11645-6(RMcK)
Candace Breakwell
A/Director
Duties Relief Programs
Trade Administration Branch June 20, 1995
This refers to a note from the office of XXXXX concerning whether the provisions of Customs Notice N579, Canadian Goods Abroad, apply to goods exported for addition.
Customs Notice N-579 relates to the March 27, 1991 Press Release issued by the Department of Finance. The Press Release indicated that goods exported for the purpose of being serviced or further processed outside Canada will, upon re-importation, be subject to GST only on the value added outside Canada — that is the value of any work performed on the goods while outside Canada (plus of course, any Customs duties applicable on re-importation).
My understanding of the request received by your office is that if a blending and delivery system were added to a truck sent to the United States would the provisions of Customs Notice N-579 still apply? That is, would the value-added concept still apply? If the essential nature of the exported article (the truck) has not changed by the addition, and all the other terms and conditions outlined in the Customs Notice are met, then I would agree that the value-added concept detailed above should be applied.
However, if the returned item is classified by Customs as a good other than a truck then I would support the concept that the terms and conditions mentioned in Customs Notice 579 would not apply. In such circumstances, the returned goods would be taxable on its full value as determined by Customs, at time of re-importation.
I appreciate the opportunity to comment on this issue. If you have any concerns about this issue, please contact Roy McKain at 952-4294
H.L. Jones
Director
General Applications Division
GST Rulings and Interpretations
| c.c.: |
Susan Mailer
Roy McKain |
XXXXX
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