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

Act current to 2017-07-03 and last amended on 2017-07-01. Previous Versions

Marginal note:Products held at time of approval
  •  (1) Where

    • (a) an approval granted under subsection 178.2(3) in respect of a direct seller becomes effective at any time after January 1, 1991,

    • (b) a registrant who is an independent sales contractor of the direct seller has, at that time, in inventory an exclusive product of the direct seller, and

    • (c) the registrant 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 at that time or becomes effective immediately after that time,

    the registrant shall be deemed, for the purposes of this Part except sections 148 and 249,

    • (d) to have made, immediately before that time, a supply of the product for consideration, that becomes due and is paid immediately before that time, equal to the suggested retail price of the product at that time, and

    • (e) to have collected, immediately before that time, tax in respect of the supply calculated on that consideration.

  • Marginal note:Products held at time of revocation

    (2) Where, at the time an approval granted under subsection 178.2(4) in respect of a distributor of a direct seller ceases to have effect, the distributor has in inventory an exclusive product of the direct seller and an approval granted under subsection 178.2(3) in respect of the direct seller does not cease to have effect at that time, the distributor shall be deemed, for the purposes of this Part except sections 148 and 249,

    • (a) to have made, immediately before that time, a supply of the product for consideration, that becomes due and is paid immediately before that time, equal to the suggested retail price of the product at that time; and

    • (b) to have collected, immediately before that time, tax in respect of the supply calculated on that consideration.

  • Marginal note:Idem

    (3) For the purposes of this Part, where an approval granted under subsection 178.2(4) in respect of a distributor of a direct seller ceases to have effect at the same time as an approval granted under subsection 178.2(3) in respect of the direct seller ceases to have effect, each independent sales contractor of the direct seller, other than a distributor in respect of whom an approval granted under subsection 178.2(4) ceases to have effect at that time, shall be deemed

    • (a) to have received, immediately after that time, a supply of each exclusive product of the direct seller that the contractor has in inventory at that time for consideration, that becomes due and is paid immediately after that time, equal to the suggested retail price of the product at that time; and

    • (b) to have paid, immediately after that time, tax in respect of the supply calculated on that consideration.

  • Marginal note:Idem

    (4) For the purposes of this Part, where an approval granted under subsection 178.2(3) in respect of a direct seller ceases, at any time after March 1993, to have effect and subsection (3) does not apply, each independent sales contractor of the direct seller shall be deemed

    • (a) to have received, immediately after that time, a supply of each exclusive product of the direct seller that the contractor has in inventory at that time for consideration, that becomes due and is paid immediately after that time, equal to the suggested retail price of the product at that time; and

    • (b) to have paid, immediately after that time, tax in respect of the supply calculated on that consideration.

  • Marginal note:Sales aids

    (5) For the purposes of this Part, where at any time when an approval of the Minister for the application of section 178.3 to a direct seller is in effect, the direct seller or an independent sales contractor of the direct seller makes in Canada a taxable supply by way of sale of a sales aid of the direct seller or of the contractor, as the case may be, to an independent sales contractor of the direct seller, the supply shall be deemed not to be a supply.

  • Marginal note:Bonus payments

    (6) For the purposes of this Part, where, at any time after March 1993 when an approval of the Minister for the application of section 178.3 to a direct seller is in effect, an amount is paid or payable by the direct seller or an independent sales contractor of the direct seller to an independent sales contractor of the direct seller because of the volume of purchases or sales of exclusive products of the direct seller or of sales aids and otherwise than as consideration for a supply of such a product or sales aid, the amount shall be deemed not to be consideration for a supply.

  • Marginal note:Host gifts

    (7) For the purposes of this Part, where, at any time after March 1993 when an approval of the Minister for the application of section 178.3 to a direct seller is in effect, 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 at that time or becomes effective immediately after that time, makes a supply of property to a person as consideration for the supply by the person of a service of acting as a host at an occasion that is organized for the purpose of the promotion or distribution by the contractor of exclusive products of the direct seller, the person shall be deemed not to have made a supply of the service and the service shall be deemed not to be consideration for a supply.

  • Marginal note:Restriction on input tax credits

    (8) Where

    • (a) after March, 1993 a registrant, who is a direct seller in respect of whom an approval granted under subsection 178.2(3) is in effect or who is a distributor of such a direct seller, acquires or imports property (other than an exclusive product of the direct seller) or a service or brings it into a participating province for supply to an independent sales contractor of the direct seller or an individual related thereto,

    • (b) the property or service is so supplied by the registrant for no consideration or for consideration that is less than the fair market value of the property or service, and

    • (c) the contractor or individual is not acquiring the property or service for consumption, use or supply exclusively in the course of commercial activities of the contractor or individual, as the case may be,

    the following rules apply:

    • (d) no tax is payable in respect of the supply, and

    • (e) in determining an input tax credit of the registrant, no amount shall be included in respect of tax that becomes payable, or is paid without having become payable, by the registrant in respect of the property or service.

  • Marginal note:Appropriations for contractors

    (9) For the purposes of this Part, where a registrant who is a direct seller in respect of whom an approval granted under subsection 178.2(3) is in effect or who is a distributor of such a direct seller appropriates, at any time after March 1993, property (other than an exclusive product of the direct seller) 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 an independent sales contractor of the direct seller, or any individual related thereto, who is not acquiring the property or service for consumption, use or supply exclusively in the course of commercial activities of the contractor or individual, in any manner whatever (otherwise than by way of supply for consideration equal to the fair market value of the property or service), 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.

  • Marginal note:Exception

    (10) Subsection (9) does not apply to property or a service appropriated by a registrant where the registrant was not entitled to claim an input tax credit in respect of the property or service because of section 170.

  • Marginal note:Ceasing to be registrant

    (11) Where, at any time after March 1993 when an approval granted under subsection 178.2(3) in respect of a direct seller is in effect, an independent sales contractor of the direct seller ceases to be a registrant, paragraph 171(3)(a) does not apply to sales aids of the contractor that were supplied to the contractor by the direct seller or another independent sales contractor of the direct seller at any time when the approval was in effect.

  • Marginal note:Non-arm’s length supply

    (12) Section 155 does not apply to a supply described in subparagraph 178.3(4)(b)(ii) or (iii) or 178.4(4)(b)(ii) or (iii) or subsection (7).

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1993, c. 27, s. 43;
  • 1997, c. 10, s. 172.

Buying Groups

Marginal note:Definitions
  •  (1) In this section,

    original supplier

    fournisseur initial

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

    pass-through supply

    fourniture intermédiaire

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

    ultimate recipient

    dernier acquéreur

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

  • Marginal note:Application for buyer designation

    (2) Where

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

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

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

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

  • Marginal note:Designation as buyer

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

  • Marginal note:Revocation of designation

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

    • (a) on application of the person, or

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

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

  • Marginal note:Buying group method

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

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

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

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

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

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

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1993, c. 27, s. 43.
 
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