Returns and Payments

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EDM10.1.1 Returns and Payments

July 2013

NOTE: This version replaces the one dated July 2003 and revised May 2004.

This memorandum explains the procedures and requirements for filing excise duty returns and for making payments of any duties owing under the Excise Act, 2001 (the Act).

Disclaimer:
The information in this memorandum does not replace the law found in the Act and its regulations. It is provided for your reference. As it may not completely address your situation, you may wish to refer to the Act or its regulations, or contact any Canada Revenue Agency regional excise duty office for additional information. These offices are listed in Excise Duty Memorandum EDM1.1.2, Regional Excise Duty Offices .

Table of Contents

Filing excise duty returns

General

1. Section 160 Footnote 1 requires every person who is licensed under the Act to file an excise duty return with the CRA for each reporting period.

2. Under section 161, every non-licensed person who is required to pay excise duty in respect of any fiscal month is required to file an excise duty return with the CRA for that month.

3. Excise duty returns should be sent by regular mail to the Summerside Tax Centre, at the following address:

Canada Revenue Agency
Summerside Tax Centre
275 Pope Road, Suite 101
Summerside, PE C1N 6E7

4. Although section 166 provides for electronic filing, currently, the CRA has not approved any means to file excise duty returns electronically. Therefore, all persons who are required to file an excise duty return must submit a paper return to the CRA.

Branches or divisions

5. Subsection 164(1) states that a licensee who engages in one or more activities in more than one branch or division may apply to the CRA to be authorized to file separate excise duty returns and refund applications for each separate branch or division.

6. The CRA may provide authorization to file separate returns to a licensee, as per subsection 164(2), if the licensee can show that

  • the branch or division can be identified separately by reference to its location or the nature of its activities; and
  • separate records, books of account and accounting systems are maintained in respect of that branch or division.

7. To obtain permission to file separate returns for branches or divisions, or to cancel an authorization to file separate returns or refund applications, a licensee must file Form B269, Application or Revocation of the Authorization to File Separate Excise Duty Returns and Rebate Applications for Branches or Divisions , with a regional excise duty office or the Summerside Tax Centre. A complete list of the regional excise duty offices is available in Excise Duty Memorandum EDM1.1.2, Regional Excise Duty Offices .

8. The CRA may revoke the authority to file separate returns under subsection 164(3) if

  • the licensee requests the revocation in writing;
  • the licensee fails to comply with any conditions imposed by the CRA in respect of the authorization or any provision of this Act;
  • the CRA is no longer satisfied that the conditions stipulated for filing separate returns have been met; or
  • the CRA considers that the authorization is no longer required.

9. Where the CRA revokes an authorization to file separate returns, the licensee will be sent a written notice specifying the effective date of revocation.

Prescribed returns

10. Excise duty returns must be filed with the CRA in a prescribed form and manner, as stipulated in paragraphs 160(a) and 161(a). The CRA has developed a series of prescribed returns that are tailored to meet the specific requirements of each licensee type. See paragraph 13 for a list of those prescribed returns.

11. Since October 2003, the CRA provides personalized returns to all licensees who are required to file. These returns, containing pre-printed information, are sent by mail in advance of the due date of the return.

12. Licensees who do not receive a personalized return may obtain a non-personalized return for their specific licence type from the CRA Web site at www.cra-arc.gc.ca/tx/tchncl/xcsfrms/menu-eng.html.

Separate returns for separate licences

13. Where a licensee holds more than one type of licence under the Act, a separate return must be filed for each licence held. The following excise duty returns must be filed by each licensee type:

14. A person who is not licensed under the Act but who is required to complete an
excise duty return must file Form B270, Excise Duty Return - Non-Licensee , which is available on the CRA Web site at www.cra-arc.gc.ca/E/pbg/ef/b270/README.html.

Fiscal periods

Fiscal months

15. Under subsection 159(1), if a licensee has determined a fiscal month for GST/HST purposes, the same fiscal month can apply for purposes of excise duty. If fiscal months have not yet been determined, a person may choose a fiscal month using established GST/HST rules or use a calendar month.

16. Every licensee who is required to file an excise duty return under the Act must notify the CRA of their fiscal months using Form B268, Notification of Fiscal Months . This form will be provided to the licensee at the time a licence is issued under the Act, and must be signed by an authorized individual. Once completed, Form B268 must be returned to the regional excise duty office or sent directly to the Summerside Tax Centre. It can be obtained from the CRA Web site at www.cra-arc.gc.ca/E/pbg/ef/b268/README.html.

17. If a licensee wishes to change fiscal months, the manager of the licensee’s designated regional excise duty office must be notified in writing, and the following information must be included:

  • the legal name, mailing address, Business Number and RD account number of the licensee;
  • the current fiscal months;
  • the preferred fiscal months; and
  • an explanation of the reason the change in fiscal months is required.

Fiscal half-years

18. Under subsection 159(1.1), the fiscal half-years of a licensee are determined using the following rules:

  • the period beginning on the first day of the first fiscal month in a fiscal year and ending on the earlier of the last day of the sixth fiscal month and the last day in the fiscal year is a fiscal half-year of the person; and
  • the period, if any, beginning on the first day of the seventh fiscal month and ending on the last day in the fiscal year is a fiscal half-year of the person.

Reporting periods

Monthly

19. Subject to subsection 159.1(1), the reporting period of a person is a fiscal month unless an application is made by the person in prescribed form and manner to make the reporting period a fiscal half-year.

Semi-annual

20. Subsection 159.1(2) states that, upon receipt of an application in prescribed form and manner, the CRA may authorize in writing the reporting period to be a fiscal half-year if the following conditions are met:

  • the person is a licensee in one or more of the following categories:
    • an excise warehouse licensee who does not hold in their excise warehouse manufactured tobacco or cigars,
    • a spirits licensee,
    • a wine licensee, or
    • a licensed user;
  • the person has been licensed for more than 12 consecutive fiscal months;
  • the total of all duties payable under Part 4 (alcohol) by the person and any associated person did not exceed $120,000 in the previous and current fiscal year;
  • where the person is an excise warehouse licensee, the liability of the person and any associated excise warehouse licensee with respect to duty on alcohol entered into an excise warehouse
    • did not exceed $120,000 in the previous fiscal year ending, and
    • does not exceed $120,000 in the current fiscal year;
  • where the person is a licensed user, the liability of the person and any associated licensed user with respect to duty on alcohol entered into their specified premises
    • did not exceed $120,000 in the previous fiscal year, and
    • does not exceed $120,000 in the current fiscal year;
  • where the person is a spirits licensee, the volume of absolute ethyl alcohol added to the bulk spirits inventory of the person and any associated spirits licensee did not exceed the amount, as determined by the formula below, in the previous or current fiscal year:

A/B

  • where "A" is $120,000 and "B" is the rate of duty on spirits set out in section 1 of Schedule 4;
  • where the person is a wine licensee, the volume of wine added to the bulk wine inventory of the person and any associated wine licensee did not exceed the amount, as determined by the formula below, in the previous or current fiscal year,

A/B

  • where "A" is $120,000 and "B" is the rate of duty on wine set out in paragraph (c) of Schedule 6; and
  • the person is in compliance with the Act.

21. For more information on semi-annual filing, see Excise Duty Notice EDN27, New Reporting Period for Licensees .

22. Under subsection 159.1(3), the authorization to use fiscal half-years is deemed to be revoked in the following circumstances:

  • the total of all excise taxes payable by a licensee or any associated person exceeds $120,000; the revocation would be effective on the first day after the end of the fiscal half-year in which the excess occurs; or
  • an excise warehouse licensee holds manufactured tobacco or cigars in their excise warehouse; the revocation would be effective on the first day of the fiscal month in which the licensee begins to hold the tobacco or cigars.

23. Subsection 159.1(4) states that the CRA may revoke an authorization in any of the following conditions:

  • the person requests it in writing to the CRA;
  • the person fails to comply with the Act; or
  • the CRA considers that the authorization is no longer required.

24. As per subsection 159.1(5), if an authorization is revoked, the CRA will send a notice in writing of the revocation to the person and will specify the fiscal month for which the revocation becomes effective.

25. Under subsection 159.1(6), if a revocation made under one of the conditions listed in paragraph 23 becomes effective before the last day of a fiscal half-year, the period beginning on the first day of the fiscal half-year and ending immediately before the first day of the fiscal month for which the revocation becomes effective is deemed to be a reporting period of the person.

Information to include on a return

26. An excise duty return reports the activities of a particular licensee. It also includes identification information (i.e., Business Number, RD account number, legal name, mailing address of the business, period covered, and due date of the return), as well as revenue and production information. The reporting period production provides for an opening inventory, additions and deletions, any adjustments, and a closing inventory.

27. Every licensee who is required to file an excise duty return must calculate in the return the total amount of excise duty payable, if any, for a reporting period.

28. Every non-licensee who is required to file an excise duty return must calculate in the return the total amount of excise duty payable, if any, for that fiscal month.

29. Detailed instructions for licensees completing excise duty returns are available in the following excise duty memoranda:

30. Instructions for non-licensed persons completing excise duty returns are contained on the return.

Deductions or refunds

31. Section 162 allows a person to deduct from amounts payable any refunds owing under the Act. To be deductible, the refunds must be due to the person at the time an excise duty return is filed, and must be claimed in that return or another return, or in a separate application filed with that return. In any of these situations, the person is deemed to have paid, and the CRA is deemed to have refunded, an amount equal to the lesser of the amount payable and the amount refunded.

32. A licensee must complete Form B256, General Application for Refund of Excise Duty Under the Excise Act, 2001 , to claim a refund. In addition to the amount requested, the licensee must specify the reason for making the application. However, persons requesting a refund of excise duty on beer products must continue to use refund application Form N10, Refund/Credit Claim .

33. Additional information relating to refund procedures is provided in Excise Duty Memorandum EDM10.3.1, Refunds .

Small amounts payable or owing

34. Under section 165, if the total amount payable by a person to the CRA is $2 or less, the amount owing by the person is deemed to be nil and the person is not required to pay it.

35. If the total of the amount payable by the CRA to a person is $2 or less, the CRA is not required to pay the person. The CRA may, however, deduct this amount from any amount payable by the person.

Other information

36. Every person who is required to file an excise duty return under the Act must do so for each reporting period. Where no excise duty is payable for a reporting period, the person must still file a return.

37. An authorized individual must sign every excise duty return. Where a person is a corporation, an association, or organization that has duly elected or appointed officers, the president, vice-president, secretary or the treasurer (or other equivalent officers) of the corporation, association or organization are deemed to be duly authorized to sign the return. Returns filed by a sole proprietorship or a partnership should be signed by the proprietor or a partner.

38. In certain circumstances, an individual may be authorized under a power of attorney or other duly executed agency agreement to sign an excise duty return on behalf of another person.

39. Any return filed with incorrect or missing information, or calculation errors will be rejected. To avoid processing delays, the licensee should carefully verify each return before filing it. On most returns, the revenue portion must correspond with the production portion. For example, the quantity of a product that is indicated in the boxes in the revenue portion should be equal to the units and/or kilograms indicated in the boxes in the production portion. Also, where an amount is entered as "total additions" or "total reductions", the licensee should make sure that this amount reflects the sum of all additions and/or deletions, and that the correct amount is entered on the total line.

When to file

40. All licensees and non-licensed persons must file their excise duty returns to the Summerside Tax Centre (see the address in paragraph 3) no later than the last day of the first month following the reporting period to which the returns relate. When the due date of an excise duty return falls on a Saturday, Sunday or a public holiday, the due date will be the first business day following the weekend or holiday.

Example

An excise duty return for the reporting period ending September 30 is due on October 31. Since October 31 falls on a Saturday, the due date will be the first business day following the weekend, that is November 2.

41. Under section 300, the postmark date, in the case of an excise duty return that is mailed, will be deemed to be the filing date of the return. An excise duty return that is mailed on or before the due date of the return, but is not received by the Summerside Tax Centre by the due date, is not considered to be late-filed if the postmark is dated on or before the due date of the return. However, this procedure applies only to the filing of excise duty returns. This means that any payments owed must be received by the Receiver General on or before the due date of the return. See paragraph 51 for more information on the due date of a payment.

Extension of time to file

42. Under subsection 168(1), the CRA may, upon request by a person, extend the time limitations for filing an excise duty return.

43. If a licensee wishes to extend the time to file a return, the licensee must make a written request to the manager of their designated regional excise duty office, which will include the following information:

  • the legal name, mailing address, Business Number, and RD account number of the licensee;
  • the fiscal month and due date of the return to which the requested extension applies; and
  • details of the circumstances which have caused the licensee to be unable to meet the established due date and why an extension should be granted.

44. As per subsection 168(2), if a licensee is granted an extension of time, written approval will be provided by the CRA. If the time is extended as requested:

  • the return must be filed within the time so extended;
  • any excise duty payable by the licensee on that return must be paid within the time so extended;
  • any interest payable under section 170 is calculated from the day the extended time expires; and
  • any penalty payable under section 251.1 is calculated from the day the extended time expires.

Demand to file a return

45. The CRA may, under section 169, serve any person with a demand to file an excise duty return for any designated period within the time stipulated in the demand.

46. A person who fails to comply with a demand to file an excise duty return is liable to a penalty of $250 under section 251.

47. According to section 251.1, a person who fails to file a return for a reporting period as and when required will pay a penalty of 1% of the amount due and not paid for that reporting period plus one quarter of the amount of the 1% penalty multiplied by the number of complete months that the return was not filed, to a maximum of 12 months.

Making payments

48. Licensees can remit excise duty using one of the following methods:

  • electronically using My Payment. With My Payment, licensees can make payments online, through the CRA Web site, from an account at a participating Canadian financial institution. For more information on this self-service option, go to www.cra.gc.ca/mypayment;
  • electronically using a financial institution’s Internet or telephone banking service;
  • by regular mail, along with an excise duty return to the Summerside Tax Centre. Sufficient lead-time is required to ensure that the payment is received by the due date of the excise duty return, as the postmark date is not evidence of the day the payment is made;
  • at an authorized Canadian financial institution on or before the due date; the payment must be accompanied by a personalized, pre-printed remittance voucher RC158. The person making the payment should ensure that the appropriate portion of the remittance voucher is date-stamped. The date of the teller’s stamp will be considered as the date received. Excise duty returns are not accepted in conjunction with a payment made at an authorized financial institution.

49. In most cases, funds received on behalf of the Receiver General at a financial institution are credited electronically on the same day to the Receiver General’s account, and are dated accordingly. Payments made after hours at a financial institution usually bear the next day’s date.

50. Excise duty payable on an excise duty return must be paid to the Receiver General. Federal statutes require that all money payable to the Receiver General must be in Canadian dollars.

51. As per subsection 300(2), a payment of excise duty is considered to be received only when it is in the hands of the Receiver General. Therefore, any payments owed must be received by the Receiver General on or before the due date of the return. When the due date of a payment falls on a Saturday, Sunday or a public holiday, the due date will be the first business day following the weekend or holiday For example, if a payment is due on Good Friday, the amount owing must be received by the Receiver General no later than the following Tuesday, as Easter Monday is also a holiday.

52. Remittance vouchers are only available in personalized, pre-printed format. To replace lost remittance vouchers or to get a limited number of personalized forms (maximum of six), please contact the CRA at 1-800-959-5525. Additional information about remittance vouchers and obtaining replacements is available from the CRA Web site at www.cra-arc.gc.ca/formspubs/frms/ppr_nly-eng.html.

Large amounts owed

53. Section 163 states that every person who is required to pay $50,000 or more in a single payment to the Receiver General is required to pay the amount at one of the following financial institutions:

  • a bank;
  • a credit union;
  • a corporation authorized under the laws of Canada or a province to carry on the business of offering its services as a trustee to the public; or
  • a corporation authorized under the laws of Canada or a province to accept deposits from the public and that carries on the business of lending money on the security of real property or immovables, or investing in mortgages on real property or hypothecs on immovables.

Debts and the collections process

54. According to section 284, excise duty and other amounts payable under the Act are debts due to the Crown and may be recovered through the court process or in any other manner provided under the Act.

55. A person who owes excise duty or is late filing returns may receive a notice or a telephone call from a CRA official as a reminder of their obligation to pay past due excise duty or file outstanding returns.

56. Under section 170, any amounts owing under the Act that are not paid as and when required are subject to interest under the Act.

All of the excise duty memoranda are available on the CRA Web site at www.cra.gc.ca/exciseduty, under "Excise Act, 2001 – Technical Information".


Footnotes

Footnote 1

Unless otherwise stated, all legislative references in this memorandum are to the Excise Act, 2001.

Return to footnote 1 referrer


Date modified:
2013-07-25