11645-1(RMcK)XXXXX
May 5, 1997
XXXXX
I refer to your E-mail message of January 10, 1997, to XXXXX, a copy of which was forwarded to this office for reply. The message concerns a rebate of tax on goods imported, tax paid and subsequently exported.
In your E-mail message you state that:
1. XXXXX is a non-registrant non-resident company located in XXXXX and that it imported goods into Canada for sale.
2. On importation full GST was paid.
3. The goods were then warehoused pending sale.
4. Due to unforseen circumstances, the Canadian sales opportunity disappeared[.] The goods were not sold in Canada.
5. The importer found new sales opportunities in XXXXX and exported the goods to XXXXX without using them in Canada.
6. Customs re-imbursed XXXXX all duty paid on the imported goods but they only refunded a portion of the GST.
You have asked the following question:
Can the non-resident non-registrant importer be re-imbursed the amount of GST paid on the goods exported to XXXXX
General Comments provides that
"Where
(a) person paid tax under this Division on goods that were acquired by the person on consignment, approval, sale-or-return basis or other similar terms,
(c) within four years after the tax was paid, the person files with the Minister an application, in prescribed form containing prescribed information, for a rebate of the tax, the Minister shall subject to section 263, pay a rebate to the person equal to the amount of tax paid on the goods."
The amendment to paragraph 215.1(1)(c) of the Act indicates that effective April 24, 1996 this paragraph is replaced by the following:
"within two years after the day the tax was paid, the person files with the Minister an application containing prescribed information, for a rebate of the tax, ...."
While subsection 215.1(1) of the Act provides for a rebate of tax for returned goods in circumstances where the goods were acquired by the person on consignment, approval, sale-or-return basis etc., the Act requires that in order to claim the rebate the goods must be exported within 60 days after their release for the purpose of returning them to the supplier.
On the basis of the information supplied, the goods do not meet the requirements of this section of the Act. The reason being that (a) they were not exported within 60 days and (b) they were not returned to the supplier. Therefore, a rebate is not possible.
In addition, there are no provisions in the Act that would allow for a rebate to be claimed or paid in the circumstances which you have described. At the time of importation the tax was properly applied.
You have indicated that Customs refunded a part of the GST paid on the exported goods based on a memorandum from Customs Headquarters. Based on the definition of duties in Section 2 of the Customs Act, a drawback of the GST is not possible. The GST is specifically excluded from the drawback provisions of the Customs Act. While a rebate might have been possible for that portion of the goods exported within 60 days, this would only apply if the goods were returned to the supplier. Since it does not appear that any portion of the goods was returned to the supplier the refund or rebate of GST on any part of the exportation if approved by Customs was improper.
Duties on goods may be deferred by using the Customs bonded warehouse procedures, if the goods are not for immediate use or supply. If the non-resident company had availed itself of that procedure, then the goods would not have been subject to duties at time of importation. However, at time of removal from the bonded warehouse all duties would become payable. The specific provision of the Act when dealing with goods in bonded warehouse is Section 144.
While the non-resident non-registrant importer is not entitled to a rebate of any portion of the tax paid at time of importation, it may wish to examine its current position to determine if it should be registered in order to be in a position to claim input tax credits where it is acquiring goods for use in it's commercial activity.
Please contact me at (613) 952-4294 if you have any questions or require further information.
Roy McKain
Senior Policy Officer
Border Issues Unit
General Operations and Border Issues Division
GST Rulings and Interpretations
Policy and Legislation Branch
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R. Nanner
R. McKain |
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