11645-5-2 (ms)
XXXXX July 28, 1995
This is in response to a telephone conversation between your officer, XXXXX and Mark Seigel of the Imports Unit, on September 1, 1994, regarding the above-referenced subject. We regret the delay in replying.
The following are our responses to the questions raised based on the information available to us.
Q.1. A good is imported and subsequently exported (in the same condition). If there is no customs duty or customs issue involved, how is the rebate application processed by the Summerside Tax Centre (STC)?
A. A rebate of tax paid with respect to goods that are imported and subsequently exported is available only if the specific requirements of the legislation are met. Subsection 215.1(1) of the Excise Tax Act (ETA) specifies that the goods must be imported on consignment or approval and must be exported within 60 days without having been used or consumed in Canada except on a trial basis. The application for rebate should be made to Canada Customs, who will rebate the GST in the case of casual importations, or will transmit the required information, upon approval, to STC to rebate the tax in other cases. If an application is made directly to STC on Form 189, the claimant will be directd to apply to Canada Customs.
Q.2 How does the STC process Type 1 (tax paid in error) GST 189 General Rebate applications that have no documentation attached?
A. Previously, the Filing Instructions for Form GST 189 stated that no documentation was required to be filed, but must be retained for verification purposes. Accordingly, when necessary, the General Rebate Unit of the STC requested any missing documentation from claimants for verification purposes. The new Filing Instructions for Form 189 (in the General Rebate Guide and Application Form dated May 1995) state that original receipts should be submitted with the application. When customs duty is involved and has previously been rebated by Customs and the claimant has submitted a copy of the B3, B2-1, or other transaction number, the reviewer is able to verify the information on the Customs Commercial System (CCS). If the information found on CCS agrees with the claim, it is paid. When a claim involves GST only, claimants may be asked to provide receipts to substantiate that GST was paid in error or paid twice.
Q.3. What criteria does the STC use to refer claims to Audit?
A. Claims that are accounts (e.g. GST Registrants) and are over a certain monetary threshold are auto-referred to the district office by the system. These thresholds vary depending on the type of account. Certain types of thresholds are established by Headquarters while others would be set by the District Office.
As well, any claim, whether an account or non-account type, that a reviewer feels warrants further investigation is also referred (e.g., of a suspicious nature).
Q.4. What happens to receipts when a claim is referred to the District Office?
A. For General Rebate claims, most claims are processed by the STC and any original documentation is returned to the claimant. Original documentation is returned as it may be the claimant's only proof of purchase, as well as to reduce the burden of storage space to the Department.
When processing a claim, reviewers make a note on the worksheet of any documentation that was attached, including Customs document numbers. In cases where a reviewer feels that the documentation attached will be of particular benefit to the auditor, he or she will send copies of the documents to the attention of the Audit Unit Manager. However, receipts are not returned to claimants until a decision has been reached on the claim (i.e., a NOA produced). In the past, receipts were returned once the claim was monitored, regardless of whether or not the claim was referred to District Office. As of July 18, 1994, claims are being dressed with input code 99 (if they have receipts attached). This triggers a Return Receipt Letter, but only once a decision has been reached on the claim. If an auditor requires receipts for audit purposes, he or she may obtain them directly from the STC. Presumably, in the case of General Rebate claims, an audit will be claim-specific and all relevant information will be on-hand at the STC. If all relevant information has been submitted with the claim, then no contact with the claimant is necessary. If this is not the case, then an auditor may contact the claimant.
Q.5. Please provide an explanation of how claims involving warranty work and Customs duty are received.
A. Goods that are imported after having been exported for warranty repair work are non-taxable upon importation, if they meet the conditions of paragraph 3(j) of the Non-Taxable Imported Goods (GST) Regulations. Similarly, repair parts provided free of charge under a warranty are non-taxable upon importation, under section 5 of Schedule VII to the ETA. General Rebate claims involving GST paid in error on goods returned for warranty work are received by the STC in a number of formats. The claims may be received directly from the claimant or may be forwarded to the STC by the Visitor Rebate Program. For claims that should have been submitted to Customs, the STC disallows the 189's in the system and requests that the an application be made to Customs. (If a Customs refund application form is sent to the STC in error, the documents will be forwarded to Customs).
Should you have further questions regarding this matter, please contact Mark Seigel of the Imports Unit at (613) 952-1512.
H.L. Jones
Director
General Applications Division
GST Rulings and Interpretations
XXXXX
| c.c.: |
Susan Mailer
Mark Seigel
Patrick McKinnon, Administration & Enforcement Unit
XXXXX
Gerard Dillon, Summerside Tax Centre |
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