Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 152391
May 1, 2013
Dear [Client]:
Subject: EXCISE INTERPRETATION
Spirits Licensees
Thank you for your letter of March 12, 2013 concerning the application of the Excise Act, 2001 (Act) to spirits licensees. [...].
[...], I will address how the Act applies to spirits licensees in general.
Persons who produce or package spirits must have a spirits licence. To receive a spirits licence, a person must meet the conditions included in the Regulations Respecting Excise Licences and Registrations and must provide security. The Act does not differentiate between a producer or packager of spirits. A person who holds a spirits licence, is considered to be a spirits licensee for all sections of the Act and there is no minimum quantity that a person must produce or package.
A spirits licence also allows a spirits licensee to import, export, denature, possess and transport bulk spirits, as well as import specially denatured alcohol (SDA). A spirits licensee may also supply bulk spirits to licensed users and SDA to SDA registrants.
Section 133 of the Act, imposes a "special duty" of $0.12 per litre of absolute ethyl alcohol on imported spirits. That section also specifies the person who is liable to pay the special duty. For example, if a spirits licensee imports bulk spirits and delivers the spirits to a licensed user, the special duty is payable at the time the spirits are delivered and is payable by the spirits licensee who is responsible for the spirits at that time.
Your letter also raised the issue of imported spirits blended with domestic spirits. As you are aware, the Canada Revenue Agency's current policy is where imported spirits are blended with a minimum of 50% domestic spirits, the resultant product is considered to be domestic and the special duty is not payable. We are reviewing this policy and any change would be made on a prospective basis.
All persons licensed under the Act are subject to audit to verify that they are in compliance with the Act. Where non-compliance is observed, the Act provides for assessments and penalties, including licence suspension and cancellation.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-5894.
Yours truly,
Tim Krawchuk
Manager
Excise Duty Operations - Alcohol
Excise Duties and Taxes Division
Excise and GST/HST Rulings Directorate
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