or before that period, tax became payable, or was paid without having become payable, by the body and is calculated on consideration, or a part thereof,

(i) that is a rent, royalty or similar payment in respect of property and that is reasonably attributable to a period (in this subsection referred to as the "lease period") after that time, or

(ii) that is reasonably attributable to services that are to be rendered after that time,

the following rules apply:

(d) there shall not be included, in determining the input tax credits in respect of that tax that are claimed by the body in the return under section 238 for that or any subsequent reporting period, any portion of the amount determined by the formula

A x B

where

A is that tax, and

B is the extent (expressed as a percentage) to which the property is used by the body during the lease period, or the services were acquired or imported by the body for consumption, use or supply, in the course of activities engaged in by the body through the branch or division, and

(e) where all or any portion of the amount determined under paragraph (d) was included in determining an input tax credit claimed by the body in a return under section 238 for a reporting period of the body ending before the particular reporting period, that amount or portion thereof shall be added in determining the net tax for the particular reporting period.

1990, c. 45, s. 12; 1993, c. 27, s. 13; 1994, c. 9, s. 3.

Supply by small supplier division

129.1 (1) Where a public service body makes a taxable supply, other than a supply of real property by way of sale, through a branch or division of the body and the consideration or a part thereof for the supply becomes due to the body at a time when the branch or division is a small supplier division or is paid to the body at such a time without having become due,

(a) that consideration or part thereof, as the case may be, shall not be included in calculating the tax payable in respect of the supply or in determining a threshold amount of the body under section 249; and

(b) that supply shall, for the purposes of this Part, be deemed not to have been made by a registrant.

Restriction on input tax credits for purchases

(2) In determining an input tax credit of a public service body, there shall not be included an amount in respect of tax that, at any time after March 27, 1991, became payable, or was paid without having become payable, by the body, to the extent that the tax

(a) is in respect of property (other than capital property or improvements thereto) acquired, imported or brought into a participating province by the body for the purpose of consumption, use or supply in the course of activities engaged in by the body through a small supplier division of the body; or

(b) is calculated on consideration, or a part thereof, that is reasonably attributable to services that were, before that time, consumed, used or supplied by the body in the course of activities engaged in by the body through a small supplier division of the body or that are, at that time, intended to be so consumed, used or supplied.

(3) [Repealed, 1997, c. 10, s. 151]

Change in use of non-capital property

(4) Where

(a) at any time after March 27, 1991, a public service body that is a registrant begins to hold property of the body (other than capital property) for consumption, use or supply primarily in the course of activities engaged in by the body through its small supplier divisions, and

(b) immediately before that time, the body was holding the property for consumption, use or supply

(i) in the course of commercial activities of the body, and

(ii) otherwise than primarily in the course of activities engaged in by the body through its small supplier divisions,

except where subsection 129(6) or 171(3) applies, the body shall be deemed to have made, immediately before that time, a supply of the property and, except where the supply is an exempt supply, to have collected, immediately before that time, tax in respect of the supply equal to the total of all input tax credits in respect of the property that the body was entitled to claim at or before that time.

Idem

(5) Where

(a) a public service body begins, at any time after March 27, 1991, to hold property of the body (other than capital property) for consumption, use or supply primarily in the course of activities engaged in by the body otherwise than through its small supplier divisions,

(b) immediately before that time the property was held by the body for consumption, use or supply primarily in the course of activities engaged in by the body through its small supplier divisions, and

(c) immediately after that time the property is held by the body for consumption, use or supply in the course of commercial activities engaged in by the body otherwise than through its small supplier divisions,

except where subsection 171(1) applies, for the purpose of determining an input tax credit of the body, it shall be deemed to have received a supply of the property and to have paid, at that time, tax in respect of the supply equal to the lesser of

(d) the amount, if any, by which

(i) the total of all amounts each of which is tax that, before that time, was paid or became payable by the body in respect of the last acquisition or importation of the property by the body or that was deemed under subsection 129(6) to have been collected by the body in respect of the property

exceeds

(ii) the total of all input tax credits and rebates that the body was entitled to claim under this Part before that time in respect of that acquisition or importation, and

(e) tax calculated on the fair market value of the property at that time.

Use of capital property

(6) For the purposes of determining an input tax credit in respect of capital property of a public service body and for the purposes of Subdivision d of Division II, an activity engaged in by a public service body shall be deemed not to be a commercial activity of the body to the extent that the activity is engaged in through a small supplier division of the body.

Application of change in use rules

(7) Subsections 200(2) and 206(4) and (5) do not apply to a public service body in respect of a reduction in the extent to which property is used in commercial activities of the body where the reduction in use occurs

(a) before March 28, 1991; and

(b) as a result of the application of subsection (6) but not as a result of a branch or division of the body becoming a small supplier division.

1993, c. 27, s. 13; 1997, c. 10, s. 151.

Members of unincorporated organizations

130. (1) Where a particular unincorporated organization is a member of another unincorporated organization, the particular organization and the other organization may apply jointly to the Minister, in prescribed form containing prescribed information, to have the particular organization deemed to be a branch of the other organization and not to be a separate person.

Approval by Minister

(2) Where the Minister receives an application under subsection (1) in respect of a particular organization that is a member of another organization and is satisfied that it is appropriate, for the purposes of this Part, to approve the application, the Minister may, in writing, approve the application and, subject to subsection (3), the particular organization shall, for the purposes of this Part (other than the purposes for which the particular organization is deemed under subsection 129(2) to be a separate person), be deemed to be a branch of the other organization and not to be a separate person.

Revocation of approval

(3) Where

(a) the Minister has approved an application made under subsection (1) in respect of a particular organization that is a member of another organization, and

(b) either the particular organization or the other organization requests the Minister in writing to revoke the approval,

the Minister may revoke the approval and thereafter the particular organization shall be deemed to be a separate person and not to be a branch of the other organization.

Notice of revocation

(4) Where under subsection (3) the Minister revokes an approval, the Minister shall send a notice in writing of the revocation to the organizations affected and shall specify therein the effective date of the revocation.

1990, c. 45, s. 12.

Segregated fund a separate person

131. (1) For the purposes of this Part, a segregated fund of an insurer shall be deemed to be a trust that is a separate person from the insurer and that does not deal at arm's length with the insurer and

(a) the insurer shall be deemed to be a trustee of that trust;

(b) the activities of the segregated fund shall be deemed to be activities of the trust and not activities of the insurer; and

(c) where, at any time, an amount (other than an amount in respect of tax under this Part) is deducted from the fund,

(i) if the amount is in respect of property or a service that the fund is, because of the operation of this Part other than this paragraph, considered to have acquired from the insurer, that supply shall be deemed to be a taxable supply and the amount shall be deemed to be consideration for that supply that becomes due at that time, and

(ii) if the amount is not in respect of property or a service that the fund is, because of the operation of this Part other than this paragraph, considered to have acquired either from the insurer or another person, the insurer shall be deemed to have made, and the fund shall be deemed to have received, at that time, a taxable supply of a service and the amount shall be deemed to be consideration for the supply that becomes due at that time.

Exceptions

(2) Paragraph (1)(c) does not apply to an amount deducted from a segregated fund of an insurer if

(a) the amount is a distribution of income, a payment of a benefit, or the amount of a redemption, in respect of an interest of another person in the fund; or

(b) the amount is a prescribed amount.

1990, c. 45, s. 12; 2000, c. 30, s. 19.

Person resident in Canada

132. (1) For the purposes of this Part, a person shall be deemed to be resident in Canada at any time

(a) in the case of a corporation, if the corporation is incorporated or continued in Canada and not continued elsewhere;

(b) in the case of a partnership, an unincorporated society, a club, an association or an organization, or a branch thereof, if the member, or a majority of the members, having management and control thereof is or are resident in Canada at that time;

(c) in the case of a labour union, if it is carrying on activities as such in Canada and has a local union or branch in Canada at that time; or

(d) in the case of an individual, if the individual is deemed under any of paragraphs 250(1)(b) to (f) of the Income Tax Act to be resident in Canada at that time.

Permanent establishment of non-resident

(2) For the purposes of this Part, where a non-resident person has a permanent establishment in Canada, the person shall be deemed to be resident in Canada in respect of, but only in respect of, activities of the person carried on through that establishment.

Permanent establishment of resident

(3) For the purposes of this Part, where a person who is resident in Canada has a permanent establishment in a country other than Canada, the person shall be deemed to be a non-resident person in respect of, but only in respect of, activities of the person carried on through that establishment.

Supplies between permanent establishments

(4) For the purposes of this Part, where a person carries on a business through a permanent establishment of the person in Canada and through another permanent establishment of the person outside Canada,

(a) any transfer of personal property or rendering of a service by the establishment in Canada to the establishment outside Canada shall be deemed to be a supply of the property or service; and

(b) in respect of that supply, the permanent establishments shall be deemed to be separate persons who deal with each other at arm's length.

Residence of international shipping corporations

(5) Where under subsection 250(6) of the Income Tax Act a corporation is deemed for the purposes of that Act to be resident in a country other than Canada throughout a taxation year of the corporation and not to be resident in Canada at any time in the year, the corporation shall, for the purposes of this Part but subject to subsection (2), be deemed to be resident in that other country throughout the year and not to be resident in Canada at any time in the year.

1990, c. 45, s. 12; 1993, c. 27, s. 14; 1997, c. 10, s. 2.

Person resident in a province

132.1 (1) For the purposes of this Part, other than determining the place of residence of an individual in the individual's capacity as a consumer, a person is deemed to be resident in a province if the person is resident in Canada and

(a) in the case of a corporation, the corporation is incorporated or continued under the laws of that province and not continued elsewhere;

(b) in the case of a partnership, an unincorporated society, a club, an association or an organization, or a branch thereof, the member, or a majority of the members, having management and control thereof is or are resident in that province;

(c) in the case of a labour union, it is carrying on activities as such in that province and has a local union or branch in that province; or

(d) in any case, the person has a permanent establishment in that province.

Meaning of "permanent establishment"

(2) In this section and Schedule IX, "permanent establishment" of a person means

(a) in the case of an individual, the estate of a deceased individual or a trust that carries on a business (within the meaning assigned by subsection 248(1) of the Income Tax Act), a permanent establishment (as defined for the purposes of Part XXVI of the Income Tax Regulations) of the person;

(b) in the case of a corporation that carries on a business (within the meaning assigned by subsection 248(1) of that Act), a permanent establishment (as defined for the purposes of Part IV of those Regulations) of the person;

(c) in the case of a particular partnership

(i) a permanent establishment (as defined for the purposes of Part XXVI of those Regulations) of a member that is an individual, the estate of a deceased individual or a trust where the establishment relates to a business (within the meaning assigned by subsection 248(1) of that Act) carried on through the partnership,

(ii) a permanent establishment (as defined for the purposes of Part IV of those Regulations) of a member that is a corporation where the establishment relates to a business (within the meaning assigned by subsection 248(1) of that Act) carried on by the particular partnership, or

(iii) a permanent establishment (within the meaning of this subsection) of a member that is a partnership where the establishment relates to a business (within the meaning assigned by subsection 248(1) of that Act) carried on by the particular partnership; and

(d) in any other case, a place that would be a permanent establishment (as defined for the purposes of Part IV of those Regulations) of the person if the person were a corporation and its activities were a business for purposes of that Act.

1997, c. 10, s. 152.

Supplies and Commercial Activities

Agreement as supply

133. For the purposes of this Part, where an agreement is entered into to provide property or a service,

(a) the entering into of the agreement shall be deemed to be a supply of the property or service made at the time the agreement is entered into; and

(b) the provision, if any, of property or a service under the agreement shall be deemed to be part of the supply referred to in paragraph (a) and not a separate supply.

1990, c. 45, s. 12.

Transfer of security interest

134. For the purposes of this Part, where, under an agreement entered into in respect of a debt or obligation, a person transfers property or an interest in property for the purpose of securing payment of the debt or performance of the obligation, the transfer shall be deemed not to be a supply, and where, on payment of the debt or performance of the obligation or the forgiveness of the debt or obligation, the property or interest is retransferred, the retransfer of the property or interest shall be deemed not to be a supply.

1990, c. 45, s. 12.

Sponsorship of public sector bodies

135. For the purposes of this Part, where a public sector body makes

(a) a supply of a service, or

(b) a supply by way of licence of the use of a copyright, trade-mark, trade-name or other similar property of the body,

to a person who is the sponsor of an activity of the body for use by the person exclusively in publicizing the person's business, the supply by the body of the service or the use of the property shall be deemed not to be a supply, except where it may reasonably be regarded that the consideration for the supply is primarily for a service of advertising by means of radio or television or in a newspaper, magazine or other publication published periodically or for a prescribed service.

1990, c. 45, s. 12; 1997, c. 10, s. 3.

Lease etc. of property

136. (1) For the purposes of this Part, a supply, by way of lease, licence or similar arrangement, of the use or right to use real property or tangible personal property shall be deemed to be a supply of real property or tangible personal property, as the case may be.

Combined supply of real property

(2) For the purposes of this Part, where a supply of real property includes the provision of

(a) real property that is

(i) a residential complex,

(ii) land, a building or part of a building that forms or is reasonably expected to form part of a residential complex, or

(iii) a residential trailer park, and

(b) other real property that is not part of the property referred to in paragraph (a),

the property referred to in paragraph (a) and the property referred to in paragraph (b) shall each be deemed to be a separate property and the provision of the property referred to in paragraph (a) shall be deemed to be a separate supply from the provision of the property referred to in paragraph (b), and neither supply is incidental to the other.

(2.1) [Repealed, 1997, c. 10, s. 153]

Idem

(3) For the purposes of this Part, where a builder of an addition to a multiple unit residential complex makes a supply of the complex or an interest in it by way of sale that, but for this subsection, would be a taxable supply and, but for the construction of the addition, would be an exempt supply described in section 5 of Part I of Schedule V, the addition and the remainder of the complex shall each be deemed to be a separate property and the sale of the addition or the interest in it shall be deemed to be a separate supply from the sale of the remainder of the complex or the interest in it, and neither supply is incidental to the other.

Idem

(4) For the purposes of this Part, where a person who has increased the area of land included in a residential trailer park of the person makes a supply of the park or an interest in it that, but for this subsection, would be a taxable supply and, but for the increase in the area of land included in the park, would be an exempt supply described in section 5.3 of Part I of Schedule V, the area of land by which the park was increased and the remainder of the park shall each be deemed to be a separate property and the sale of the additional area or the interest therein shall be deemed to be a supply separate from the sale of the remainder of the park or the interest in the park, and neither supply is incidental to the other.

1990, c. 45, s. 12; 1993, c. 27, s. 15; 1997, c. 10, ss. 4, 153.

Lease, etc. of property

136.1 (1) For the purposes of this Part, where a supply of property is made by way of lease, licence or similar arrangement to a person for consideration that includes a payment that is attributable to a period (in this subsection referred to as the "lease interval") that is the whole or a part of the period during which possession or use of the property is provided under the arrangement,

(a) the supplier is deemed to have made, and the person is deemed to have received, a separate supply of the property for the lease interval;

(b) the supply of the property for the lease interval is deemed to be made on the earliest of

(i) the first day of the lease interval,

(ii) the day on which the payment that is attributable to the lease interval becomes due, and

(iii) the day on which the payment that is attributable to the lease interval is paid;

(c) the payment that is attributable to the lease interval is deemed to be consideration payable in respect of the supply of the property for the lease interval; and

(d) if, in the absence of paragraph (a), the supply of the property under the arrangement would be deemed to be made in or outside Canada, all of the supplies of the property that are, because of that paragraph, deemed to be made under the arrangement are deemed to be made in or outside Canada, as the case may be.

Delivery on exercise of option

(1.1) For the purposes of this Part, if a recipient of a supply by way of lease, licence or similar arrangement of tangible personal property exercises an option to purchase the property that is provided for under the arrangement and the recipient begins to have possession of the property under the agreement of purchase and sale of the property at the same time and place as the recipient ceases to have possession of the property as lessee or licensee under the arrangement, that time and place is, for greater certainty, deemed to be the time and place at which the property is delivered or made available to the recipient in respect of the supply by way of sale of the property to the recipient.

Ongoing services

(2) For the purposes of this Part, where a supply of a service is made to a person for consideration that includes a payment that is attributable to a period (in this subsection referred to as a "billing period") that is the whole or a part of the period during which the service is or is to be rendered under the agreement for the supply,

(a) the supplier is deemed to have made, and the person is deemed to have received, a separate supply of the service for the billing period;

(b) the supply of the service for the billing period is deemed to be made on the earliest of

(i) the first day of the billing period,

(ii) the day on which the payment that is attributable to the billing period becomes due, and

(iii) the day on which the payment that is attributable to the billing period is made;

(c) the payment that is attributable to the billing period is deemed to be consideration payable in respect of the supply of the service for the billing period; and

(d) if, in the absence of paragraph (a), the supply of the service under the agreement would be deemed to be made in or outside Canada, all of the supplies of the service that are, because of that paragraph, deemed to be made under the agreement are, except in the case of a telecommunication service, deemed to be made in or outside Canada, as the case may be.

1997, c. 10, s. 154; 2000, c. 30, s. 20.

Supply of real property partly outside province

136.2 For the purposes of determining in which participating province, if any, a taxable supply of real property is made and determining the tax payable, if any, under subsection 165(2) in respect of the supply for the purposes of this Part, where the supply includes the provision of real property situated in a particular province and real property situated in another province or outside Canada, the provision of the part of the real property that is situated in the particular province and the provision of the part of the real property that is situated in the other province or outside Canada, as the case may be, are each deemed to be a separate taxable supply made for separate consideration equal to the portion of the total consideration for all the property that is reasonably attributable to the part.

1997, c. 10, s. 154.

Separate supplies of freight services

136.3 For the purposes of determining, for the purposes of this Part, the tax payable, if any, under subsection 165(2) in respect of a supply of a freight transportation service (within the meaning of Part VI of Schedule IX) that includes the provision of a service of transporting particular tangible personal property to a destination in a province and other tangible personal property to a destination outside the province and determining in which participating province, if any, the supply is made, the provision of the service of transporting the particular property and the provision of the service of transporting the other property are each deemed to be a separate supply made for separate consideration equal to the portion of the total consideration for the supply that is reasonably attributable to the transportation of the particular property or other property, as the case may be.

1997, c. 10, s. 154.

Definition "telecommunications channel"

136.4 (1) In this section, "telecommunications channel" means a telecommunications circuit, line, frequency, channel, partial channel or other means of sending or receiving a telecommunication but does not include a satellite channel.

Dedicated telecommunications channel

(2) For the purposes of this Part, where a person supplies a telecommunication service of granting to the recipient of the supply sole access to a telecommunications channel for transmitting telecommunications between a place in a particular province and a place in another province,

(a) the person is deemed to have made a separate supply of the service in each of those two provinces and in each province, if any, that is between those provinces; and

(b) the consideration for the supply in each province is deemed to be equal to the amount determined by the formula

(A/B) x C

where

A is the distance over which the telecommunications would be transmitted in that province if the telecommunications were transmitted solely by means of cable and related telecommunications facilities located in Canada that connected, in a direct line, the transmitters for emitting and receiving the telecommunications,

B is the distance over which the telecommunications would be transmitted in Canada if the telecommunications were transmitted solely by such means, and

C is the total consideration paid or payable by the recipient for the sole access to the telecommunications channel.

1997, c. 10, s. 154.

Coverings and containers

137. For the purposes of this Part, where tangible personal property of a particular class is supplied in a covering or container that is usual for that class of property, the covering or container shall be deemed to form part of the property so supplied.

1990, c. 45, s. 12.

Incidental supplies

138. For the purposes of this Part, where

(a) a particular property or service is supplied together with any other property or service for a single consideration, and

(b) it may reasonably be regarded that the provision of the other property or service is incidental to the provision of the particular property or service,

the other property or service shall be deemed to form part of the particular property or service so supplied.

1990, c. 45, s. 12.

Financial services in mixed supply

139. For the purposes of this Part, where

(a) one or more financial services are supplied together with one or more other services that are not financial services, or with properties that are not capital properties of the supplier, for a single consideration,

(b) the financial services are related to the other services or the properties, as the case may be,

(c) it is the usual practice of the supplier to supply those or similar services, or those or similar properties and services, together in the ordinary course of the business of the supplier, and

(d) the total of all amounts, each of which would be the consideration for a financial service so supplied if that financial service had been supplied separately, is greater than 50% of the total of all amounts, each of which would be the consideration for a service or property so supplied if that service or property had been supplied separately,

the supply of each of the services and properties shall be deemed to be a supply of a financial service.

1990, c. 45, s. 12; 1993, c. 27, s. 16.

Supply of membership with security

140. For the purposes of this Part, where

(a) a person makes a supply of a share, bond, debenture or other security (other than a share in a credit union or in a cooperative corporation the main purpose of which is not to provide dining, recreational or sporting facilities) that represents capital stock or debt of a particular organization, and

(b) ownership of the security by the recipient of the supply is a condition of the recipient's, or another person's, obtaining a membership, or a right to acquire a membership, in the particular organization or in another organization that is related to the particular organization,

the supply of the security shall be deemed to be a supply of a membership and not a supply of a financial service.

1990, c. 45, s. 12; 1993, c. 27, s. 17.

Use in commercial activities

141. (1) For the purposes of this Part, where substantially all of the consumption or use of property or a service by a person, other than a financial institution, is in the course of the person's commercial activities, all of the consumption or use of the property or service by the person shall be deemed to be in the course of those activities.

Intended use in commercial activities

(2) For the purposes of this Part, where substantially all of the consumption or use for which a person, other than a financial institution, acquires or imports property or a service or brings it into a participating province is in the course of the person's commercial activities, all of the consumption or use for which the person acquired or imported the property or service or brought it into the province, as the case may be, is deemed to be in the course of those activities.

Use in other activities

(3) For the purposes of this Part, where substantially all of the consumption or use of property or a service by a person, other than a financial institution, is in the course of particular activities of the person that are not commercial activities, all of the consumption or use of the property or service by the person shall be deemed to be in the course of those particular activities.

Intended use in other activities

(4) For the purposes of this Part, where substantially all of the consumption or use for which a person, other than a financial institution, acquires or imports property or a service or brings it into a participating province is in the course of particular activities of the person that are not commercial activities, all of the consumption or use for which the person acquired or imported the property or service or brought it into the province, as the case may be, is deemed to be in the course of those particular activities.

Real property that includes residential complex

(5) For the purposes of subsections (1) to (4), where real property includes a residential complex and another part that is not part of the residential complex,

(a) the residential complex and the other part shall each be deemed to be a separate property; and

(b) where property or a service is acquired, imported or brought into a participating province for consumption or use in relation to the real property, subsections (1) to (4) apply to the property or service only to the extent it is acquired, imported or brought into the province, as the case may be, for consumption or use in relation to the part that is not part of the residential complex.

1990, c. 45, s. 12; 1993, c. 27, s. 18; 1997, c. 10, s. 155.

Meaning of "endeavour"

141.01 (1) In this section, "endeavour" of a person means

(a) a business of the person;

(b) an adventure or concern in the nature of trade of the person; or

(c) the making of a supply by the person of real property of the person, including anything done by the person in the course of or in connection with the making of the supply.

Meaning of "consideration"

(1.1) In subsections (1.2), (2) and (3), "consideration" does not include nominal consideration.

Grants and subsidies

(1.2) Where a registrant receives an amount that is not consideration for a supply and is a grant, subsidy, forgivable loan or other form of assistance provided by a person who is

(a) a government, a municipality or a band (within the meaning assigned by section 2 of the Indian Act),

(b) a corporation that is controlled by a person referred to in paragraph (a) and one of the main purposes of which is to provide such assistance, or

(c) a trust, board, commission or other body that is established by a person referred to in paragraph (a) or (b) and one of the main purposes of which is to provide such assistance,

and the assistance can reasonably be considered to be provided for the purpose of funding an activity of the registrant that involves the making of taxable supplies for no consideration, the amount is, for the purposes of this section, deemed to be consideration for those supplies.

Acquisition for purpose of making supplies

(2) Where a person acquires or imports property or a service or brings it into a participating province for consumption or use in the course of an endeavour of the person, the person shall, for the purposes of this Part, be deemed to have acquired or imported the property or service or brought it into the province, as the case may be,

(a) for consumption or use in the course of commercial activities of the person, to the extent that the property or service is acquired, imported or brought into the province by the person for the purpose of making taxable supplies for consideration in the course of that endeavour; and

(b) for consumption or use otherwise than in the course of commercial activities of the person, to the extent that the property or service is acquired, imported or brought into the province by the person

(i) for the purpose of making supplies in the course of that endeavour that are not taxable supplies made for consideration, or

(ii) for a purpose other than the making of supplies in the course of that endeavour.

Use for purpose of making supplies

(3) Where a person consumes or uses property or a service in the course of an endeavour of the person, that consumption or use shall, for the purposes of this Part, be deemed to be

(a) in the course of commercial activities of the person, to the extent that the consumption or use is for the purpose of making taxable supplies for consideration in the course of that endeavour; and

(b) otherwise than in the course of commercial activities of the person, to the extent that the consumption or use is

(i) for the purpose of making supplies in the course of that endeavour that are not taxable supplies made for consideration, or

(ii) for a purpose other than the making of supplies in the course of that endeavour.

Free supplies

(4) Where

(a) a supplier makes a taxable supply (in this subsection referred to as a "free supply") of property or a service for no consideration or nominal consideration in the course of a particular endeavour of the supplier, and

(b) it can reasonably be regarded that among the purposes (in this subsection referred to as the "specified purposes") for which the free supply is made is the purpose of facilitating, furthering or promoting

(i) the acquisition, consumption or use of other property or services by any other person, or

(ii) an endeavour of any person,

the following rules apply:

(c) to the extent that the supplier acquired or imported a particular property or service or brought it into a participating province for the purpose of making the free supply of that property or service or for consumption or use in the course of making the free supply, the supplier shall be deemed, for the purposes of subsection (2), to have acquired or imported the particular property or service or brought it into the province, as the case may be,

(i) for use in the course of the particular endeavour, and

(ii) for the specified purposes and not for the purpose of making the free supply, and

(d) to the extent that the supplier consumed or used a particular property or service for the purpose of making the free supply, the supplier shall be deemed, for the purposes of subsection (3), to have consumed or used the particular property or service for the specified purposes and not for the purpose of making the free supply.

Method of determining extent of use, etc.

(5) The methods used by a person in a fiscal year to determine

(a) the extent to which properties or services are acquired, imported or brought into a participating province by the person for the purpose of making taxable supplies for consideration or for other purposes, and

(b) the extent to which the consumption or use of properties or services is for the purpose of making taxable supplies for consideration or for other purposes,

shall be fair and reasonable and shall be used consistently by the person throughout the year.

Application to other provisions

(6) Where

(a) a particular provision of this Part, other than subsections (2) to (4), deems certain circumstances or facts to exist, and

(b) that deeming is dependent, in whole or in part, on the particular circumstance that property or a service is or was consumed or used, or acquired, imported or brought into a participating province for consumption or use, to a certain extent in the course of, or otherwise than in the course of, commercial activities or other activities,

that certain extent shall be determined under subsection (2) or (3), as the case requires, for the purpose of determining whether the particular circumstance exists, but where it is so determined that the particular circumstance exists and all other circumstances necessary for the particular provision to apply exist, the deeming by the particular provision shall apply notwithstanding subsections (2) and (3).

Idem

(7) Where a provision of this Part deems the consideration for a supply not to be consideration for the supply, a supply to be made for no consideration or a supply not to have been made by a person, that deeming shall not apply for the purposes of any of subsections (1) to (4).

1994, c. 9, s. 4; 1997, c. 10, ss. 5, 156, 255.

Disposition of personal property

141.1 (1) For the purposes of this Part,

(a) where a person makes a supply (other than an exempt supply) of personal property that

(i) was last acquired or imported by the person, or was brought into a participating province by the person after it was last acquired or imported by the person, for consumption or use in the course of commercial activities of the person or was consumed or used by the person in the course of a commercial activity of the person after it was last acquired or imported by the person, or

(ii) was manufactured or produced by the person in the course of a commercial activity of the person or for consumption or use in the course of a commercial activity of the person, or was manufactured or produced by the person and consumed or used in the course of a commercial activity of the person, and was not deemed under this Part to have been acquired by the person,

the person shall be deemed to have made the supply in the course of the commercial activity; and

(b) where a person makes a supply (other than a supply made by way of lease, licence or similar arrangement in the course of a business of the person) of personal property that

(i) was last acquired or imported by the person exclusively for consumption or use in the course of activities of the person that are not commercial activities, was not brought into a participating province for consumption or use in the course of commercial activities of the person after it was last acquired or imported by the person and was not consumed or used by the person in the course of commercial activities of the person after it was last acquired or imported by the person, or

(ii) was manufactured or produced by the person in the course of activities of the person that are not commercial activities exclusively for consumption or use in the course of activities of the person that are not commercial activities, was not brought into a participating province for consumption or use in the course of commercial activities of the person and was not consumed or used in the course of a commercial activity of the person and was not deemed under this Part to have been acquired by the person,

the person shall be deemed to have made the supply otherwise than in the course of commercial activities.

Disposition of inventory, etc.

(2) For the purposes of this Part,

(a) where a person makes a particular supply by way of sale of personal property or a service that was acquired, imported, brought into a participating province, manufactured or produced by the person exclusively for the purpose of making a supply of that property or service by way of sale in the course of a business of the person or in the course of an adventure or concern of the person in the nature of trade, except where

(i) the particular supply is an exempt supply,

(ii) paragraph (b) applies in respect of the particular supply, or

(iii) the person is an individual or a partnership, all of the members of which are individuals, who carries on the business or engages in the adventure or concern without a reasonable expectation of profit,

the person shall be deemed to have made the particular supply in the course of commercial activities of the person; and

(b) where a person makes a supply by way of sale of personal property or a service that was acquired, imported, manufactured or produced by the person exclusively for the purpose of making an exempt supply of the property or service by way of sale, the person shall be deemed to have made the supply otherwise than in the course of commercial activities.

Acquisition, etc., of activities

(3) For the purposes of this Part,

(a) to the extent that a person does anything (other than make a supply) in connection with the acquisition, establishment, disposition or termination of a commercial activity of the person, the person shall be deemed to have done that thing in the course of commercial activities of the person; and

(b) to the extent that a person does anything (other than make a supply) in connection with the acquisition, establishment, disposition or termination of an activity of the person that is not a commercial activity, the person shall be deemed to have done that thing otherwise than in the course of commercial activities.

1993, c. 27, s. 18; 1997, c. 10, s. 157.

General rule -- in Canada

142. (1) For the purposes of this Part, subject to sections 143, 144 and 179, a supply shall be deemed to be made in Canada if

(a) in the case of a supply by way of sale of tangible personal property, the property is, or is to be, delivered or made available in Canada to the recipient of the supply;

(b) in the case of a supply of tangible personal property otherwise than by way of sale, possession or use of the property is given or made available in Canada to the recipient of the supply;

(c) in the case of a supply of intangible personal property,

(i) the property may be used in whole or in part in Canada, or

(ii) the property relates to real property situated in Canada, to tangible personal property ordinarily situated in Canada or to a service to be performed in Canada;

(d) in the case of a supply of real property or of a service in relation to real property, the real property is situated in Canada;

(e) [Repealed, 1997, c. 10, s. 6]

(f) the supply is a supply of a prescribed service; or

(g) in the case of a supply of any other service, the service is, or is to be, performed in whole or in part in Canada.

General rule--outside Canada

(2) For the purposes of this Part, a supply shall be deemed to be made outside Canada if

(a) in the case of a supply by way of sale of tangible personal property, the property is, or is to be, delivered or made available outside Canada to the recipient of the supply;

(b) in the case of a supply of tangible personal property otherwise than by way of sale, possession or use of the property is given or made available outside Canada to the recipient of the supply;

(c) in the case of a supply of intangible personal property,

(i) the property may not be used in Canada, or

(ii) the property relates to real property situated outside Canada, to tangible personal property ordinarily situated outside Canada or to a service to be performed wholly outside Canada;

(d) in the case of a supply of real property or a service in relation to real property, the real property is situated outside Canada;

(e) [Repealed, 1997, c. 10, s. 6]

(f) the supply is a supply of a prescribed service; or

(g) in the case of a supply of any other service, the service is, or is to be, performed wholly outside Canada.

Mobile and floating homes

(3) For the purposes of this section,

(a) a floating home, and

(b) a mobile home that is not affixed to land

shall each be deemed to be tangible personal property and not real property.

1990, c. 45, s. 12; 1993, c. 27, s. 19; 1997, c. 10, s. 6.

Billing location

142.1 (1) For the purposes of this section, the billing location for a telecommunication service supplied to a recipient is in Canada if

(a) where the consideration payable for the service is charged or applied to an account that the recipient has with a person who carries on the business of supplying telecommunication services and the account relates to a telecommunications facility that is used or is available for use by the recipient to obtain telecommunication services, that telecommunications facility is ordinarily located in Canada; and

(b) in any other case, the telecommunications facility used to initiate the service is located in Canada.

Place of supply of telecommunication service

(2) Notwithstanding section 142 and subject to section 143, for the purposes of this Part, a supply of a telecommunication service is deemed to be made in Canada where

(a) in the case of a telecommunication service of making telecommunications facilities available, the facilities or any part thereof are located in Canada; and

(b) in any other case,

(i) the telecommunication is emitted and received in Canada, or

(ii) the telecommunication is emitted or received in Canada and the billing location for the service is in Canada.

1997, c. 10, s. 7.

Supply by non-resident

143. (1) For the purposes of this Part, a supply of personal property or a service made in Canada by a non-resident person shall be deemed to be made outside Canada, unless

(a) the supply is made in the course of a business carried on in Canada;

(b) at the time the supply is made, the person is registered under Subdivision d of Division V; or

(c) the supply is the supply of an admission in respect of a place of amusement, a seminar, an activity or an event where the non-resident person did not acquire the admission from another person.

(2) [Repealed, 1993, c. 27, s. 20]

1990, c. 45, s. 12; 1993, c. 27, s. 20.

Supply by mail or courier

143.1 Notwithstanding subsections 142(2) and 143(1), for the purposes of this Part, a supply of prescribed tangible personal property made by a person who is registered under Subdivision d of Division V shall be deemed to be made in Canada if the property is sent, by mail or courier, to the recipient of the supply at an address in Canada.

1993, c. 27, s. 21.

Supply before release

144. For the purposes of this Part, a supply of goods that have been imported in compliance with the Customs Act or any other Act of Parliament that prohibits, controls or regulates the importation of goods, but have not been released before the goods are delivered or made available in Canada to the recipient of the supply, shall be deemed to be made outside Canada.

1990, c. 45, s. 12.

Property in transit

144.01 For the purposes of this Part (other than sections 4, 15.3 and 15.4 of Part V of Schedule VI), if a continuous transmission commodity is transported by means of a wire, pipeline or other conduit

(a) outside Canada in the course of, and solely for the purpose of, being delivered by that means from a place in Canada to another place in Canada,

(b) in Canada in the course of, and solely for the purpose of, being delivered by that means from a place outside Canada to another place outside Canada,

(c) from a place in Canada to a place outside Canada where it is stored or taken up as surplus for a period until further transported by that means to a place in Canada in the same measure and state except to the extent of any consumption or alteration necessary or incidental to its transportation, or

(d) from a place outside Canada to a place in Canada where it is stored or taken up as surplus for a period until further transported by that means to a place outside Canada in the same measure and state except to the extent of any consumption or alteration necessary or incidental to its transportation,

the commodity is deemed not to be exported or imported in the course of that transportation or further transportation.

2000, c. 30, s. 21.

Supply in a province

144.1 For the purposes of this Part, a supply is deemed to be made in a province if it is made in Canada and is, under the rules set out in Schedule IX, made in the province, but is deemed to be made outside the province in any other case and a supply made in Canada that is not made in any participating province is deemed to be made in a non-participating province.

1997, c. 10, s. 158.

145. [Repealed, 1997, c. 10, s. 8]

Supplies by governments and municipalities

146. For the purposes of this Part, the following supplies, when made for consideration by a government or municipality or a board, commission or other body established by a government or municipality, shall, for greater certainty, be deemed to be made in the course of a commercial activity, except where the supply is an exempt supply:

(a) a supply of a service of testing or inspecting any property for the purpose of verifying or certifying that the property meets particular standards of quality or is suitable for consumption, use or supply in a particular manner;

(b) a supply to a consumer of a right to hunt or fish;

(c) a supply of a right to take or remove forestry products, products that grow in water, fishery products, minerals or peat, where the supply is made to

(i) a consumer, or

(ii) a person who is not a registrant and who acquires the right in the course of a business of the person of making supplies of the products, minerals or peat to consumers;

(d) a supply of a licence, permit, quota or similar right in respect of the importation of alcoholic beverages; and

(e) a supply of a right to enter, to have access to or to use property of the government, municipality or other body.

1990, c. 45, s. 12; 1993, c. 27, s. 22.

147. [Repealed, 1994, c. 9, s. 5]

Small Suppliers

Small suppliers

148. (1) For the purposes of this Part, a person is a small supplier throughout a particular calendar quarter and the first month immediately following the particular calendar quarter if

(a) the total of all amounts each of which is the value of the consideration (other than consideration referred to in section 167.1 that is attributable to goodwill of a business) that became due in the four calendar quarters immediately preceding the particular calendar quarter, or that was paid in those four calendar quarters without having become due, to the person or an associate of the person at the beginning of the particular calendar quarter for taxable supplies (other than supplies of financial services and supplies by way of sale of capital property of the person or associate) made inside or outside Canada by the person or associate

does not exceed the total of

(b) $30,000 or, where the person is a public service body, $50,000, and

(c) where, in the four calendar quarters immediately preceding the particular calendar quarter, the person or an associate of the person at the beginning of the particular calendar quarter made a taxable supply of a right to participate in a game of chance or is deemed, under section 187, to have made a supply in respect of a bet and the supply is a taxable supply, the total of all amounts each of which is

(i) an amount of money paid or payable by the person or the associate as a prize or winnings in the game or in satisfaction of the bet, or

(ii) consideration paid or payable by the person or the associate for property or a service that is given as a prize or winnings in the game or in satisfaction of the bet.

Exception

(2) Notwithstanding subsection (1), where at any time in a calendar quarter

(a) the total of all amounts each of which is the value of the consideration (other than consideration referred to in section 167.1 that is attributable to goodwill of a business) that became due in the calendar quarter, or that was paid in that calendar quarter without having become due, to a person or an associate of the person at the beginning of the calendar quarter for taxable supplies (other than supplies of financial services and supplies by way of sale of capital property of the person or associate) made inside or outside Canada by the person or associate

exceeds the total of

(b) $30,000 or, where the person is a public service body, $50,000, and

(c) where, in the calendar quarter, the person or an associate of the person at the beginning of the calendar quarter made a taxable supply of a right to participate in a game of chance or is deemed, under section 187, to have made a supply in respect of a bet and the supply is a taxable supply, the total of all amounts each of which is

(i) an amount of money paid or payable by the person or the associate as a prize or winnings in the game or in satisfaction of the bet, or

(ii) consideration paid or payable by the person or the associate for property or a service that is given as a prize or winnings in the game or in satisfaction of the bet,

the person is not a small supplier throughout the period beginning immediately before that time and ending on the last day of the calendar quarter.

Application

(3) This section does not apply to a non-resident person who makes a supply in Canada of admissions in respect of a place of amusement, a seminar, an activity or an event and whose only business carried on in Canada is the making of such supplies.

Meaning of "associate"

(4) In this section, "associate" of a particular person at any time means another person who is associated at that time with the particular person.

1990, c. 45, s. 12; 1993, c. 27, s. 23; 1997, c. 10, s. 9.

Meaning of "gross revenue"

148.1 (1) In this section, "gross revenue" of a person for a fiscal year of the person means the amount, if any, by which

(a) the total of all amounts each of which is

(i) a gift that is received or becomes receivable (depending on the method, in this paragraph referred to as the "accounting method", followed by the person in determining the person's revenue for the year) by the person during the fiscal year,

(ii) a grant, subsidy, forgivable loan or other assistance (other than a refund or rebate of, or credit in respect of, taxes, duties or fees imposed by an Act of Parliament or the legislature of a province) in the form of money that is received or becomes receivable (depending on the accounting method) by the person during the fiscal year from a government, municipality or other public authority,

(iii) revenue that is or would be, if the person were a taxpayer under the Income Tax Act, included for the purposes of that Act in determining the person's income for the fiscal year from property, a business, an adventure or concern in the nature of trade or other source and that is not included in subparagraph (ii),

(iv) an amount that is or would be, if the person were a taxpayer under the Income Tax Act, a capital gain for the fiscal year for the purposes of that Act from the disposition of property of the person, or

(v) other revenue of any kind whatever (other than an amount that is or would be, if the person were a taxpayer under the Income Tax Act, included in determining the amount of a capital gain or loss of the person for the purposes of that Act) that is received or becomes receivable (depending on the accounting method) by the person during the fiscal year,

and that is not included in determining the total under this paragraph for a preceding fiscal year of the person,

exceeds

(b) the total of all amounts each of which is or would be, if the person were a taxpayer under the Income Tax Act, a capital loss for the fiscal year for the purposes of that Act from the disposition of property of the person.

Charity and public institution as small supplier

(2) For the purposes of this Part, a person that is a charity or a public institution at any time in a particular fiscal year of the person is a small supplier throughout the particular fiscal year if

(a) the particular fiscal year is the first fiscal year of the person;

(b) the particular fiscal year is the second fiscal year of the person and the gross revenue of the person for the first fiscal year of the person was $250,000 or less; or

(c) the particular fiscal year is not the first or second fiscal year of the person and the gross revenue of the person for either of the two fiscal years of the person immediately preceding the particular fiscal year was $250,000 or less.

1994, c. 9, s. 6; 1997, c. 10, s. 10.

Financial Institutions

Financial institutions

149. (1) For the purposes of this Part, a person is a financial institution throughout a particular taxation year of the person if

(a) the person is

(i) a bank,

(ii) a corporation that is licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as a trustee,

(iii) a person whose principal business is as a trader or dealer in, or as a broker or salesperson of, financial instruments or money,

(iv) a credit union,

(v) an insurer or any other person whose principal business is providing insurance under insurance policies,

(vi) a segregated fund of an insurer,

(vii) the Canada Deposit Insurance Corporation,

(viii) a person whose principal business is the lending of money or the purchasing of debt securities or a combination thereof,

(ix) an investment plan,

(x) a person providing services referred to in section 158, or

(xi) a corporation deemed under section 151 to be a financial institution,

at any time in the particular year;

(b) the total (in this section referred to as the "financial revenue") of all amounts each of which is an amount that is interest, a dividend (other than a dividend in kind or a patronage dividend) or a separate fee or charge for a financial service and that is included in computing, for the purposes of the Income Tax Act, the person's income, or, if the person is an individual, the person's income from a business, for the taxation year of the person preceding the particular year exceeds the greater of

(i) 10% of the total of

(A) the amount that would, but for subsection (4), be the financial revenue, and

(B) the total of all consideration that became due in that preceding taxation year, or that was paid in that preceding taxation year without having become due, to the person for supplies (other than supplies by way of sale of capital property of the person and supplies of financial services that are not zero-rated supplies described by section 3 of Part IX of Schedule VI) made by the person, and

(ii) the amount determined by the formula

 $10,000,000 x A/365

where

A is the number of days in that preceding taxation year; or

(c) the total of all amounts each of which is an amount that is included in computing, for the purposes of that Act, the person's income, or, where the person is an individual, the person's income from a business, for that preceding taxation year and that is interest, or a separate fee or charge, with respect to

(i) a credit card or charge card issued by the person, or

(ii) the making of an advance, the lending of money or the granting of credit

exceeds

(iii) the amount determined by the formula

 $1,000,000 x A/365

where

A is the number of days in that preceding taxation year.

Amalgamations

(2) For the purposes of this Part, where

(a) at any time two or more corporations (in this subsection referred to as the "predecessors") are merged or amalgamated to form one corporation (in this subsection referred to as the "new corporation"), and

(b) the principal business of the new corporation immediately after that time is the same as or similar to the business of one or more of the predecessors that immediately before that time was a financial institution,

the new corporation is a financial institution throughout the taxation year of the new corporation that began at that time.

Acquisition of business

(3) For the purposes of this Part, where

(a) a particular person, at any time in a taxation year of the particular person, acquires a business as a going concern from another person who was immediately before that time a financial institution, and

(b) immediately after that time the principal business of the particular person is the business so acquired,

the particular person is a financial institution throughout the part of that taxation year that is after that time.

Exclusion of interest and dividend

(4) In determining a total for a person under paragraph (1)(b) or (c), there shall not be included interest, or any dividend, from a corporation related to the person.

Exclusion -- sales of precious metals

(4.01) In determining an amount of financial revenue, there shall not be included a separate fee or charge for a financial service the supply of which is a zero-rated supply described by section 3 of Part IX of Schedule VI.

(4.02) [Repealed, 2000, c. 30, s. 22]

Charities, municipalities, etc.

(4.1) Paragraphs (1)(b) and (c) do not apply for the purpose of determining if a person is a financial institution throughout a particular taxation year where the person is

(a) at the beginning of the particular year,

(i) a charity, municipality, school authority, hospital authority, public college or university, or

(ii) a non-profit organization that operated, otherwise than for profit, a health care facility within the meaning of paragraph (c) of the definition of that expression in section 1 of Part II of Schedule V; or

(b) on the last day of the taxation year of the person preceding the particular year, a qualifying non-profit organization (within the meaning of subsection 259(2)).

Meaning of "investment plan"

(5) In this section, "investment plan" means

(a) a trust governed by

(i) a registered pension plan,

(ii) an employees profit sharing plan,

(iii) a registered supplementary unemployment benefit plan,

(iv) a registered retirement savings plan,

(v) a deferred profit sharing plan,

(vi) a registered education savings plan,

(vii) a registered retirement income fund,

(viii) an employee benefit plan,

(ix) an employee trust,

(x) a mutual fund trust,

(xi) a pooled fund trust,

(xii) a unit trust, or

(xiii) a retirement compensation arrangement,

as each of those terms is defined for the purposes of the Income Tax Act or the Income Tax Regulations;

(b) an investment corporation, as that term is defined for the purposes of that Act;

(c) a mortgage investment corporation, as that term is defined for the purposes of that Act;

(d) a mutual fund corporation, as that term is defined for the purposes of that Act;

(e) a non-resident owned investment corporation, as that term is defined for the purposes of that Act; and

(f) a corporation exempt from tax under that Act by reason of paragraph 149(1)(o.1) or (o.2) of that Act.

1990, c. 45, s. 12; 1993, c. 27, s. 24; 1997, c. 10, s. 11; 2000, c. 30, s. 22.

Election for exempt supplies

150. (1) For the purposes of this Part, where at any time a person who is a member of a closely related group of which a listed financial institution is a member files an election made jointly by the person and a corporation that is also a member of the group at that time, every supply between the person and the corporation of property by way of lease, licence or similar arrangement or of a service that is made at a time when the election is in effect and that would, but for this subsection, be a taxable supply is deemed to be a supply of a financial service.

Exception

(2) Subsection (1) does not apply to an imported taxable supply (within the meaning assigned by section 217) or to property held or services rendered by a member of a closely related group as a participant in a joint venture with another person at a time when an election under section 273 between the member and the other person is in effect.

Form and manner of filing

(3) An election under subsection (1) relating to supplies between a member of a closely related group and a corporation shall

(a) be made in prescribed form containing prescribed information;

(b) specify the day the election is to become effective; and

(c) be filed by the member with the Minister in prescribed manner on or before the day on or before which a return under Division V for the reporting period of the member in which the election is to become effective is required to be filed.

Effect of election

(4) An election under subsection (1) shall be effective for the period beginning on the day specified in the election and ending on the earliest of

(a) the day either member ceases to be a member of the closely related group,

(b) the first day the closely related group does not include a listed financial institution (other than a person that is a financial institution only by reason of section 151), and

(c) a day that the members specify in a notice of revocation in prescribed form containing prescribed information filed jointly by the members with the Minister in prescribed manner, which day is at least three hundred and sixty-five days after the day specified in the election.

Subsequent elections

(5) Where an election made under subsection (1) jointly by a member of a closely related group and a corporation ceases to be effective, the member and the corporation shall not thereafter make an election jointly under subsection (1) without the written concurrence of the Minister.

Credit unions deemed to have elected

(6) For the purposes of this Part,

(a) every credit union shall be deemed to be at all times a member of a closely related group of which every other credit union is a member;

(b) every credit union shall be deemed to have made an election under subsection (1) with every other credit union that is in effect at all times; and

(c) every supply of tangible personal property by a credit union, other than a capital property of the credit union, to another credit union shall be deemed to be a supply of a financial service.

(d) [Repealed, 1993, c. 27, s. 25]

Mutual insurance group -- deemed election

(7) For the purposes of this Part, every member of a mutual insurance group shall be deemed

(a) to be at all times a member of a closely related group of which every other member of the mutual insurance group is a member; and

(b) to have made, with every other member of the group, an election under subsection (1) that is in effect at all times.

1990, c. 45, s. 12; 1993, c. 27, s. 25; 1997, c. 10, s. 12.

Effect of election under subsection 150(1)

151. For the purposes of this Part, where a corporation that is a member of a closely related group has made an election under subsection 150(1), the corporation shall be deemed to be a financial institution throughout the period during which the election is in effect.

1990, c. 45, s. 12.

Consideration

When consideration due

152. (1) For the purposes of this Part, the consideration, or a part thereof, for a taxable supply shall be deemed to become due on the earliest of

(a) the earlier of the day the supplier first issues an invoice in respect of the supply for that consideration or part and the date of that invoice,

(b) the day the supplier would have, but for an undue delay, issued an invoice in respect of the supply for that consideration or part, and

(c) the day the recipient is required to pay that consideration or part to the supplier pursuant to an agreement in writing.

Consideration under leases, etc.

(2) Notwithstanding subsection (1), where property is supplied by way of lease, licence or similar arrangement under an agreement in writing, the consideration, or any part thereof, for the supply shall, for the purposes of this Part, be deemed to become due on the day the recipient is required to pay the consideration or part to the supplier pursuant to the agreement.

Payment

(3) For the purposes of this Part, where consideration that is not money is given or required to be given, the consideration that is given or required to be given shall be deemed to be paid or required to be paid, as the case may be.

1990, c. 45, s. 12.

Value of consideration

153. (1) Subject to this Division, the value of the consideration, or any part thereof, for a supply shall, for the purposes of this Part, be deemed to be equal to

(a) where the consideration or that part is expressed in money, the amount of the money; and

(b) where the consideration or that part is other than money, the fair market value of the consideration or that part at the time the supply was made.

Combined consideration

(2) For the purposes of this Part, where

(a) consideration is paid for a supply and other consideration is paid for one or more other supplies or matters, and

(b) the consideration for one of the supplies or matters exceeds the consideration that would be reasonable if the other supply were not made or the other matter were not provided,

the consideration for each of the supplies and matters shall be deemed to be that part of the total of all amounts, each of which is consideration for one of those supplies or matters, that may reasonably be attributed to each of those supplies and matters.

Barters between registrants

(3) Where

(a) the consideration or a part of the consideration for a supply of property of a particular class or kind is property of that class or kind,

(b) both the supplier and the recipient are registrants, and

(c) the property is acquired by the recipient and the consideration or that part thereof is acquired by the supplier as inventory for use exclusively in commercial activities of the recipient or supplier, as the case may be,

the value of the consideration or that part thereof shall be deemed to be nil.

Used tangible personal property trade-ins

(4) Where, at the time a supplier makes a supply of tangible personal property to a recipient, the supplier accepts, in full or partial consideration for the supply, other property (in this subsection and subsection (5) referred to as the "trade-in") that

(a) is used tangible personal property or a leasehold interest therein, and

(b) is acquired for consumption, use or supply in the course of a commercial activity of the supplier,

and the recipient is not required to collect tax in respect of the supply of the trade-in, the value of the consideration for the supply made by the supplier is deemed, for the purposes of this Part, to be equal to the amount, if any, by which the value of the consideration for that supply (as otherwise determined under this Part) exceeds

(c) except where paragraph (d) applies, the amount credited to the recipient in respect of the trade-in, and

(d) where the supplier and the recipient are not dealing with each other at arm's length at the time the supply is made and the amount credited to the recipient in respect of the trade-in exceeds the fair market value of the trade-in at the time ownership thereof is transferred to the supplier, that fair market value.

Sale-leaseback arrangements

(4.1) For the purposes of this Part, if

(a) a person (in this subsection and subsections (4.2) to (4.5) referred to as the "lessee") makes a supply by way of sale of tangible personal property to another person (in this subsection referred to as the "lessor"),

(b) the lessee is not required to collect tax in respect of that supply, and

(c) the lessor immediately makes a taxable supply by way of lease of the property to the lessee under an agreement (in this subsection and subsections (4.2) to (4.5) referred to as the "original leaseback agreement"),

the value of the consideration for a supply of the property by way of lease that, at a particular time, becomes due or is paid without having become due under a particular agreement that is the original leaseback agreement or a subsequent lease in respect of that agreement is deemed to be equal to the amount determined by the formula

A - B

where

A is the value of that consideration as otherwise determined under this Part, and

B is the amount (in this subsection referred to as the "purchase credit") that is equal to the least of

(i) the value of A,

(ii) the amount determined by the formula

B1/B2

where

B1 is the amount (in this subsection and subsection (4.5) referred to as the "unused total purchase credit"), if any, by which the consideration for the supply by way of sale exceeds the total of all amounts each of which is the purchase credit that was determined in calculating the amount deemed under this subsection to be the value of any consideration that, before the particular time, became due or was paid without having become due under the original leaseback agreement or a subsequent lease in respect of that agreement, and

B2 is the specified number of remaining lease payments under the particular agreement at the particular time, and

(iii) if there is no unused total purchase credit, zero.

Meaning of "specified number of remaining lease payments"

(4.2) In subsection (4.1), the "specified number of remaining lease payments", at a particular time, in respect of a particular agreement for the supply of property by way of lease that is an original leaseback agreement or a subsequent lease in respect of that agreement, is the amount determined by the formula

A - B

where

A is the total number of payments that the lessee was obligated to make as consideration for the supplies of the property by way of lease under the particular agreement based on the terms of that agreement at the time it was entered into; and

B is the total number of the payments referred to in the description of A that, before the particular time, became due or were paid by the lessee.

Meaning of "subsequent lease"

(4.3) In subsections (4.1) to (4.5), "subsequent lease", in respect of an original leaseback agreement for the supply by way of lease of property to a lessee, means

(a) an agreement for the supply by way of lease of the property that constitutes a new agreement between the lessee and an assignee of the rights and obligations of the person who is the supplier under the original leaseback agreement or under an agreement referred to in this paragraph or in paragraph (b); or

(b) an agreement for the supply of the property to the lessee by way of lease that succeeds, as a new agreement, either the original leaseback agreement or a particular agreement referred to in paragraph (a) or in this paragraph upon a renewal or variation of that original leaseback agreement or particular agreement.

Deemed subsequent lease

(4.4) For the purposes of subsections (4.1), (4.2) and (4.5), if a supplier agrees, at any time, to renew, vary, terminate (otherwise than upon the exercise of an option to purchase) or assign a particular agreement for the supply of property to a lessee by way of lease that is an original leaseback agreement or a subsequent lease in respect of that agreement and the renewal, variation, termination or assignment does not constitute a novation of the particular agreement but has the effect of changing the number of payments that the lessee is obligated to make for supplies by way of lease of the property under the particular agreement,

(a) the supplier and lessee are deemed to have, at that time, entered into a subsequent lease in respect of the original leaseback agreement; and

(b) all supplies by way of lease for which consideration becomes due, or is paid without having become due, at or after the time the renewal, variation, termination or assignment takes effect that would, but for this subsection, be made under the particular agreement are deemed to be made under that subsequent lease and not under the particular agreement.

Exercise of option to purchase

(4.5) For the purposes of this Part other than a purpose referred to in paragraph (5)(a), if

(a) a supply by way of sale of property is made to a lessee on the exercise by the lessee of an option to purchase the property provided for in an original leaseback agreement entered into by the lessee in respect of the property, or in a subsequent lease in respect of that agreement, to which subsection (4.1) applied, and

(b) immediately before the earliest time at which consideration for the supply becomes due or is paid without having become due, there is an unused total purchase credit in respect of the property,

the following rules apply:

(c) the value of the consideration for the supply is deemed to be equal to the amount determined by the formula

A - B

where

A is the value of that consideration as otherwise determined under this Part, and

B is that unused total purchase credit, and

(d) subsection (4.1) does not apply to any consideration that, after that earliest time, becomes due or is paid without having become due for any supply by way of lease of the property that was made under the original leaseback agreement or under a subsequent lease in respect of that agreement.

Non-arm's length supplies

(4.6) For the purposes of subsection (4.1), if a person makes a supply by way of sale of property to a recipient with whom the person is not dealing at arm's length and the consideration for the supply exceeds the fair market value of the property at the time ownership of the property is transferred to the recipient, the consideration for the supply is deemed to be equal to that fair market value.

Exception

(5) Subsections (4) and (4.1) do not apply

(a) for the purpose of determining, for the purposes of any provision of this Part or any Schedule to this Act other than Schedules I to IV, whether the value of consideration for a supply of property equals, exceeds or is less than another amount specified in the provision;

(b) for the purposes of section 148 or 249; or

(c) if the supply of the trade-in, or the supply by way of sale referred to in paragraph (4.1)(a), as the case may be, is

(i) a zero-rated supply,

(ii) a supply made outside Canada, or

(iii) a supply in respect of which no tax is payable because of subsection 156(2) or paragraph 167(1.1)(a).

Exchange of natural gas liquids for make-up gas

(6) For the purposes of this Part, if

(a) natural gas is transported by pipeline to a straddle plant at which natural gas liquids or ethane (each of which is, in this subsection, referred to as "natural gas liquids") is recovered from the natural gas,

(b) the residue gas is returned to the pipeline after the recovery along with other natural gas (in this subsection referred to as "make-up gas") that is supplied solely to make up for the loss of energy content due to the recovery, and

(c) the consideration or a part of the consideration for any supply of the natural gas liquids (or the right to recover the liquids) or any supply of the make-up gas is

(i) in the case of a supply of the natural gas liquids or the right to recover the liquids, the make-up gas, and

(ii) in the case of a supply of the make-up gas, the natural gas liquids or the right to recover the liquids,

the value of that consideration or part, as the case may be, is deemed to be nil.

1990, c. 45, s. 12; 1997, c. 10, s. 13; 2000, c. 30, s. 23.

Meaning of "provincial levy"

154. (1) In this section, "provincial levy" means a tax, duty or fee imposed under an Act of the legislature of a province in respect of the supply, consumption or use of property or a service.

Levies included in consideration

(2) For the purposes of this Part, the consideration for a supply of property or a service includes

(a) any tax, duty or fee imposed under an Act of Parliament that is payable by the recipient, or payable or collectible by the supplier, in respect of that supply or in respect of the production, importation, consumption or use of the property or service, other than tax under this Part that is payable by the recipient;

(b) any provincial levy that is payable by the recipient, or payable or collectible by the supplier, in respect of that supply or in respect of the consumption or use of the property or service, other than a prescribed provincial levy that is payable by the recipient; and

(c) any other amount that is collectible by the supplier under an Act of the legislature of a province and that is equal to, or is collectible on account of or in lieu of, a provincial levy, except where the amount is payable by the recipient and the provincial levy is a prescribed provincial levy.

Reference to "recipient"

(3) If, under this Part, a person is deemed to be the recipient of a supply in respect of which another person would, but for that deeming, be the recipient, a reference in this section to the recipient of the supply shall be read as a reference to that other person.

1990, c. 45, s. 12; 1997, c. 10, s. 14; 2000, c. 30, s. 24.

Non-arm's length supplies

155. (1) For the purposes of this Part, where a supply of property or a service is made between persons not dealing with each other at arm's length for no consideration or for consideration less than the fair market value of the property or service at the time the supply is made, and the recipient of the supply is not a registrant who is acquiring the property or service for consumption, use or supply exclusively in the course of commercial activities of the recipient,

(a) if no consideration is paid for the supply, the supply shall be deemed to be made for consideration, paid at that time, of a value equal to the fair market value of the property or service at that time; and

(b) if consideration is paid for the supply, the value of the consideration shall be deemed to be equal to the fair market value of the property or service at that time.

Exception

(2) Subsection (1) does not apply to a supply of property or a service by a person where

(a) an amount is deemed under section 173 to be the total consideration for the supply; or

(b) in the absence of subsection (1),

(i) the person, because of subsection 170(1), would not be entitled to claim an input tax credit in respect of the acquisition or importation of the property or service by the person,

(ii) subsection 172(2) would apply to the supply, or

(iii) the supply would be an exempt supply included in Part V.1 or VI of Schedule V.

1990, c. 45, s. 12; 1993, c. 27, s. 26; 1997, c. 10, s. 15.

Definitions

156. (1) The definitions in this subsection apply in this section.

"Canadian partnership" « société de personnes canadienne »

"Canadian partnership" means a partnership each member of which is a corporation or partnership and is resident in Canada.

"qualifying group" « groupe admissible »

"qualifying group" means

(a) a closely related group; or

(b) a group of Canadian partnerships, or of Canadian partnerships and corporations resident in Canada, each member of which is closely related, within the meaning of this section, to each other member of the group.

"secured creditor" [Repealed, 2000, c. 30, s. 25]

"security interest" [Repealed, 2000, c. 30, s. 25]

"specified member" « membre déterminé »

"specified member" of a qualifying group means a person that is a corporation or a partnership and

(a) that is a member of the group;

(b) that is not a party to an election under subsection 150(1); and

(c) all or substantially all of the property of which (other than financial instruments) was last manufactured, produced, acquired or imported by the person for consumption, use or supply exclusively in the course of commercial activities of the person or, if the person has no property (other than financial instruments), all or substantially all of the supplies made by which are taxable supplies.

Closely related persons

(1.1) For the purposes of this section, a particular Canadian partnership and another person that is a Canadian partnership or a corporation resident in Canada are closely related to each other at any time if, at that time, the particular partnership and the other person are registrants and

(a) if the other person is a Canadian partnership,

(i) all or substantially all of the interest in the other person is held by

(A) the particular partnership,

(B) a corporation resident in Canada, or a Canadian partnership, that is a member of a qualifying group of which the particular partnership is a member, or

(C) any combination of corporations or partnerships referred to in clauses (A) and (B), or

(ii) the particular partnership

(A) owns at least 90% of the value and number of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of a corporation resident in Canada that is a member of a qualifying group of which the other person is a member, or

(B) holds all or substantially all of the interest in a Canadian partnership that is a member of a qualifying group of which the other person is a member; and

(b) if the other person is a corporation,

(i) not less than 90% of the value and number of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of the other person are owned by

(A) the particular partnership,

(B) a corporation resident in Canada, or a Canadian partnership, that is a member of a qualifying group of which the particular partnership is a member, or

(C) any combination of corporations or partnerships referred to in clauses (A) and (B),

(ii) not less than 90% of the value and number of the issued and outstanding shares, having full voting rights under all circumstances, of the capital stock of a corporation resident in Canada are owned by,

(A) if the corporation is a member of a qualifying group of which the particular partnership is a member, the other person, and

(B) if the corporation is a member of a qualifying group of which the other person is a member, the particular partnership,

(iii) all or substantially all of the interest in the particular partnership is held by

(A) the other person,

(B) a corporation resident in Canada, or a Canadian partnership, that is a member of a qualifying group of which the other person is a member, or

(C) any combination of corporations or partnerships referred to in clauses (A) and (B), or

(iv) all or substantially all of the interest in a Canadian partnership is held by

(A) if the Canadian partnership is a member of a qualifying group of which the particular partnership is a member, the other person, and

(B) if the Canadian partnership is a member of a qualifying group of which the other person is a member, the particular partnership.

Persons closely related to the same person

(1.2) If, under subsection (1.1), two persons are closely related to the same corporation or partnership, or would be so related if that corporation, or each member of that partnership, as the case may be, were resident in Canada, the two persons are closely related to each other for the purposes of this section.

Interest in a partnership

(1.3) For the purposes of this section, a person, or a group of persons, holds, at any time, all or substantially all of the interest in a partnership only if, at that time,

(a) the person, or every person in the group of persons, is a member of the partnership; and

(b) the person, or the members of the group collectively, as the case may be, is or are

(i) entitled to receive at least 90% of

(A) if the partnership had income for the last fiscal period (within the meaning of the Income Tax Act) of the partnership that ended before that time (or, if the partnership's first fiscal period includes that time, for that period), the total of all amounts each of which is the share of that income from all sources that each member of the partnership is entitled to receive, or

(B) if the partnership had no income for the last fiscal period or the first fiscal period referred to in clause (A), as the case may be, the total of all amounts each of which is the share of the income of the partnership that each member of the partnership would be entitled to receive if the income of the partnership from each source were one dollar,

(ii) entitled to receive at least 90% of the total amount that would be paid to all members of the partnership (otherwise than as a share of any income of the partnership) if it were wound up at that time, and

(iii) able to direct the business and affairs of the partnership or would be so able if no secured creditor had any security interest in an interest in, or the property of, the partnership.

Election for nil consideration

(2) For the purposes of this Part, if a specified member of a qualifying group elects jointly with another specified member of the group, every taxable supply (other than a supply of property, or of a service, that is not acquired by the recipient of the supply for consumption, use or supply exclusively in the course of commercial activities of the recipient and a supply by way of sale of real property) made between them at a time when the election is in effect is deemed to have been made for no consideration.

Cessation

(3) An election under subsection (2) made jointly by a particular member of a qualifying group and another member of the group ceases to have effect on the earliest of

(a) the day on which the particular member ceases to be a specified member of the group,

(b) the day on which the other member ceases to be a specified member of the group, and

(c) the day on which the election is revoked jointly by those members.

Form of election and revocation

(4) An election under subsection (2) and a revocation of the election shall be made in prescribed form containing prescribed information and shall specify the effective date thereof.

1990, c. 45, s. 12; 1993, c. 27, s. 27; 2000, c. 30, s. 25.

157. [Repealed, 1993, c. 27, s. 28]

Tax refund discounts

158. For the purposes of this Part, where a discounter (within the meaning of the Tax Rebate Discounting Act) pays an amount to a person to acquire from the person a right to a refund of tax (within the meaning of that Act, notwithstanding section 139, the discounter shall be deemed to have made

(a) a taxable supply of a service for consideration equal to the lesser of

(i) 2/3 of the amount, if any, by which the amount of the refund exceeds the amount paid by the discounter to the person to acquire the right, and

(ii) $30; and

(b) a separate supply of a financial service for consideration equal to the amount by which the amount of the refund exceeds the total of the amount paid by the discounter to the person to acquire the right and the amount determined under paragraph (a).

1990, c. 45, s. 12.

Value in Canadian currency

159. Where the consideration for a supply is expressed in a foreign currency, the value of the consideration shall, for the purposes of this Part, be computed on the basis of the value of that foreign currency in Canadian currency on the day the tax is payable, or on such other day as is acceptable to the Minister.

1990, c. 45, s. 12.

Coin-operated devices

160. Where a supply is made, and the consideration therefor is paid, by means of a coin-operated device, the following rules apply for the purposes of this Part:

(a) the recipient shall be deemed to have

(i) received the supply,

(ii) paid the consideration for the supply, and

(iii) paid any tax payable in respect of the supply,

on the day the consideration for the supply is inserted into the device; and

(b) the supplier shall be deemed to have

(i) made the supply,

(ii) received the consideration for the supply, and

(iii) collected any tax payable in respect of the supply,

on the day the consideration for the supply is removed from the device.

1990, c. 45, s. 12.

Early or late payments

161. For the purposes of this Part, where tangible personal property or services are supplied and the amount of consideration for the supply shown in the invoice in respect of the supply may be reduced if the amount thereof is paid within a time specified in the invoice or an additional amount is charged to the recipient by the supplier if the amount of the consideration is not paid within a reasonable period specified in the invoice, the consideration due shall be deemed to be the amount of consideration shown in the invoice.

1990, c. 45, s. 12.

Definitions

162. (1) The definitions in this subsection apply in this section.

"estimated reserves" « réserves estimées »

"estimated reserves" of minerals means the estimated quantities of minerals that geological and engineering data demonstrate, with reasonable certainty, to be recoverable under existing economic and operating conditions.

"farm-out agreement" « accord d'amodiation »

"farm-out agreement" means an agreement referred to in subsection (4).

"natural resource right" « droit relatif à des ressources »

"natural resource right" means

(a) a right to explore for or exploit a mineral deposit;

(b) a right of entry or user relating to a right referred to in paragraph (a); or

(c) a right to an amount computed by reference to the production (including profit) from, or to the value of production from, a mineral deposit.

"specified mining or well-site equipment" « matériel déterminé »

"specified mining or well-site equipment", in relation to the exploration or development of unproven property under a farm-out agreement, means

(a) equipment, installations and structures for use at a mine site in the production of minerals from the mine and not in the milling, smelting, refining or other processing of the minerals after production; and

(b) equipment, installations and structures for use at a well site in the production of minerals from the well, including a heater, dehydrator or other well-site facility for the initial treatment of substances produced from the well to prepare such production for transportation but excluding

(i) any equipment, installation, structure or facility that serves or is intended to serve a well that has not been drilled in the course of the exploration or development under that agreement, and

(ii) any equipment, installation, structure or facility for use in the refining of oil or the processing of natural gas including the separation therefrom of liquid hydrocarbons, sulphur or other joint products or by-products.

"unproven property" « bien non prouvé »

"unproven property" means real property for which estimated reserves of minerals have not been attributed.

Natural resources

(2) For the purposes of this Part, the supply of

(a) a right to explore for or exploit a mineral deposit, a peat bog or deposit of peat or a forestry, water or fishery resource,

(b) a right of entry or user relating to a right referred to in paragraph (a), or

(c) a right to an amount computed by reference to the production (including profit) from, or to the value of production from, any such deposit, bog or resource,

shall be deemed not to be a supply and any consideration paid or due, or any fee or royalty charged or reserved, in respect of the right shall be deemed not to be consideration for the right.

Exception

(3) Subsection (2) does not apply to a supply of a right to take or remove forestry products, products that grow in water, fishery products, minerals or peat, or a right of entry or user relating thereto, where the supply is made to

(a) a consumer; or

(b) a person who is not a registrant and who acquires the right in the course of a business of the person of making supplies of the products, minerals or peat to consumers.

Exploration and development of mineral deposits

(4) For the purposes of this Part, if, under an agreement in writing between a person (in this subsection referred to as the "farmor") and another person (in this subsection referred to as the "farmee"), the farmor transfers to the farmee particular natural resource rights, or portions of them, relating to unproven property in consideration or part consideration for the farmee undertaking the exploration of the property for mineral deposits, providing information (or the right to it) gathered from the exploration and, subject to any conditions that may be provided in the agreement, developing the property for the production of minerals,

(a) the value, as consideration, of any property or service given by the farmor to the farmee under the agreement is deemed to be nil to the extent that the property or service is given as consideration for any of the following (each of which is referred to in this subsection as the "farmee's contribution"):

(i) the undertaking of that exploration or development,

(ii) the provision of that information (or the right to it), and

(iii) any transfer under the agreement by the farmee to the farmor of any interest in specified mining or well-site equipment that is used by the farmee exclusively in that exploration or development;

(b) the value of the farmee's contribution as consideration for any property or service given by the farmor to the farmee under the agreement is deemed to be nil; and

(c) if part of the consideration given by the farmor for the farmee's contribution is a service or property (each of which is referred to in this paragraph as the "farmor's additional contribution") that is not a natural resource right relating to unproven property,

(i) the farmee is deemed to have made, at the place at which the unproven property is situated, a taxable supply of a service to the farmor separate from any supply by the farmee under the agreement and that service is deemed to be consideration for the farmor's additional contribution,

(ii) the value of that service and the value of the farmor's additional contribution as consideration for the supply of that service are each deemed to be equal to the fair market value of the farmor's additional contribution determined at the time (in this paragraph referred to as the "time of transfer") that

(A) if the farmor's additional contribution is a service, performance of the service commences, and

(B) in any other case, ownership of the farmor's additional contribution is transferred to the farmee,

(iii) all of the consideration for the farmor's additional contribution and the consideration for the service deemed to have been supplied by the farmee are deemed to become due at the time of transfer, and

(iv) if, in addition to the farmee's contribution, the farmee supplies to the farmor other property or services (other than the service deemed under subparagraph (i) to have been supplied) for which part of the consideration is the farmor's additional contribution, the value of the consideration for the supply of the other property or services is deemed to be equal to the amount, if any, by which the value of that consideration, determined without reference to this subparagraph, exceeds the fair market value of the farmor's additional contribution.

1990, c. 45, s. 12; 1993, c. 27, s. 29; 2000, c. 30, s. 26.

Rolling stock penalties and demurrage

162.1 For the purposes of this Part, an amount that is paid

(a) as or on account of demurrage, or

(b) by one railway corporation to another railway corporation as or on account of a penalty for failure to return rolling stock within a stipulated time,

shall be deemed not to be consideration for a supply.

1993, c. 27, s. 29.

Consideration for portions of tour package

163. (1) For the purposes of determining tax payable in respect of portions of a tour package, the consideration for a supply of the provincially taxable portion of the tour package or the non-provincially taxable portion of the tour package, as the case may be, (in this subsection referred to as the "relevant portion") is deemed to be

(a) where the supply is made by the first supplier of the tour package, the amount determined by the formula

A x B

where

A is the taxable percentage in respect of the relevant portion at the time the supply is made, and

B is the total consideration for the entire tour package; and

(b) where the supply is made by any other person, the amount determined by the formula

A x B

where

A is the percentage that the consideration for the supply to the person of the relevant portion is of the total consideration paid or payable by the person for the entire tour package, and

B is the total consideration paid or payable to the person for the entire tour package.

Taxable and non-taxable portions

(2) For the purpose of determining tax payable in respect of a tour package and for the purposes of Part VI of Schedule VI, the provision of all that part of the taxable portion of a tour package that is not included in the provincially taxable portions of the tour package and the provision of the part of the tour package that is not included in the taxable portion of the tour package are each deemed to be a supply separate from, and not incidental to, the provision of the remaining parts of the tour package.

Provincially taxable portion

(2.1) For the purpose of determining tax payable in respect of a tour package and for the purposes of Part VI of Schedule VI, the provision of the part of the taxable portion of a tour package that is the provincially taxable portion of the tour package in respect of a participating province is deemed to be a supply made in the participating province that is separate from, and not incidental to, the provision of the other parts, if any, of the tour package and those other parts are deemed to be supplied outside the participating province.

Transition

(2.2) Where a supply of a provincially taxable portion of a tour package in respect of a participating province is made by a supplier who acquired the tour package from another person and was not required to pay tax under subsection 165(2) in respect of the tour package, the supplier is deemed to be the first supplier of the tour package for the purposes of determining the base percentage, initial taxable percentage and taxable percentage, in respect of the provincially taxable portion of the tour package and the non-provincially taxable portion of the tour package.

Definitions

(3) In this section and in Part VI of Schedule VI,

"base fraction" [Repealed, 1997, c. 10, s. 159]

"base percentage" « pourcentage de référence »

"base percentage", at any time, in respect of the provincially taxable portion of a tour package or the non-provincially taxable portion of a tour package, as the case may be, (in this definition referred to as the "relevant portion") means the percentage determined by the formula

A/B

where

A is the part of the amount (in this definition referred to as the "base price") that would be charged by the first supplier of the tour package for a supply at that time of the tour package that is, at that time, reasonably attributable to the relevant portion, and

B is the base price;

"first supplier" «premier fournisseur»

"first supplier" of a tour package means the person who first supplies the package in Canada;

"initial taxable percentage" « pourcentage taxable initial »

"initial taxable percentage" in respect of the provincially taxable portion of a tour package or the non-provincially taxable portion of a tour package, as the case may be, (in this definition referred to as the "relevant portion") means the percentage determined, at the time the first supplier of the tour package first determines the amount (in this definition referred to as the "initial price") to be charged by that supplier for a supply of the tour package, by the formula

A/B

where

A is the part of the initial price that is, at that time, reasonably attributable to the relevant portion, and

B is the initial price;

"non-provincially taxable portion" « partie non taxable au provincial »

"non-provincially taxable portion" of a tour package means all property and services included in the taxable portion of the tour package that are not included in the provincially taxable portions of the tour package;

"provincially taxable portion" « partie taxable au provincial »

"provincially taxable portion" of a tour package, in respect of a participating province, means all property and services that are included in the tour package and the supplies of which, if made otherwise than as part of the tour package, would be supplies made in the participating province in respect of which tax under subsection 165(2) would be payable;

"taxable percentage" « pourcentage taxable »

"taxable percentage", at a particular time, in respect of the provincially taxable portion of a tour package or the non-provincially taxable portion of a tour package, as the case may be, (in this definition referred to as the "relevant portion") means

(a) where the difference between the base percentage at that time in respect of the relevant portion and either the initial taxable percentage in respect of the relevant portion or the base percentage at an earlier time in respect of the relevant portion is more than 10 percentage points, the base percentage at the particular time in respect of the relevant portion, and

(b) in any other case, the initial taxable percentage in respect of the relevant portion;

"taxable portion" «partie taxable»

"taxable portion" of a tour package means all property and services included in the tour package and in respect of which tax under Division II would be payable if the property or service were supplied otherwise than as part of a tour package;

"tour package" «voyage organisé»

"tour package" means a combination of two or more services, or of property and services, that includes transportation services, accommodation, a right to use a campground or trailer park, or guide or interpreter services, where the property and services are supplied together for an all-inclusive price.

1990, c. 45, s. 12; 1997, c. 10, s. 159.

164. [Repealed, 1997, c. 10, s. 16]

Meaning of "feed"

164.1 (1) For the purposes of this section, "feed" means

(a) grain, seed or fodder that is described in section 2 of Part IV of Schedule VI and used as feed for farm livestock that is ordinarily raised or kept to produce, or to be used as, food for human consumption or to produce wool;

(b) feed that is a complete feed, supplement, macro-premix, micro-premix or mineral feed (other than a trace mineral salt feed), the supply of which in bulk quantities of at least 20 kg would be a zero-rated supply included in Part IV of Schedule VI; and

(c) by-products of the food processing industry and plant or animal products, the supply of which in bulk quantities of at least 20 kg would be a zero-rated supply included in Part IV of Schedule VI.

Supplies by a feedlot

(2) For the purposes of this Part, where, in the course of operating a feedlot that is a farming business within the meaning of the Income Tax Act, a person makes a supply of a service and the consideration for the supply (in this subsection referred to as the "total charge") includes a particular amount that is identified in the invoice or agreement in writing for the supply as being attributable to feed,

(a) the provision of the feed shall be deemed to be a supply separate from the supply of the service and not to be incidental to the provision of any other property or service;

(b) the portion, not exceeding 90%, of the total charge that is reasonably attributable to the feed and is included in the particular amount shall be deemed to be the consideration for the supply of the feed; and

(c) the difference between the total charge and the consideration for the supply of the feed shall be deemed to be the consideration for the supply of the service.

1993, c. 27, s. 30; 1994, c. 9, s. 7.

Payments by unions or associations

164.2 For the purposes of this Part, where

(a) an individual, because of membership in a trade union or association referred to in paragraph 189(a), participates in activities of the union or association and, as a consequence, is unable to perform duties, under a contract of employment, for the individual's employer during a period during which the individual would, were it not for the individual's participation in those activities, be obligated to provide such services, and

(b) the union or association pays an amount to the employer as compensation for expenses incurred by the employer as a consequence of the individual's participation in those activities or for remuneration or benefits given by the employer to the individual in respect of that period,

the amount shall be deemed not to be consideration for a supply.

1993, c. 27, s. 30.

DIVISION II
GOODS AND SERVICES TAX

Subdivision a

Imposition of tax

Imposition of goods and services tax

165. (1) Subject to this Part, every recipient of a taxable supply made in Canada shall pay to Her Majesty in right of Canada tax in respect of the supply calculated at the rate of 7% on the value of the consideration for the supply.

Tax in participating province

(2) Subject to this Part, every recipient of a taxable supply made in a participating province shall pay to Her Majesty in right of Canada, in addition to the tax imposed by subsection (1), tax in respect of the supply calculated at the tax rate for that province on the value of the consideration for the supply.

Zero-rated supply

(3) The tax rate in respect of a taxable supply that is a zero-rated supply is 0%.

Application in offshore areas

(4) Subsection (2) does not apply to a supply of property or a service made in the Nova Scotia offshore area or the Newfoundland offshore area unless the supplier makes the supply in the course of an offshore activity or the recipient of the supply acquires the property or service for consumption, use or supply in the course of an offshore activity.

1990, c. 45, s. 12; 1993, c. 27, s. 31; 1997, c. 10, ss. 17, 160.

Pay telephones

165.1 (1) Where the consideration for a supply of a telecommunication service is paid by depositing coins in a coin-operated telephone, the tax payable in respect of the supply is equal to

(a) zero where the amount deposited for the supply does not exceed $0.25; and

(b) in any other case, the total of the amounts computed in accordance with subsections 165(1) and (2), except that where that total is equal to a multiple of $0.05 plus a fraction of $0.05, the fraction

(i) if less than $0.025, may be disregarded for the purposes of this Part, and

(ii) if equal to or greater than $0.025, shall be deemed, for the purposes of this Part, to be an amount equal to $0.05.

Coin-operated devices

(2) Where the consideration for a supply of tangible personal property or a service is paid by depositing a single coin in a mechanical coin-operated device that is designed to accept only a single coin of twenty-five cents or less as the total consideration for the supply and the tangible personal property is dispensed from the device or the service is rendered through the operation of the device, the tax payable in respect of the supply is equal to zero.

1997, c. 10, s. 160.

Calculation of tax on several supplies

165.2 (1) Where two or more taxable supplies are included in an invoice, receipt or agreement and tax under section 165 is imposed in respect of each of those supplies at the same rate or rates, the tax payable in respect of those supplies, calculated on the consideration for those supplies that is included in the invoice, receipt or agreement, may be calculated on the total of that consideration.

Rounding of tax

(2) Where tax that is at any time payable under this Division in respect of one or more supplies included in an invoice, receipt or agreement is an amount that includes a fraction of a cent, the fraction

(a) if less than half of a cent, may be disregarded for the purposes of this Part; and

(b) if equal to or greater than half of a cent, shall be deemed, for the purposes of this Part, to be an amount equal to one cent.

1997, c. 10, s. 160.

Supply by small supplier not a registrant

166. Where a person makes a taxable supply, other than a supply of real property by way of sale, and the consideration or a part thereof for the supply becomes due, or is paid before it becomes due, at a time when the person is a small supplier who is not a registrant, that consideration or part thereof, as the case may be, shall not be included in calculating the tax payable in respect of the supply.

1990, c. 45, s. 12.

Supply of assets of business

167. (1) Where a supplier makes a supply of a business or part of a business that was established or carried on by the supplier or that was established or carried on by another person and acquired by the supplier, and, under the agreement for the supply, the recipient is acquiring ownership, possession or use of all or substantially all of the property that can reasonably be regarded as being necessary for the recipient to be capable of carrying on the business or part as a business,

(a) for the purposes of this Part, the supplier shall be deemed to have made a separate supply of each property and service that is supplied under the agreement for consideration equal to that part of the consideration for the supply of the business or part that can reasonably be attributed to that property or service; and

(b) except where the supplier is a registrant and the recipient is not a registrant, the supplier and the recipient may make a joint election in prescribed form containing prescribed information to have subsection (1.1) apply to those supplies.

Effect of election

(1.1) Where a supplier and a recipient make a joint election under subsection (1) in respect of a supply of a business or part of a business and the recipient, if a registrant, files the election with the Minister not later than the day on or before which the return under Division V is required to be filed for the recipient's first reporting period in which tax would, but for this subsection, have become payable in respect of the supply of any property or service made under the agreement for the supply of the business or part, or on such later day as the Minister may determine on application of the recipient,

(a) no tax is payable in respect of a supply of any property or service made under the agreement other than

(i) a taxable supply of a service that is to be rendered by the supplier,

(ii) a taxable supply of property by way of lease, licence or similar arrangement, and

(iii) where the recipient is not a registrant, a taxable supply by way of sale of real property; and

(b) for the purposes of this Part,

(i) where, but for this subsection, tax would have been payable by the recipient in respect of a supply made under the agreement of property that was capital property of the supplier and that is being acquired by the recipient for use as capital property of the recipient, the recipient shall be deemed to have so acquired the property for use exclusively in the course of commercial activities of the recipient, and

(ii) where, notwithstanding this subsection, tax would not have been payable by the recipient in respect of a supply made under the agreement of property that was capital property of the supplier and that is being acquired by the recipient for use as capital property of the recipient, the recipient shall be deemed to have so acquired the property for use exclusively in activities of the recipient that are not commercial activities.

Supply of business assets of deceased

(2) Where

(a) immediately before death, an individual held property for consumption, use or supply in the course of a business carried on immediately before the individual's death,

(b) the estate of the deceased individual makes a supply, in accordance with the individual's will or the laws relating to the succession of property on death, of the property to another individual who is a beneficiary of the estate and a registrant,

(c) the property is received for consumption, use or supply in the course of commercial activities of the other individual, and

(d) the estate and the other individual jointly elect under this subsection,

no tax is payable in respect of the supply and the other individual shall, for the purposes of this Part, be deemed to have acquired the property for use exclusively in commercial activities of the individual.

1990, c. 45, s. 12; 1993, c. 27, s. 32; 1994, c. 9, s. 8; 1997, c. 10, s. 18.

Goodwill

167.1 For the purposes of this Part, where a supplier makes a supply of a business or part of a business that was established or carried on by the supplier or that was established or carried on by another person and acquired by the supplier, the recipient is acquiring ownership, possession or use of all or substantially all of the property that can reasonably be regarded as being necessary for the recipient to be capable of carrying on the business or part as a business, and part of the consideration for the supply can reasonably be attributed to goodwill of the business or part, that part of the consideration shall not be included in calculating the tax payable in respect of the supply.

1993, c. 27, s. 33.

Supplies to non-resident persons of admissions to conventions

167.2 (1) If a sponsor of a convention makes a taxable supply of an admission to the convention to a non-resident person, the following shall not be included in calculating the tax payable in respect of the supply:

(a) that portion of the consideration for the admission that is reasonably attributable to the provision of the convention facility or related convention supplies other than property or services that are food or beverages or are supplied under a contract for catering; and

(b) 50% of that portion of the consideration for the admission that is reasonably attributable to the provision of related convention supplies that are food or beverages or are supplied under a contract for catering.

Supplies to non-resident exhibitors

(2) Where a sponsor of a convention makes a taxable supply by way of lease, licence or similar arrangement to a non-resident person of real property that is acquired by the person exclusively for use as a site for the promotion, at the convention, of property or services supplied by, or of a business of, the person, no tax is payable in respect of that supply to the person or in respect of any supply by the sponsor to the person of property or services that are acquired by the person for consumption or use as related convention supplies in respect of the convention.

1993, c. 27, s. 34; 2000, c. 30, s. 27.

When Tax Payable

General rule

168. (1) Tax under this Division in respect of a taxable supply is payable by the recipient on the earlier of the day the consideration for the supply is paid and the day the consideration for the supply becomes due.

Partial consideration

(2) Notwithstanding subsection (1), where consideration for a taxable supply is paid or becomes due on more than one day,

(a) tax under this Division in respect of the supply is payable on each day that is the earlier of the day a part of the consideration is paid and the day that part becomes due; and

(b) the tax that is payable on each such day shall be calculated on the value of the part of the consideration that is paid or becomes due, as the case may be, on that day.

Supply completed

(3) Notwithstanding subsections (1) and (2), where all or any part of the consideration for a taxable supply has not been paid or become due on or before the last day of the calendar month immediately following the first calendar month in which

(a) where the supply is of tangible personal property by way of sale, other than a supply described in paragraph (b) or (c), the ownership or possession of the property is transferred to the recipient,

(b) where the supply is of tangible personal property by way of sale under which the supplier delivers the property to the recipient on approval, consignment, sale-or-return basis or other similar terms, the recipient acquires ownership of the property or makes a supply of it to any person, other than the supplier, or

(c) where the supply is under an agreement in writing for the construction, renovation or alteration of, or repair to,

(i) any real property, or

(ii) any ship or other marine vessel, and it may reasonably be expected that the construction, renovation, alteration or repair will require more than three months to complete,

the construction, renovation, alteration or repair is substantially completed,

tax under this Division in respect of the supply, calculated on the value of that consideration or part, as the case may be, is payable on that day.

Continuous supplies

(4) Subsection (3) does not apply in respect of a supply of water, electricity, natural gas, steam or any other property where the property is delivered or made available to the recipient on a continuous basis by means of a wire, pipeline or other conduit and the supplier invoices the recipient in respect of that supply on a regular or periodic basis.

Sale of real property

(5) Notwithstanding subsections (1) and (2), tax under this Division in respect of a taxable supply of real property by way of sale is payable

(a) in the case of a supply of a residential condominium unit where possession of the unit is transferred, after 1990 and before the condominium complex in which the unit is situated is registered as a condominium, to the recipient under the agreement for the supply, on the earlier of the day ownership of the unit is transferred to the recipient and the day that is sixty days after the day the condominium complex is registered as a condominium; and

(b) in any other case, on the earlier of the day ownership of the property is transferred to the recipient and the day possession of the property is transferred to the recipient under the agreement for the supply.

Value not ascertainable

(6) Where under subsection (3) or (5) tax is payable on a day and the value of the consideration, or any part thereof, for the taxable supply is not ascertainable on that day,

(a) tax calculated on the value of the consideration or part, as the case may be, that is ascertainable on that day is payable on that day; and

(b) tax calculated on the value of the consideration or part, as the case may be, that is not ascertainable on that day is payable on the day the value becomes ascertainable.

Retention of consideration

(7) Notwithstanding subsections (1), (2), (3), (5) and (6), where the recipient of a taxable supply retains, pursuant to

(a) an Act of Parliament or of the legislature of a province, or

(b) an agreement in writing for the construction, renovation or alteration of, or repair to, any real property or any ship or other marine vessel,

a part of the consideration for the supply pending full and satisfactory performance of the supply, or any part thereof, tax under this Division, calculated on the value of that part of the consideration, is payable on the earlier of the day that part is paid and the day it becomes payable.

Combined supply

(8) For the purposes of this section, where a supply of any combination of service, personal property or real property (each of which is in this subsection referred to as an "element") is made and the consideration for each element is not separately identified,

(a) where the value of a particular element can reasonably be regarded as exceeding the value of each of the other elements, the supply of all of the elements shall be deemed to be a supply only of the particular element; and

(b) in any other case, the supply of all of the elements shall be deemed

(i) where one of the elements is real property, to be a supply only of real property, and

(ii) in any other case, to be a supply only of a service.

Deposits

(9) For the purposes of this section, a deposit (other than a deposit in respect of a covering or container in respect of which section 137 applies), whether refundable or not, given in respect of a supply shall not be considered as consideration paid for the supply unless and until the supplier applies the deposit as consideration for the supply.

1990, c. 45, s. 12.

Subdivision b

Input tax credits

General rule for credits

169. (1) Subject to this Part, where a person acquires or imports property or a service or brings it into a participating province and, during a reporting period of the person during which the person is a registrant, tax in respect of the supply, importation or bringing in becomes payable by the person or is paid by the person without having become payable, the amount determined by the following formula is an input tax credit of the person in respect of the property or service for the period:

A x B

where

A is the tax in respect of the supply, importation or bringing in, as the case may be, that becomes payable by the person during the reporting period or that is paid by the person during the period without having become payable; and

B is

(a) where the tax is deemed under subsection 202(4) to have been paid in respect of the property on the last day of a taxation year of the person, the extent (expressed as a percentage of the total use of the property in the course of commercial activities and businesses of the person during that taxation year) to which the person used the property in the course of commercial activities of the person during that taxation year,

(b) where the property or service is acquired, imported or brought into the province, as the case may be, by the person for use in improving capital property of the person, the extent (expressed as a percentage) to which the person was using the capital property in the course of commercial activities of the person immediately after the capital property or a portion thereof was last acquired or imported by the person, and

(c) in any other case, the extent (expressed as a percentage) to which the person acquired or imported the property or service or brought it into the participating province, as the case may be, for consumption, use or supply in the course of commercial activities of the person.

Determining credit for improvement

(1.1) Where a person acquires or imports property or a service or brings it into a participating province partly for use in improving capital property of the person and partly for another purpose, for the purpose of determining an input tax credit of the person in respect of the property or service,

(a) notwithstanding section 138, that part of the property or service that is for use in improving the capital property and the remaining part of the property or service are each deemed to be a separate property or service that does not form part of the other;

(b) the tax payable in respect of the supply, importation or bringing in, as the case may be, of that part of the property or service that is for use in improving the capital property is deemed to be equal to the amount determined by the formula

A x B

where

A is the tax payable (in this section referred to as the "total tax payable") by the person in respect of the supply, importation or bringing in, as the case may be, of the property or service, determined without reference to this section, and

B is the extent (expressed as a percentage) to which the total consideration paid or payable by the person for the supply in Canada of the property or service or the value of the imported goods or the property brought in is or would be, if the person were a taxpayer under the Income Tax Act, included in determining the adjusted cost base to the person of the capital property for the purposes of that Act; and

(c) the tax payable in respect of that part of the property or service that is not for use in improving the capital property is deemed to be equal to the difference between the total tax payable and the amount determined under paragraph (b).

(1.2) and (1.3) [Repealed, 1997, c. 10, s. 161]

Credit for goods imported to provide commercial service

(2) Subject to this Part, where a registrant imports goods of a non-resident person who is not registered under Subdivision d of Division V for the purpose of making a taxable supply to the non-resident person of a commercial service in respect of the goods and, during a reporting period of the registrant, tax in respect of the importation becomes payable by the registrant or is paid by the registrant without having become payable, the input tax credit of the registrant in respect of the goods for the reporting period is an amount equal to that tax.

Restricted credit for selected listed financial institutions

(3) No amount shall be included in determining an input tax credit of a person in respect of tax that becomes payable by the person under subsection 165(2) or section 212.1 while the person is a selected listed financial institution unless

(a) the input tax credit is in respect of

(i) tax that the person is deemed to have paid under subsection 171(1), 171.1(2), 206(2) or (3) or 208(2) or (3), or

(ii) an amount of tax that is prescribed for the purposes of paragraph (a) of the description of F in subsection 225.2(2); or

(b) the person is permitted to claim the input tax credit under subsection 193(1) or (2).

Required documentation

(4) A registrant may not claim an input tax credit for a reporting period unless, before filing the return in which the credit is claimed,

(a) the registrant has obtained sufficient evidence in such form containing such information as will enable the amount of the input tax credit to be determined, including any such information as may be prescribed; and

(b) where the credit is in respect of property or a service supplied to the registrant in circumstances in which the registrant is required to report the tax payable in respect of the supply in a return filed with the Minister under this Part, the registrant has so reported the tax in a return filed under this Part.

Exemption

(5) Where the Minister is satisfied that there are or will be sufficient records available to establish the particulars of any supply or importation or of any supply or importation of a specified class and the tax in respect of the supply or importation paid or payable under this Part, the Minister may

(a) exempt a specified registrant, a specified class of registrants or registrants generally from any of the requirements of subsection (4) in respect of that supply or importation or a supply or importation of that class; and

(b) specify terms and conditions of the exemption.

1990, c. 45, s. 12; 1993, c. 27, s. 35; 1997, c. 10, ss. 19, 161; 2000, c. 30, s. 28.

Restriction

170. (1) In determining an input tax credit of a registrant, no amount shall be included in respect of the tax payable by the registrant in respect of

(a) a supply of a membership, or a right to acquire a membership, in a club the main purpose of which is to provide dining, recreational or sporting facilities, except where the registrant acquires the membership or right, as the case may be, exclusively for supply in the ordinary course of a business of the registrant of supplying such memberships or rights;

(a.1) a supply, importation or bringing into a participating province of property or a service that is acquired, imported or brought in by the registrant for consumption or use by the registrant (or, where the registrant is a partnership, an individual who is a member of the partnership) in relation to any part (in this paragraph referred to as the "work space") of a self-contained domestic establishment in which the registrant or the individual, as the case may be, resides unless the work space

(i) is the principal place of business of the registrant, or

(ii) is used exclusively for the purpose of earning income from a business and is used on a regular and continuous basis for meeting clients, customers or patients of the registrant in respect of the business;

(b) a supply, importation or bringing into a participating province of property or a service that is acquired, imported or brought in by the registrant at any time in or before a reporting period of the registrant exclusively for the personal consumption, use or enjoyment (in this paragraph referred to as the "benefit") in that period of a particular individual who was, is or agrees to become an officer or employee of the registrant, or of another individual related to the particular individual, except where

(i) the registrant makes a taxable supply of the property or service to the particular individual or the other individual for consideration that becomes due in that period and that is equal to the fair market value of the property or service at the time the consideration becomes due, or

(ii) if no amount were payable by the particular individual for the benefit, no amount would be included under section 6 of the Income Tax Act in respect of the benefit in computing the income of the particular individual for the purposes of that Act; and

(c) a supply made in or before a reporting period of the registrant of property, by way of lease, licence or similar arrangement, primarily for the personal consumption, use or enjoyment in that period of

(i) where the registrant is an individual, the registrant or another individual related to the registrant,

(ii) where the registrant is a partnership, an individual who is a member of the partnership or another individual who is an employee, officer or shareholder of, or related to, a member of the partnership,

(iii) where the registrant is a corporation, an individual who is a shareholder of the corporation or another individual related to the shareholder, and

(iv) where the registrant is a trust, an individual who is a beneficiary of the trust or another individual related to the beneficiary,

except where the registrant makes a taxable supply of the property in that period to such an individual for consideration that becomes due in that period and that is equal to the fair market value of the supply at the time the consideration becomes due.

Further restriction

(2) In determining an input tax credit of a registrant, no amount shall be included in respect of the tax payable by the registrant in respect of property or a service acquired, imported or brought into a participating province by the registrant, except to the extent that

(a) the consumption or use of property or services of such quality, nature or cost is reasonable in the circumstances, having regard to the nature of the commercial activities of the registrant; and

(b) the amount is calculated on consideration for the property or service or on a value of the property that is reasonable in the circumstances.

1990, c. 45, s. 12; 1993, c. 27, s. 36; 1997, c. 10, ss. 20, 162.

Subdivision c

Special cases

Becoming and Ceasing to be Registrant

Person becoming registrant

171. (1) Where at any time a person becomes a registrant and immediately before that time the person was a small supplier, for the purpose of determining an input tax credit of the person, the person shall be deemed

(a) to have received, at that time, a supply by way of sale of each property of the person that was held immediately before that time for consumption, use or supply in the course of commercial activities of the person; and

(b) to have paid, at that time, tax in respect of the supply equal to the basic tax content of the property at that time.

Services and rental property

(2) Subject to this Division, where at any time a person becomes a registrant, in determining the input tax credits of the person for the first reporting period of the person ending after that time,

(a) there may be included the total of any tax that became payable by the person before that time, to the extent that the tax was payable in respect of services to be supplied to the person after that time for consumption, use or supply in the course of commercial activities of the person or was calculated on the value of consideration that is a rent, royalty or similar payment attributable to a period after that time in respect of property that is used in the course of commercial activities of the person; and

(b) there shall not be included any tax that becomes payable by the person after that time, to the extent that the tax is payable in respect of services supplied to the person before that time or is calculated on the value of consideration that is a rent, royalty or similar payment attributable to a period before that time.

Properties on ceasing to be registrant

(3) For the purposes of this Part, where a person ceases at any time to be a registrant,

(a) the person shall be deemed

(i) to have made, immediately before that time, a supply of each property of the person (other than capital property) that immediately before that time was held by the person for consumption, use or supply in the course of commercial activities of the person and to have collected, immediately before that time, tax in respect of the supply, calculated on the fair market value of the property at that time, and

(ii) to have received, at that time, a supply of the property by way of sale and to have paid, at that time, tax in respect of the supply equal to the amount determined under subparagraph (i); and

(b) where the person was, immediately before that time, using capital property of the person in commercial activities of the person, the person shall be deemed to have, immediately before that time, ceased using the property in commercial activities.

Services and rental properties

(4) Where a person who engages in commercial activities ceases at any time to be a registrant,

(a) in determining the input tax credits of the person for the last reporting period of the person beginning before that time, there may be included the total of any tax that becomes payable by the person after that time, to the extent that the tax is payable in respect of services that were supplied to the person before that time for consumption, use or supply in the course of commercial activities of the person or is calculated on the value of consideration that is a rent, royalty or similar payment attributable to a period before that time in respect of property that is used in the course of commercial activities of the person; and

(b) in determining the net tax of the person for the last reporting period of the person beginning before that time, there shall be added to the total for A in the formula set out in subsection 225(1) any input tax credit claimed by the person before that time, to the extent that it relates to services to be supplied to the person after that time or to the value of consideration that is a rent, royalty or similar payment attributable to a period after that time.

Exception

(5) Subsections (1) to (4) do not apply where section 171.1 applies and subsection (3) does not apply to property held by a person immediately before the person ceases to be a registrant where subsection 178.3(1), 178.4(1) or 178.5(1) or (2) applied to that property at an earlier time.

1990, c. 45, s. 12; 1993, c. 27, s. 37; 1997, c. 10, s. 163.

Taxi Businesses

Small suppliers

171.1 (1) Where at any time a person who is a small supplier is engaged in a taxi business and other commercial activities in Canada, other than the supply by way of sale of real property, and the registration of the person under this Part does not apply to those other activities,

(a) the person shall be deemed, for the purposes of this Part, not to be a registrant at that time except in respect of that business and anything done by the person in the course of that business or in connection with it; and

(b) for the purposes of section 169 and Subdivision d, those other activities shall be deemed not to be commercial activities of the person at that time.

Becoming a registrant for other activities

(2) Where at any time a person is engaged in a taxi business and other commercial activities in Canada, other than the supply by way of sale of real property, and the person's registration under this Part begins, at that time, to apply to those other activities, the following rules apply:

(a) for the purpose of determining an input tax credit of the person, the person is deemed to have received, at that time, a supply by way of sale of each property of the person, other than capital property, that was held immediately before that time for consumption, use or supply in the course of those other activities and to have paid, at that time, tax in respect of the supply equal to the basic tax content of the property at that time; and

(b) for the purpose of determining the input tax credits of the person for the reporting period that includes that time, there may be included the total of any tax that became payable by the person before that time, to the extent that the tax is calculated on consideration, or a part thereof,

(i) that is reasonably attributable to a service that is to be rendered to the person after that time and that was acquired by the person for consumption, use or supply in the course of those other activities, or

(ii) that is a rent, royalty or similar payment in respect of property and that is reasonably attributable to a period after that time during which the property is used in the course of those other activities.

Ceasing to be a registrant for other activities

(3) Where at any time a person is engaged in a taxi business and other commercial activities in Canada, other than the supply by way of sale of real property, and the person's registration under this Part ceases, at that time, to apply to those other activities, the following rules apply:

(a) for the purposes of this Part, the person shall be deemed

(i) to have made, immediately before that time, a supply of each property of the person, other than capital property, that was held immediately before that time for consumption, use or supply in the course of those other activities, and to have collected, immediately before that time, tax in respect of the supply calculated on the fair market value of the property at that time, and

(ii) to have received, at that time, a supply of the property by way of sale and to have paid, at that time, tax in respect of the supply equal to the amount determined under subparagraph (i);

(b) in determining the input tax credits of the person for the reporting period that includes that time, there may be included tax that becomes payable by the person after that time, to the extent that the tax is calculated on consideration, or a part thereof,

(i) that is reasonably attributable to services that were rendered to the person before that time and that were acquired by the person for consumption, use or supply in the course of those other activities, or

(ii) that is a rent, royalty or similar payment in respect of property and that is reasonably attributable to a period before that time during which the property was used in the course of those other activities; and

(c) where, in determining an input tax credit claimed by the person in a return under section 238 for a reporting period of the person ending before that time, there was included an amount in respect of tax calculated on consideration, or a part thereof,

(i) that is reasonably attributable to services that are to be rendered to the person after that time, or

(ii) that is a rent, royalty or similar payment in respect of property and that is reasonably attributable to a period (in this paragraph referred to as the "lease period") after that time,

the amount shall be added in determining the net tax for the reporting period of the person that includes that time, to the extent to which the property is used by the person during the lease period, or the services were acquired by the person for consumption, use or supply, in the course of those other activities.

1993, c. 27, s. 38; 1997, c. 10, s. 164.

Appropriation of Property

Use by registrant

172. (1) For the purposes of this Part, where a registrant who is an individual and who has, in the course of commercial activities of the registrant, acquired, manufactured or produced any property (other than capital property of the registrant) or acquired or performed any service appropriates the property or service, at any time, for the personal use, consumption or enjoyment of the registrant or another individual related to the registrant, the registrant shall be deemed

(a) to have made a supply of the property or service for consideration paid at that time equal to the fair market value of the property or service at that time; and

(b) except where the supply is an exempt supply, to have collected, at that time, tax in respect of the supply, calculated on that consideration.

Benefits to shareholders, etc.

(2) For the purposes of this Part, where at any time a registrant that is a corporation, partnership, trust, charity, public institution or non-profit organization appropriates any property (other than capital property of the registrant) that was acquired, manufactured or produced, or any service acquired or performed, in the course of commercial activities of the registrant, to or for the benefit of a shareholder, partner, beneficiary or member of the registrant or any individual related to such a shareholder, partner, beneficiary or member, in any manner whatever (otherwise than by way of a supply made for consideration equal to the fair market value of the property or service), the registrant is deemed

(a) to have made a supply of the property or service for consideration paid at that time equal to the fair market value of the property or service at that time; and

(b) except where the supply is an exempt supply, to have collected, at that time, tax in respect of the supply, calculated on that consideration.

Application

(3) This section does not apply to property or a service appropriated by a registrant to or for the benefit of a person where

(a) the registrant was, because of section 170, not entitled to claim an input tax credit in respect of the last acquisition or importation of the property or service by the registrant; or

(b) section 173 applies to the property or service so appropriated for the purpose of making it available to the person.

1990, c. 45, s. 12; 1993, c. 27, s. 39; 1997, c. 10, s. 21.

Taxable Benefits

Employee and shareholder benefits

173. (1) Where a registrant makes a supply (other than an exempt or zero-rated supply) of property or a service to an individual or a person related to the individual and

(a) an amount (in this subsection referred to as the "benefit amount") in respect of the supply is required under paragraph 6(1)(a), (e), (k) or (l) or subsection 15(1) of the Income Tax Act to be included in computing the individual's income for a taxation year of the individual, or

(b) the supply relates to the use or operation of an automobile and an amount (in this subsection referred to as a "reimbursement") is paid by the individual or a person related to the individual that reduces the amount in respect of the supply that would otherwise be required under paragraph 6(1)(e), (k) or (l) or subsection 15(1) of that Act to be so included,

the following rules apply:

(c) in the case of a supply of property otherwise than by way of sale, the use made by the registrant in so providing the property to the individual or person related to the individual is deemed, for the purposes of this Part, to be use in commercial activities of the registrant and, to the extent that the registrant acquired or imported the property or brought it into a participating province for the purpose of making that supply, the registrant is deemed, for the purposes of this Part, to have so acquired or imported the property or brought it into the province, as the case may be, for use in commercial activities of the registrant, and

(d) in any case, except where

(i) the registrant was, because of section 170, not entitled to claim an input tax credit in respect of the last acquisition, importation or bringing into a participating province of the property or service by the registrant,

(ii) an election under subsection (2) by the registrant in respect of the property is in effect at the beginning of the taxation year,

(iii) the registrant is an individual or a partnership and the property is a passenger vehicle or aircraft of the registrant that is not used by the registrant exclusively in commercial activities of the registrant, or

(iv) the registrant is not an individual, a partnership or a financial institution and the property is a passenger vehicle or aircraft of the registrant that is not used by the registrant primarily in commercial activities of the registrant,

for the purpose of determining the net tax of the registrant,

(v) the total of the benefit amount and all reimbursements is deemed to be the total consideration payable in respect of the provision during the year of the property or service to the individual or person related to the individual,

(vi) the tax calculated on the total consideration is deemed to be equal to

(A) where the benefit amount is an amount that is or would, if the individual were an employee of the registrant and no reimbursements were paid, be required under paragraph 6(1)(k) or (l) of the Income Tax Act to be included in computing the individual's income, the prescribed percentage of the total consideration, and

(B) in any other case, the amount determined by the formula

(A/B) x C

where

A is

(I) where

1. the benefit amount is required to be included under paragraph 6(1)(a) or (e) of the Income Tax Act in computing the individual's income from an office or employment and the last establishment of the employer at which the individual ordinarily worked or to which the individual ordinarily reported in the year in relation to that office or employment is located in a participating province, or

2. the benefit amount is required under subsection 15(1) of that Act to be included in computing the individual's income and the individual is resident in a participating province at the end of the year,

the total of 6% and the tax rate for the participating province, and

(II) in any other case, 6%,

B is the total of 100% and the percentage determined for A, and

C is the total consideration.

(vii) that tax is deemed to have become collectible, and to have been collected, by the registrant

(A) except where clause (B) applies, on the last day of February of the year following the taxation year, and

(B) where the benefit amount is or would, if no reimbursements were paid, be required under subsection 15(1) of that Act to be included in computing the individual's income and relates to the provision of the property or service in a taxation year of the registrant, on the last day of that taxation year.

Election in respect of passenger vehicle or aircraft

(2) Where

(a) in a reporting period of a registrant other than a financial institution, the registrant acquires a passenger vehicle or aircraft by way of lease for use otherwise than primarily in commercial activities of the registrant or the registrant uses, otherwise than primarily in commercial activities of the registrant, a passenger vehicle or aircraft that was last acquired by the registrant by way of lease, or

(b) in a reporting period of a registrant that is a financial institution, the registrant acquires a passenger vehicle or aircraft by way of purchase or lease or uses a passenger vehicle or aircraft that was last so acquired by the registrant,

the registrant may make an election under this subsection in respect of the vehicle or aircraft to take effect on the first day of that reporting period of the registrant.

Effect of election

(3) For the purposes of this Part, where an election made by a registrant under subsection (2) in respect of property becomes effective on a day in a particular reporting period of the registrant,

(a) notwithstanding paragraph (1)(c), the registrant is deemed to have begun, on that day, to use the property exclusively in activities of the registrant that are not commercial activities and, at all times thereafter until the registrant next disposes of or ceases to lease the property, the registrant is deemed to use the property exclusively in activities of the registrant that are not commercial activities;

(b) where the property was last supplied to the registrant by way of lease,

(i) there shall not be included, in determining an input tax credit claimed by the registrant in the return under section 238 for the particular or any subsequent reporting period, tax calculated on consideration, or a part thereof, for that supply that is reasonably attributable to a period after that day, and

(ii) where an amount in respect of any tax referred to in subparagraph (i) was included in determining an input tax credit claimed by the registrant in a return under section 238 for a reporting period ending before the particular reporting period, that amount shall be added in determining the net tax of the registrant for the particular reporting period;

(c) where the property was last supplied to the registrant by way of sale, the registrant is a financial institution and the cost of the property to the registrant did not exceed $50,000,

(i) there shall not be included, in determining an input tax credit claimed by the registrant in the return under section 238 for the particular or any subsequent reporting period, tax that is calculated on consideration or part thereof, for that supply or that is in respect of an improvement to the property acquired, imported or brought into a participating province by the registrant after the property was last so acquired, imported or brought in, as the case may be, and

(ii) where an amount in respect of any tax referred to in subparagraph (i) was included in determining an input tax credit claimed by the registrant in a return under section 238 for a reporting period of the registrant ending before the particular reporting period, that amount shall be added in determining the net tax of the registrant for the particular reporting period; and

(d) there shall not be included, in determining an input tax credit claimed by the registrant in the return under section 238 for the particular or any subsequent reporting period, tax calculated on an amount of consideration, or a value determined under section 215 or subsection 220.05(1), 220.06(1) or 220.07(1), that can reasonably be attributed to

(i) any property that is acquired, imported or brought into a participating province for consumption or use in operating the vehicle or aircraft in respect of which the election is made and that is, or is to be used, or consumed after that day, or

(ii) that portion of any service relating to the operation of that vehicle or aircraft that is, or is to be, rendered after that day; and

(e) where an amount in respect of any tax referred to in paragraph (d) was included in determining an input tax credit claimed by the registrant in a return under section 238 for a reporting period ending before the particular reporting period, that amount shall be added in determining the net tax of the registrant for the particular reporting period.

Form of election

(4) An election made under subsection (2) shall be made in prescribed form containing prescribed information.

1990, c. 45, s. 12; 1993, c. 27, s. 40; 1994, c. 21, s. 126; 1997, c. 10, ss. 22, 165.

Allowances and Reimbursements

Travel and other allowances

174. For the purposes of this Part, where

(a) a person pays an allowance

(i) to an employee of the person,

(ii) where the person is a partnership, to a member of the partnership, or

(iii) where the person is a charity or a public institution, to a volunteer who gives services to the charity or institution

for

(iv) supplies all or substantially all of which are taxable supplies (other than zero-rated supplies) of property or services acquired in Canada by the employee, member or volunteer in relation to activities engaged in by the person, or

(v) the use in Canada, in relation to activities engaged in by the person, of a motor vehicle,

(b) an amount in respect of the allowance is deductible in computing the income of the person for a taxation year of the person for the purposes of the Income Tax Act, or would have been so deductible if the person were a taxpayer under that Act and the activity were a business, and

(c) in the case of an allowance to which subparagraph 6(1)(b)(v), (vi), (vii) or (vii.1) of that Act would apply

(i) if the allowance were a reasonable allowance for the purposes of that subparagraph, and

(ii) where the person is a partnership and the allowance is paid to a member of the partnership, if the member were an employee of the partnership, or, where the person is a charity or a public institution and the allowance is paid to a volunteer, if the volunteer were an employee of the charity or institution,

the person considered, at the time the allowance was paid, that the allowance would be a reasonable allowance for those purposes and it is reasonable for the person to have considered, at that time, that the allowance would be a reasonable allowance for those purposes,

the following rules apply:

(d) the person is deemed to have received a supply of the property or service,

(e) any consumption or use of the property or service by the employee, member or volunteer is deemed to be consumption or use by the person and not by the employee, member or volunteer, and

(f) the person is deemed to have paid, at the time the allowance is paid, tax in respect of the supply equal to the amount determined by the formula

A x B

where

A is the amount of the allowance, and

B is

(i) 15/115 where

(A) all or substantially all of the supplies for which the allowance is paid were made in participating provinces, or

(B) the allowance is paid for the use of the motor vehicle in participating provinces, and

(ii) in any other case, 7/107.

1990, c. 45, s. 12; 1993, c. 27, s. 40; 1994, c. 9, s. 9; 1997, c. 10, ss. 23, 166.

Employee, partner or volunteer reimbursement

175. (1) Where an employee of an employer, a member of a partnership or a volunteer who gives services to a charity or public institution acquires or imports property or a service or brings it into a participating province for consumption or use in relation to activities of the employer, partnership, charity or public institution (each of which is referred to in this subsection as the "person"), the employee, member or volunteer paid the tax payable in respect of that acquisition, importation or bringing in and the person pays an amount to the employee, member or volunteer as a reimbursement in respect of the property or service, for the purposes of this Part,

(a) the person is deemed to have received a supply of the property or service;

(b) any consumption or use of the property or service by the employee, member or volunteer in relation to activities of the person is deemed to be consumption or use by the person and not by the employee, member or volunteer; and

(c) the person is deemed to have paid, at the time the reimbursement is paid, tax in respect of the supply equal to the amount determined by the formula

A x B

where

A is the tax paid by the employee, member or volunteer in respect of the acquisition, importation or bringing into a particular province of the property or service by the employee, member or volunteer, and

B is the lesser of

(i) the percentage of the cost to the employee, member or volunteer of the property or service that is reimbursed, and

(ii) the extent (expressed as a percentage) to which the property or service was acquired, imported or brought into the province, as the case may be, by the employee, member or volunteer for consumption or use in relation to activities of the person.

Exception

(2) Subsection (1) does not apply to a reimbursement in respect of property or a service acquired, imported or brought into a participating province by a member of a partnership where paragraph 272.1(2)(b) applies to the acquisition, importation or bringing in, as the case may be, and the reimbursement is paid to the member after the member files with the Minister a return of the member under section 238 in which an input tax credit in respect of the property or service is claimed.

1990, c. 45, s. 12; 1994, c. 9, s. 9; 1997, c. 10, ss. 24, 167.

Warrantee reimbursement

175.1 Where

(a) the beneficiary of a warranty (other than an insurance policy) in respect of the quality, fitness or performance of tangible property acquires or imports property or a service or brings it into a participating province and tax is payable by the beneficiary in respect of the acquisition, importation or bringing in, and

(b) a registrant pays to the beneficiary, under the terms of the warranty, an amount as a reimbursement in respect of the property or service and therewith provides written indication that a portion of the amount is on account of tax,

the following rules apply:

(c) the registrant may claim an input tax credit, for the reporting period of the registrant in which the reimbursement is paid, equal to the amount (referred to in this section as the "tax reimbursed") determined by the formula

A x B/C

where

A is the tax payable by the beneficiary,

B is the amount of the reimbursement, and

C is the cost to the beneficiary of the property or service, and

(d) where the beneficiary is a registrant who was entitled to claim an input tax credit, or a rebate under Division VI, in respect of the property or service, the beneficiary is deemed, for the purposes of this Part, to have made a taxable supply and to have collected, at the time the reimbursement is paid, tax in respect of the supply equal to the amount determined by the formula

A x B/C

where

A is the tax reimbursed,

B is the total of the input tax credits and rebates under Division VI that the beneficiary was entitled to claim in respect of the property or service, and

C is the tax payable by the beneficiary in respect of the supply to, or importation by, the beneficiary of the property or service.

1997, c. 10, ss. 24, 168.

Used Returnable Containers

Acquisition of used returnable containers

176. (1) Subject to this Division, where

(a) a registrant is the recipient of a supply made in Canada by way of sale of used tangible personal property that is a usual covering or container of a class of coverings or containers in which property (other than property the supply of which is a zero-rated supply) is delivered,

(b) tax is not payable by the registrant in respect of the supply,

(c) the property is acquired for the purpose of consumption, use or supply in the course of commercial activities of the registrant, and

(d) except where the property is a returnable container (within the meaning assigned by section 226) of a class that is not supplied by the registrant when filled and sealed, the registrant pays to the supplier consideration for the supply that is not less than the total of

(i) the consideration that the registrant charges for supplies by the registrant of used coverings or containers of that class, and

(ii) all tax calculated on that consideration,

for the purposes of this Part, the registrant is deemed (except where section 167 applies to the supply) to have paid, at the time any amount is paid as consideration for the supply, tax in respect of the supply equal to the amount determined by the formula

(A/B) x C

where

A is

(a) where the supply is made in a participating province, the total of 7% and the tax rate for that province, and

(b) in any other case, 7%,

B is the total of 100% and the percentage determined for A, and

C is the amount paid as consideration for the supply.

Consideration exceeding fair market value

(2) For the purposes of subsection (1), where a person makes a supply of used tangible personal property to a registrant with whom the person is not dealing at arm's length for consideration that exceeds the fair market value of the property at the time ownership of the property is transferred to the registrant, the value of the consideration for the supply shall be deemed to be equal to the fair market value of the property at that time.

(3) to (7) [Repealed, 1997, c. 10, s. 25]

1990, c. 45, s. 12; 1993, c. 27, s. 41; 1997, c. 10, ss. 25, 169.

Agents

Supply on behalf of person not required to collect tax

177. (1) Where

(a) a person (in this subsection referred to as the "principal") makes a supply (other than an exempt or zero-rated supply) of tangible personal property to a recipient (otherwise than by auction),

(b) the principal is not required to collect tax in respect of the supply except as provided in this subsection, and

(c) a registrant (in this subsection referred to as the "agent"), in the course of a commercial activity of the agent, acts as agent in making the supply on behalf of the principal,

the following rules apply:

(d) where the principal is a registrant and the property was last used, or acquired for consumption or use, by the principal in an endeavour of the principal, within the meaning of subsection 141.01(1), and the principal and agent jointly elect in writing, the supply of the property to the recipient is deemed to be a taxable supply for the following purposes:

(i) all purposes of this Part, other than determining whether the principal may claim an input tax credit in respect of property or services acquired or imported by the principal for consumption or use in making the supply to the recipient, and

(ii) the purpose of determining whether the principal may claim an input tax credit in respect of services supplied by the agent relating to the supply of the property to the recipient, and

(e) in any other case, the supply of the property to the recipient is deemed, for the purposes of this Part, to be a taxable supply made by the agent and not by the principal and the agent is deemed, for the purposes of this Part other than section 180, not to have made a supply to the principal of services relating to the supply of the property to the recipient.

Election for agent to account for tax

(1.1) Where a registrant, in the course of a commercial activity of the registrant, acts as agent in making a supply (otherwise than by auction) on behalf of a person who is required to collect tax in respect of the supply otherwise than as a consequence of the application of paragraph (1)(d) and the registrant and the person jointly elect in prescribed form containing prescribed information,

(a) the tax collectible in respect of the supply shall be included in determining the net tax of the registrant and not of the person as if the tax were collectible by the registrant; and

(b) the registrant and the person are jointly and severally liable for all obligations under this Part that arise upon or as a consequence of the tax becoming collectible or any failure to account for or remit the tax.

Supply by auctioneer

(1.2) Where a registrant (in this subsection referred to as the "auctioneer"), acting as auctioneer and agent for another person (in this subsection referred to as the "principal") in the course of a commercial activity of the auctioneer, makes on behalf of the principal a supply by auction of tangible personal property to a recipient, the supply is deemed, for the purposes of this Part, to be a taxable supply made by the auctioneer and not by the principal and the auctioneer is deemed, for the purposes of this Part other than section 180, not to have made a supply to the principal of services relating to the supply of the property to the recipient.

Exception where election

(1.3) Where

(a) a registrant (in this subsection referred to as the "auctioneer"), on a particular day, makes a particular supply by auction of prescribed property on behalf of another registrant (in this subsection referred to as the "principal") and, but for subsection (1.2), that supply would be a taxable supply made by the principal,

(b) the auctioneer and principal jointly elect in prescribed form containing prescribed information in respect of the particular supply, and

(c) all or substantially all of the consideration for supplies made by auction on the particular day by the auctioneer on behalf of the principal is attributable to supplies of prescribed property in respect of which the auctioneer and principal have elected under this subsection,

subsection (1.2) does not apply to the particular supply or to any supply made by the auctioneer to the principal of services relating to the particular supply.

(1.4) [Repealed, 1997, c. 10, s. 26]

Supply for artists, etc.

(2) For the purposes of this Part other than sections 148 and 249, where a prescribed registrant, acting in the course of a commercial activity, makes a supply on behalf of another person of intangible personal property in respect of a product of an author, performing artist, painter, sculptor or other artist, the following rules apply:

(a) the other person shall be deemed not to have made the supply to the recipient;

(b) the registrant shall be deemed to have made the supply to the recipient; and

(c) the registrant shall be deemed not to have made a supply to the other person of a service in relation to the supply to the recipient.

1990, c. 45, s. 12; 1993, c. 27, s. 42; 1997, c. 10, s. 26.

178. [Repealed, 1997, c. 10, s. 27]

Direct Sellers

Definitions

178.1 In this section and sections 178.2 to 178.5,

"applicable provincial tax" « taxe provinciale applicable »

"applicable provincial tax" means any amount that can reasonably be attributed to a tax, duty or fee imposed under an Act of the legislature of a province and prescribed for the purposes of section 154;

"direct seller" « démarcheur »

"direct seller" means a person who sells exclusive products of the person to independent sales contractors of the person;

"distributor" « distributeur »

"distributor" of a direct seller means a person who is an independent sales contractor of the direct seller and who, in the course of the contractor's business, sells some or all of the exclusive products of the direct seller acquired by the contractor to other independent sales contractors of the direct seller;

"exclusive product" « produit exclusif »

"exclusive product" of a direct seller means personal property that is acquired, manufactured or produced by the direct seller for sale, in the ordinary course of a business of the direct seller, to an independent sales contractor of the direct seller, with the expectation that the property would be ultimately sold, otherwise than as used property, by an independent sales contractor of the direct seller, in the ordinary course of a business of the contractor, for consideration to a person other than another independent sales contractor of the direct seller;

"independent sales contractor" « entrepreneur indépendant »

"independent sales contractor" of a direct seller means a person (other than an agent or employee of the direct seller or of a distributor of the direct seller) who

(a) has a contractual right to purchase exclusive products of the direct seller from the direct seller or from a distributor of the direct seller,

(b) purchases exclusive products of the direct seller for the purpose of resale to other independent sales contractors of the direct seller or to purchasers, and

(c) does not solicit, negotiate or enter into contracts for the sale of exclusive products of the direct seller to purchasers primarily at a fixed place of business of the person other than a private residence;

"purchaser" « acheteur »

"purchaser" of an exclusive product of a direct seller means a person who is the recipient of a supply of the product and who is not acquiring the product for the purpose of supplying it for consideration;

"sales aid" « matériel de promotion »

"sales aid" of a person who is a direct seller or an independent sales contractor of a direct seller means

(a) property (other than an exclusive product of the direct seller)

(i) that is a customized business form or a sample, demonstration kit, promotional or instructional item, catalogue or other personal property acquired, manufactured or produced by the person for sale to assist in the promotion, sale or distribution of exclusive products of the direct seller, and

(ii) that is neither sold nor held for sale by the person to an independent sales contractor of the direct seller who is acquiring the property for use as capital property, and

(b) the service of shipping or handling, or processing an order for, either property included in paragraph (a) or an exclusive product of the direct seller;

"suggested retail price" « prix de vente au détail suggéré »

"suggested retail price" at any time of an exclusive product of a direct seller means the lowest price published by the direct seller applicable to supplies of the product made at that time to purchasers, but does not include any amount on account of tax.

1993, c. 27, s. 43; 2000, c. 30, s. 29.

Application for alternate collection method

178.2 (1) A direct seller who is a registrant may apply, in prescribed form containing prescribed information and filed in prescribed manner, to the Minister to have section 178.3 apply to the direct seller.

Idem

(2) Where a direct seller and a distributor of the direct seller are registrants, they may apply jointly, in prescribed form containing prescribed information and filed in prescribed manner, to the Minister to have section 178.4 apply to the distributor.

Grant of approval

(3) Where the Minister receives an application under subsection (1) from a direct seller, the Minister may approve in writing the application of section 178.3 to the direct seller, and the Minister shall, in writing, notify the direct seller of the approval and the day on which it becomes effective.

Idem

(4) Where the Minister receives a joint application under subsection (2) from a direct seller and a distributor of the direct seller, the Minister may approve in writing the application of section 178.4 to the distributor, and the Minister shall, in writing, notify both the distributor and the direct seller of the approval and the day on which it becomes effective.

Deemed approval

(5) Where, at a time when an approval for the application of section 178.3 to a direct seller would not, but for this subsection, be in effect, an approval granted under subsection (4) in respect of a distributor of the direct seller becomes effective and no other approval under that subsection in respect of a distributor of the direct seller is in effect at that time, the direct seller shall be deemed, for the purposes of this section and sections 178.3 to 178.5, to have been granted an approval under subsection (3) that becomes effective immediately before that time.

Revocation of approval

(6) The Minister may, effective on any day, revoke an approval granted under subsection (3) in respect of a direct seller where an approval granted under subsection (4) in respect of a distributor of the direct seller is not in effect on that day and

(a) the direct seller fails to comply with any provision of this Part, or

(b) except in the case of an approval deemed under subsection (5) to have been granted, the direct seller requests, in writing, the Minister to revoke the approval,

and where the Minister revokes the approval, the Minister shall, in writing, notify the direct seller of the revocation and the day on which it becomes effective.

Idem

(7) The Minister may revoke an approval granted under subsection (4) in respect of a distributor of a direct seller where the distributor fails to comply with any provision of this Part or the distributor and the direct seller, in writing, jointly request the Minister to revoke the approval, and the Minister shall, in writing, notify both the distributor and the direct seller of the revocation and the day on which it becomes effective.

Cessation

(8) An approval granted under subsection (3) in respect of a direct seller ceases to have effect on the earliest of

(a) the day the direct seller ceases to be a registrant,

(b) the day an approval granted under subsection (4) in respect of any distributor of the direct seller ceases to have effect and there is no other approval granted under that subsection in respect of any distributor of the direct seller in effect, and

(c) the day a revocation of the approval under subsection (6) becomes effective.

Idem

(9) An approval granted under subsection (4) on the joint application of a direct seller and a distributor of the direct seller ceases to have effect on the earliest of

(a) the day the direct seller ceases to be a registrant,

(b) the day the distributor ceases to be a registrant, and

(c) the day a revocation of the approval under subsection (7) becomes effective.

1993, c. 27, s. 43.

Effect of approval for direct seller

178.3 (1) For the purposes of this Part, where at any time when an approval of the Minister for the application of this section to a direct seller is in effect, the direct seller makes in Canada a taxable supply by way of sale (other than a zero-rated supply) of an exclusive