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
5th floor, Tower A, Place de Ville
320 Queen Street
Ottawa ON K1A 0L5
[Client] [Address]
Case Number: 9000392
Business Number: [####]
Attention: [Individual]
Director, Taxation
December 3, 2025
Dear [Individual]:
Subject: Technical Interpretation – Treatment of the [Fee] charged by the [Purchaser] with respect to the dutiable amount
Thank you for your correspondence of October 2, 2025 concerning the treatment of the [Fee] charged by the [Purchaser] with respect to the dutiable amount defined under section 2 of the Excise Act, 2001.
All legislative references are to the Excise Act, 2001 (Act) unless otherwise specified.
Interpretation Requested
You would like to know the following:
1. What provisions of the Excise Act, 2001 and the Excise Tax Act (ETA) specify that the [Purchaser’s fee]must be included in the calculation of the dutiable amount?
2. How does the Canada Revenue Agency (CRA) interpret the term “consideration” as defined under section 123 of the ETA in the context of mandatory deductions or allowances that are reflected directly on invoices?
3. Does the CRA distinguish the [Purchaser’s fee] from discounts, allowances, or price adjustments that are recognized under GST/HST policy (§232.1 ETA) and related CRA publications as reducing consideration?
Interpretation Given
This interpretation will focus solely on your question and concern regarding the provisions of the Excise Act, 2001. Any request for interpretation related to the Excise Tax Act should be made to the GST/HST Rulings Directorate of the CRA; therefore, we will only be providing an interpretation with respect to your first question. With confirmation from you, we can forward your other questions regarding ETA provisions to the GST/HST Rulings Directorate. For more information on GST/HST enquiries, please consult GST/HST Memorandum 1-4 – Excise and GST/HST Ruling and Interpretations Service.
The [Fee] charged by [Purchaser], representing [percentage amount] of the cannabis products purchased from a vendor, cannot be subtracted from the dutiable amount as defined under section 2 of the Act.
Explanation
Section 2 of the Act defines “dutiable amount” as follows:
dutiable amount, in respect of a cannabis product, means
(a) if paragraph (b) does not apply, the amount determined by the formula
A × [100%/(100% + B + C)]
where
A is the total of the following amounts that the purchaser is liable to pay to the vendor by reason of, or in respect of, the sale of the cannabis product:
(i) the consideration, as determined for the purposes of Part IX of the Excise Tax Act, for the cannabis product,
(ii) any additional consideration, as determined for the purposes of that Part, for the container in which the cannabis product is contained, and
(iii) any amount of consideration, as determined for the purposes of that Part, that is in addition to the amounts referred to in subparagraphs (i) and (ii), whether payable at the same or any other time, including, but not limited to, any amount charged for or to make provision for advertising, financing, commissions or any other matter,
B is the percentage set out in paragraph 2(a) of Schedule 7, and
C is
(i) if additional cannabis duty in respect of a specified province is imposed on the cannabis product, the prescribed percentage in respect of the specified province, or
(ii) in any other case, 0%; and
(b) in prescribed circumstances, the amount determined in prescribed manner.
At this time, nothing is prescribed under the Act or its regulations with respect to paragraph (b) of the definition of “dutiable amount”. Focusing on paragraph (a) stated above, variable A represents the total amount of consideration the purchaser is liable to pay the vendor for the sale of the cannabis product. The first consideration is determined under Part IX of the Excise Tax Act (ETA). Consideration is expanded to include additional amounts for the container of the cannabis product, as well as a non-exhaustive list of any amount related to the sale of the cannabis product that could be charged by the vendor in determining the dutiable amount as outlined in subparagraphs (ii) and (iii) to variable A of the definition.
There are no provisions in the Act that allow for a fee charged by the purchaser to be subtracted from the calculation of the “dutiable amount” as defined in section 2 of the Act. The intent of the calculation is to represent the cannabis producer’s selling price for the cannabis product, not including any excise duties.
The [Fee] is charged to the cannabis licensee by the [Purchaser]. This is effectively a separate and incidental transaction from the selling price of the cannabis product charged by the vendor to the [Purchaser] and does not directly impact the sales price of the cannabis product itself.
DISCLAIMER
The interpretation provided in this letter, including any additional information, is not a ruling and does not bind the CRA with respect to a particular situation. Future changes to the Act, regulations, or the CRA’s interpretative policy could affect the interpretation or the additional information provided herein.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at[Phone number].
Sincerely,
Angelique St-Pierre
Senior Rulings Officer
Cannabis Unit
Excise Duty Division
Excise and Specialty Tax Directorate
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