Sales Tax and Excise Tax Amendments Act, 2001 (S.C. 2001, c. 15)

Marginal note:1997, c. 10, s. 104(2)

• 27. (1) Paragraph 2(b) of Part VI of Schedule V to the Act is replaced by the following:

  • (b) property or a service where the supply is deemed under Part IX of the Act to have been made by the institution (other than a supply that is deemed only under section 136.1 of the Act to have been made);

• (2) Subsection (1) applies to supplies that are deemed to have been made under section 136.1 of the Act for lease intervals or billing periods beginning on or after April 1, 1997.

Marginal note:1990, c. 45, s. 18

• 28. (1) Paragraph 25(b) of Part VI of Schedule V to the Act is replaced by the following:

  (b) real property where the supply is deemed under Part IX of the Act to have been made (other than a supply that is deemed only under section 136.1 of the Act to have been made);

• (2) Subsection (1) applies to supplies that are deemed to have been made under section 136.1 of the Act for lease intervals beginning on or after April 1, 1997.

Marginal note:2000, c. 30, s. 126(2)

• 29. (1) Paragraph 1(e) of Part V of Schedule VI to the Act is replaced by the following:

  (e) the person maintains evidence satisfactory to the Minister of the exportation of the property by the recipient.

• (2) Subsection (1) applies to supplies made after 2000.

• 30. (1) Part V of Schedule VI to the Act is amended by adding the following after section 1:

  1.1 A taxable supply made by way of sale to a recipient (other than a consumer) who is registered under Subdivision d of Division V of Part IX of the Act of tangible personal property (other than property that is an excisable good or is a continuous transmission commodity that is to be transported by or on behalf of the recipient by means of a wire, pipeline or other conduit), where

  (a) the recipient provides the supplier with an export certificate (within the meaning of section 221.1 of the Act), certifying that an authorization to use the certificate granted to the recipient under that section is in effect at the time the supply is made, and discloses to the supplier the number referred to in subsection 221.1(4) of the Act and the expiry date of the authorization; and

  (b) if an authorization granted by the Minister to use the certificate is not, in fact, in effect at the time the supply is made or the recipient does not export the property in the circumstances described in paragraphs 1(b) to (d), it is the case that the supplier did not know and could not reasonably be expected to have known, at or before the latest time at which tax in respect of the supply would have become payable if the supply were not a zero-rated supply, that the authorization was not in effect at the time the supply was made or that the recipient would not so export the property.

  1.2 A taxable supply made by way of sale to a recipient who is registered under Subdivision d of Division V of Part IX of the Act of property (other than property that is an excisable good or is a continuous transmission commodity that is to be transported by or on behalf of the recipient by means of a wire, pipeline or other conduit), where

  (a) the recipient provides the supplier with an export distribution centre certificate (within the meaning of section 273.1 of the Act), certifying that an authorization to use the certificate granted to the recipient under that section is in effect at the time the supply is made and that the property is being acquired for use or supply as domestic inventory or as added property of the recipient (as those expressions are defined in that section), and discloses to the supplier the number referred to in subsection 273.1(9) of the Act and the expiry date of the authorization;

  (b) the total amount, included in a single invoice or agreement, of the consideration for that supply and for all other supplies, if any, that are made to the recipient and are otherwise included in this section is at least $1000; and

  (c) if an authorization granted by the Minister to use the certificate is not, in fact, in effect at the time the supply is made or the recipient is not acquiring the property for use or supply as domestic inventory or as added property (as those expressions are defined in that section) in the course of commercial activities of the recipient, it is the case that, at or before the latest time at which tax in respect of the supply would have become payable if the supply were not a zero-rated supply, the supplier did not know, and could not reasonably be expected to have known, that the authorization was not in effect at the time the supply was made or that the recipient was not acquiring the property for that purpose.

• (2) Subsection (1) applies to supplies made after 2000 except that, with respect to any supply in respect of which the recipient provides an export certificate (within the meaning of section 221.1 of the Act) that is in effect at the time the supply is made but was issued before January 1, 2001 and not renewed before the supply is made, or was last renewed before January 1, 2001, paragraph 1.1(a) of Part V of Schedule VI to the Act, as enacted by subsection (1), shall be read without reference to the words “and discloses to the supplier the number referred to in subsection 221.1(4) of the Act and the expiry date of the authorization”.

• 31. (1) Schedule VII to the Act is amended by adding the following after section 5:

  5.1 Goods that are imported solely for the purpose of fulfilling an obligation under a warranty to repair or replace the goods if defective, where replacement goods are supplied for no additional consideration, other than shipping and handling charges, and exported without being consumed or used in Canada except to the extent reasonably necessary or incidental to the transportation of the goods.

• (2) Subsection (1) applies to goods imported after February 28, 2000.

• 32. (1) Schedule VII to the Act is amended by adding the following after section 8:

  8.1 Particular goods that are imported at any time by a registrant to whom has been issued an authorization under section 213.2 of the Act that is in effect at that time and that are

  (a) processed, distributed or stored in Canada and subsequently exported without being consumed or used in Canada except to the extent reasonably necessary or incidental to the transportation of the goods,

  (b) incorporated or transformed into, attached to, or combined or assembled with, other goods that are processed in Canada and subsequently exported without being consumed or used in Canada except to the extent reasonably necessary or incidental to the transportation of those other goods, or

  (c) materials (other than fuel, lubricants and plant equipment) directly consumed or expended in the processing in Canada of other goods that are exported without being consumed or used in Canada except to the extent reasonably necessary or incidental to the transportation of those other goods,

  where

  (d) the particular goods are imported solely for the purpose of having services performed that are supplied by the registrant to a non-resident person,

  (e) throughout the period beginning at the time the particular goods are imported by the registrant and ending at the time of the exportation of the particular goods or the products (in this section referred to as the “processed products”) resulting from the processing referred to in whichever of paragraphs (a) to (c) applies,

  (i) neither the particular goods nor the processed products are the property of a person resident in Canada,

  (ii) the registrant does not have any proprietary interest in the particular goods or the processed products, and

  (iii) the registrant is not closely related to any non-resident person referred to in paragraph (d) or to any non-resident person whose property are the particular goods or the processed products,

  (f) at no time during the period referred to in paragraph (e) does the registrant transfer physical possession of the particular goods or the processed products to another person in Canada except for the purpose of their storage, their transportation to or from a place of storage or their transportation in the course of being exported,

  (g) the exportation of the particular goods or the processed products, as the case may be, occurs within four years after the day on which the particular goods are accounted for under section 32 of the Customs Act,

  (h) at the time of that accounting for the particular goods, the registrant discloses, on the accounting document, the number assigned to the registrant under subsection 213.2(1) of the Act, and

  (i) the registrant has provided any security that is required under section 213.1 of the Act.

  8.2 For the purpose of section 8.1, “processing” includes adjusting, altering, assembling or disassembling, cleaning, maintaining, repairing or servicing, inspecting or testing, labelling, marking, tagging or ticketing, manufacturing, producing, packing, unpacking or repacking, and packaging or repackaging.

  8.3 For the purpose of section 8.1, a registrant and another person are closely related to each other if they would be closely related under section 128 of the Act if the other person were a registrant resident in Canada.

• (2) Subsection (1) is deemed to have come into force on March 1, 1992 and applies to goods imported on or after that day except that, with respect to goods imported before February 29, 2000, paragraph 8.1(a) of Schedule VII to the Act, as enacted by subsection (1), shall be read without reference to the words “distributed or stored”.

• 33. (1) Schedule VII to the Act is amended by adding the following after section 10:

  11. A particular good that is an item of domestic inventory, added property or a customer’s good (as those expressions are defined in section 273.1 of the Act) imported at any time by a person who is registered under Subdivision d of Division V of Part IX of the Act and to whom has been granted an authorization that is in effect at that time to use an export distribution centre certificate (within the meaning of that section), if

  (a) when the particular good is accounted for under section 32 of the Customs Act, the person certifies that the authorization is in effect at that time and discloses the number referred to in subsection 273.1(9) of the Act and the effective date and expiry date of the authorization; and

  (b) the person has provided any security that is required under section 213.1 of the Act.

• (2) Subsection (1) applies to goods imported after 2000.