Refund of Duties and Taxes on Non-commercial Importations
Ottawa, February 6, 2013
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This memorandum has been revised to reflect organizational changes resulting from the restructuring of the Canada Border Services Agency on April 1, 2010, and to provide general updates clarifying refund procedures.
This memorandum outlines and explains the procedures for the refund of duties, goods and services tax (GST), harmonized sales tax (HST), provincial sales tax (PST), provincial tobacco and alcohol taxes, and levies under the Special Import Measures Act (SIMA) for non-commercial importations brought into Canada by mail, courier, or hand carried by the traveller.
The portions of the Customs Act and the Refund of Duties Regulations, and all other regulatory instruments referenced in this memorandum, may be accessed on the Department of Justice website, http://laws.justice.gc.ca/en/index.html. This memorandum should be read in conjunction with Paragraph 59(1)(a), and Sections 74 and 76 of the Customs Act and the Refund of Duties Regulations.
1. For the purpose of this memorandum, the following definitions apply:
2. Under prescribed conditions, the Customs Act allows for a person who paid duties on imported goods to apply for and for the Minister to issue a refund of all or part of the duties and taxes collected on non-commercial (casual) importations.
3. The Casual Refund Program manages the refund and adjustment processes for duties and taxes levied on non-commercial importations brought into Canada by mail, by courier or hand carried. The Program also allows for the reimbursement of duties and taxes paid, upon presentation of evidence that the imported casual goods have been returned to the sender.
4. It is the responsibility of border services officers to ensure that duties and taxes are collected on non-commercial goods imported into Canada at the time of importation and after personal exemptions are applied to the eligible traveller. Refer to Memorandum D17-1-3, Casual Importations and series D2 for import and accounting requirements.
5. Only under the prescribed conditions, which are contained within the Customs Act, will refunds be authorized. Casual Refund Centres (CRC) are the designated authority for all casual refund requests under the Customs Act.
6. The CRCs, which are located throughout Canada, have the delegated authority to refund, where applicable, duties, GST/HST, and provincial taxes, which were collected upon importation by either mail; courier; carried by the traveller. CRCs are listed on the back of the Form B2G, CBSA Informal Adjustment Request.
7. The following procedures are to assist non-commercial importers with their request to apply for a refund.
8. An importer may request a refund of duties and taxes paid on non-commercial importations using Form B2G. Copies of this form are available at CBSA offices and on the Internet at http://cbsa-asfc.gc.ca/publications/forms-formulaires/b2g.pdf.
9. Form B2G must be completed according to the instructions indicated on the reverse side of the form. The importer's signature must appear on either Form B2G or the accompanying correspondence requesting a refund of duties and taxes paid.
10.If a person other than the importer submits the request for refund, a letter signed by the importer authorizing the person to act as an agent, or a power of attorney, must be included with the claim. Additional details for authorized agents can be found in Memorandum D1-6-1, Authority to Act as Agent.
11. The original accounting document showing the amount of duties and taxes paid at the time of importation must be attached to Form B2G. The accounting document required is dependant upon the method of importation: for travellers' importations attach Form B15; postal importations attach Form E14; and, courier importations attach the courier receipt that includes the B3 transaction number.
12. Documents supporting the request for a refund or adjustment must be attached to Form B2G. The following are examples of acceptable documentation:
13. For more details concerning the conditions for refunds and documentation requirements, please refer to Appendix A.
14. Requests for refunds must be made within one year of the date of original importation for traveller and postal redeterminations of tariff classification, value and/or origin.
15. Requests for refunds under sections 74 or 76 of the Actmust be submitted within 4 years of the original date of importation except when claiming the benefits of preferential tariff treatment under the NAFTA or CCFTA. The free trade agreements and paragraph 74(1)(c.1) of the Act stipulate a one year time frame.
16. To avoid delays with the review and processing, requests for refund or adjustment should be presented to the CRC corresponding to the importer's address, as indicated in the instructions provided on Form B2G. The CBSA is not responsible for delays occuring from misdirected requests which impact the time eligibility specified under the Customs Act. If an application is received in another office, the receiving office will forward the application to the appropriate refund centre.
17. The CRCs are authorized to refund, where applicable, all or part of the duties, taxes, GST/HST, SIMA levies as well as provincial sales tax and tobacco tax that were paid at the time of importation. For information on the application of HST please refer to memoranda D2-3-6, Non-commercial Provincial Tax Collection Program and D17‑1‑22, Accounting for the Harmonized Sales Tax, Provincial Sales Tax, Provincial Tobacco Tax, and Alcohol Markup/Fee on Casual Importations in the Courier and Commercial Streams.
18. Provincial alcohol mark-ups/levies collected at time of importation will only be refunded when an error in calculation occurs which results in an overpayment of taxes or when duty-paid unconsumed alcohol is exported.
19. Refunds may not be claimed in respect of penalties imposed on imported goods.
20. The CRCs do not issue refunds of other government department (OGD) fees or penalties. Travellers and importers must contact the OGD to request refunds or adjustments of OGD fees and penalties.
21. The handling costs assessed on postal shipments are only refundable when the goods should have been duty-free and tax-exempt at time of importation. Canada Post charges for Express Mail Service (EMS) items are non-refundable.
22. Blanket refund requests for casual goods are not accepted. Please refer to Memorandum D6-2-3, Refund of Duties, for information regarding refunds of duties paid on commercial goods.
23. All refunds will be made payable to the importer to whom the goods were originally consigned.
24. For refunds granted under subparagraph 59(1)(a)(ii) of the Customs Act (re-determination of tariff classification, origin, or value of traveller or postal goods), interest will be computed at the prescribed rate for the period beginning on the first day after the duty was paid and ending on the day the refund is given.
25. For refunds granted under any other section of the Customs Act, interest at the prescribed rate will be granted for the period beginning on the 91st day after the day the application for refund is received and ending on the day the refund is granted.
26. Interest will not be paid on provincial sales taxes, tobacco taxes, and alcohol mark-ups/levies.
27. Where importers find that insufficient duties and taxes were assessed on their non-commercial postal, courier, or traveller declarations, an adjustment to the original assessment may be submitted on Form B2G.
28. Form B2G may be used to show the proper duty and taxes that should have been collected and must be accompanied by the original CBSA accounting documentation, for example, Form E14, Form B15, or courier receipt. The claim should be submitted to the corresponding CRC as indicated on Form B2G.
29. If an importer's refund or adjustment request is denied by the CRC for re-determination of tariff classification, origin, under subparagraph 59(1)(a)(ii) of the Customs Act, the importer may appeal this decision. This can be done by letter addressed to the CBSA regional recourse division stated on the CRC decision notice. The appeal request must be presented within 90 days of the Section 59 decision notice and include a copy of the decision along with information and documents supporting the request. Please refer to Appendix B of this memorandum and D11-6-7, Importers' Dispute Resolution Process for Origin, Tariff Classification, and Value for Duty of Imported Goods, for further information regarding appeal request.
30. Where the importer's refund or adjustment request is rejected by the CRC for reasons other than the tariff classification, origin and value for duty, the importer may submit a new application along with appropriate supporting documentation to the originating CRC for review and re-processing under the original provisions of the Customs Act. For the conditions to appeal decisions made by the CRC, please refer to Appendix B.
31. The Casual Refund Electronic Data Interchange Transaction System (CREDITS) is an electronic process allowing brokers to represent a foreign direct sales company and electronically submit refund claims on behalf of the importer. CREDITS is used for high volume refund applications for which brokers have originally accounted for the payment of duties and taxes on a Form B3 Canada Customs Coding Form and which the goods were subsequently returned to the foreign direct sales company. CREDITS allows authorized brokers to electronically transmit certain key information to a CRC. The CRC will issue a refund for the importer in care of the customs broker. The refund will be deposited directly into the broker's account and the importer will receive their refund of duties and taxes directly from the foreign company.
32. To participate in CREDITS the customs broker must have full power of attorney from the importer allowing them to act as the importer's agent, to account for the duty and taxes to the CBSA, to export the goods, to file the B2G refund claim for the returned goods, and to receive the refund. Power of attorney must be provided in the online or catalogue ordering/shipping instructions and must clearly explain to the importer that they are authorizing the customs broker to act on their behalf in all aspects of the import, accounting, export and refund process.
33. CREDITS requirements are detailed in the CREDITS Participant's Requirement Document (PRD). A copy of the CREDITS PRD, is available online at www.cbsa.gc.ca.
34. CREDITS allows the transmission of minimal data on the basis that original import and export records are maintained by the broker. The CBSA will conduct verification checks on the broker by asking for the original import and export documentation to be presented within an acceptable period of time following the request. An audit may be performed by the CBSA on the applicant's books.
35. Brokers wishing to participate in the CREDITS program must complete and submit a Form E613, Agreement to Electronically Process Casual Refund Claims which is available online at http://www.cbsa-asfc.gc.ca/publications/forms-formulaires/e613.pdf.
Forms E613 should be mailed to:
Canada Border Services Agency
Trade Programs Directorate
Assessment Unit
150 Isabella Street, 10th floor
Ottawa ON K1A 0L8
36. Upon receipt, the CBSA will review the application for completeness and conduct a workload analysis. Once the application is approved, the CBSA will make arrangements with the applicant for system testing. After the testing is complete the CBSA will issue a letter of approval authorizing the applicant to begin filing the CREDITS casual refund claims. Claims may then be filed electronically for goods returned after CBSA authorization was given.
37. By participating in CREDITS the broker agrees to the terms outlined in the Participants Requirement Document and listed in section 2 of the Agreement to Electronically Process Casual Refund Claims form. The CBSA reserves the right to terminate this agreement if the conditions of the agreement are not met.
Type of Refund | Legislation | Conditions | Requirements |
---|---|---|---|
Damaged, Deteriorated Goods |
Customs Act |
|
|
Shortage of Goods (Duty Paid on Full Quantity) |
Customs Act 74(1)(b) |
|
|
Inferior Quality |
Customs Act 74(1)(c) |
|
|
NAFTA/CCFTA |
Customs Act 74(1)(c.1) 74(1.1) 74(4)(a) 59(1)(a)(ii) |
|
|
CIFTA |
Customs Act 74(1)(c.11) 74(1.1) 74(4)(a) 59(1)(a)(ii) |
|
|
Clerical Error |
Customs Act 74(1)(d) |
|
|
Duties Overpaid or Paid in Error due to Determination |
Customs Act 74(1)(e) 74(1.1) 74(4)(b) 59(1)(a)(ii) |
|
|
Overpayment of Duties/Duties Paid in Error |
Customs Act 74(1)(g) 74(1.1) 74(4)(b) 59(1)(a)(ii) |
|
|
Goods Returned to Sender/ Exported |
Customs Act 76(1) |
|
|
Tariff Classification, Value for Duty, and Origin |
Customs Act 59(1)(a)(ii) |
|
|
Type of Refund | Legislation | Conditions | Requirements |
---|---|---|---|
Appeals on Tariff Classification, Value for Duty, and Origin |
Customs Act 60. |
|
|
Issuing office | Assessment Unit Assessment and Licensing Division Trade Programs Directorate |
Legislative references | Customs Act, sections 58, 59, 60, 74 and 76 |
Headquarters file | 7965-4 |
Other references | D1-6-1, D2-3-6, D6-2-3, D11-6-7, D17-1-3, D17-1-22 |
Superseded memoranda D | D6-2-6, August 4, 2000 |