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 Specialty Tax Directorate
Place de Ville, Tower A, 11th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
September 28, 2023
Dear [Client]:
Subject: Excise Ruling for Approved Formulation – […][The Product]
Thank you for your letter of September 15, 2023 concerning the application of the Excise Act, 2001 to an alcohol-based product that […][the Company] intends to import for use in Canada. Attached to the letter was the Material Safety Data Sheet and product specification for the product, […] that […][the Company] intends to import.
All legislative references are to the Excise Act, 2001 (Act) and the regulations therein, unless otherwise specified.
.
STATEMENT OF FACTS
Our understanding of the facts from your letter and attachments is as follows:
1. […][The Company] is located at […][City][Province] and its importer account number is [#].
2. […][The Company] is a manufacturer of […].
3. […][The Company] intends to import an alcohol-based product, specified in your letter as […][the Product], from vendor […][the Vendor] in […][Country A].
4. According to the vendor’s Material Safety Data Sheet, the alcohol-based product, […][the Product], is comprised of: […][list of specifications]
5. The alcohol-based product, […][the Product], would be imported and used in Canada for […] manufacturing purposes as a lubricant for tool insertion. Despite efforts to locate alternate and domestic suppliers, the sole source of this product is […][the Vendor].
RULING REQUESTED
You would like to know if the alcohol-based product, […][the Product], would meet the definition of “approved formulation” in section 2 of the Act.
RULING GIVEN
Based on the facts set out above and on the advice of the Science and Engineering Directorate, we rule that the alcohol-based product, […][the Product], is an “approved formulation” under paragraph (b) of the definition of that term in section 2 of the Act. This ruling applies to any sizes of the product.
In accordance with the qualifications and guidelines set out in Excise and GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the CRA is bound by the ruling given in this letter provided that none of the issues discussed are currently under audit, objection, or appeal; no future changes to the Excise Act, 2001, regulations or the CRA’s interpretative policy affect its validity; and all relevant facts and transactions have been fully and accurately disclosed.
EXCISE DUTY IMPLICATIONS
As an approved formulation, the alcohol-based product, […][the Product], is excluded from the definition of spirits in section 2. Therefore, […][the Company] may import it without requiring a licence under the Act and the goods are not subject to the additional duty equal to excise duty.
If you have any questions or require any clarification on the above matter, please call me at (587) 580-7042.
Yours truly,
Scott Hendrick
Manager, Excise Duty Operations – Alcohol
Excise Duty Division
Excise and Specialty Tax Directorate
Cc Excise Duty Manager
Ontario Region
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