October 2013

NOTE: This version replaces the one dated October 2003.

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

• Definitions
• User's licence
• Other licence types
• Rates of excise duty
• Determining the volume of alcohol
• Possession and transportation of bulk alcohol
• Possession and transportation of non-duty-paid packaged alcohol
• Uses or disposal of alcohol
• Permitted uses of bulk alcohol
• Importing alcohol
• Maintaining books and records
• Returns and payments
• Claiming refunds
• Enforcement

Definitions

1. The following terms are used in this memorandum, as per section 2^{Footnote 1}:

Absolute ethyl alcohol means the substance with a chemical composition of C₂H₅OH.

Alcohol means spirits or wine.

Alcohol licensee means a person who is a spirits licensee or a wine licensee.

An approved formulation is a product that is made with alcohol by a licensed user in accordance with a formula that has been approved by the CRA. It may also be an imported product that, in the opinion of the CRA, would be a product made in accordance with an approved formulation if it were produced in Canada by a licensed user.

Bulk alcohol means alcohol that has not been packaged.

A licensed user is a person who holds a user's licence issued under section 14 of the Act.

A marked special container of spirits is a container of a capacity greater than 100 litres, but not more than 1,500 litres, which has been marked in a prescribed form and manner to indicate that it is intended for delivery to and for use by registered users or at bottle-your-own premises.

A marked special container of wine is a container of a capacity greater than 100 litres that is marked in the prescribed form and manner to indicate that it is intended for delivery to and for use at bottle-your-own premises.

Non-duty-paid, in respect of packaged alcohol, means that excise duty, other than special duty, has not been paid on the alcohol. For additional information on the special duty, refer to paragraphs 67 to 70 of this memorandum.

Packaged alcohol means alcohol in a container with a capacity of not more than 100 litres, which is ordinarily sold to consumers without being further repackaged into smaller containers. Packaged alcohol also means alcohol which is in a marked special container.

A restricted formulation is an approved formulation on which the CRA has imposed conditions or restrictions under section 143, where it can only be used by a licensed user or be exported. Restricted formulations are a sub-category of approved formulations upon which the Act imposes additional controls.

The specified premises of a licensed user are the premises specified by the CRA under paragraph 23(3)(a) as being those where the activities of the licensed user may be carried on.

Take for use, in respect of alcohol, means to consume, analyse or destroy alcohol or to use alcohol for any purpose that results in a product other than alcohol.

User's licence

Requirement

2. In respect of paragraph 14(1)(c), a person who wishes to possess and use bulk alcohol, non-duty-paid packaged alcohol or a restricted formulation for specific purposes must obtain a user's licence. A licensed user cannot possess and use marked special containers. Also, they are not permitted to produce alcohol but they may use it to produce other products that may or may not contain alcohol, such as hair spray, baby gripe water, pill capsules, etc.

3. Provincially registered or licensed pharmacists who use alcohol in pharmaceutical preparations are required to have a user's licence. They must obtain CRA approval of the formulation to use non-duty-paid alcohol in these preparations. Refer to paragraphs 27 to 32 of this memorandum for details on formulation approval.

Obtaining a user's licence

4. Instructions and requirements for obtaining a user's licence are provided in Excise Duty Memorandum EDM2.2.1, Obtaining and Renewing a Licence.

5. Section 4 of the Regulations Respecting Excise Licences and Registrations states that a user's licence is valid for a maximum period of two years. The licensing letter issued by the CRA's regional excise duty office will specify the effective date and expiry date of the licence. In respect of section 9 of the Regulations, Form L63, Licence and Registration Application Excise Act, 2001, must be submitted for the licence renewal not less than 30 days before the day on which the licence expires.

Other licence types

6. Depending on the activities of a licensed user, other types of licences may be required. For example, a licensed user also requires a spirits licence or a wine licence to produce or package spirits or wine.

7. The requirement to have different types of licences depends on the licensed user's business operations. Under subsection 130(1), a licensed user that also has a wine licence is authorized to use bulk spirits to fortify wine that will have an alcoholic strength that does not exceed 22.9% absolute ethyl alcohol by volume. Sections 131 and 131.1 state that a licensed user that also has a spirits licence is authorized to blend bulk wine with spirits if the resulting product is spirits, and use bulk wine to produce spirits.

8. For more information on excise duty licence types and the activities that may be performed under those licences, refer to Excise Duty Memorandum EDM2.1.1, Licence Types. Additional information on the production and packaging of spirits and wine is available in Excise Duty Memoranda EDM3.1.1, Producers and Packagers of Spirits, and EDM4.1.1, Producers and Packagers of Wine.

Rates of excise duty

9. The rates of excise duty applicable to spirits and wine are available in Excise Duty Memorandum EDM1.5.1, Rates of Excise Duty. Historical rates can be obtained at: www.cra-arc.gc.ca/formspubs/prioryear/edrates/README.html.

10. A special duty is imposed on imported spirits. Refer to paragraphs 67 to 70 of this memorandum for more information on importing alcohol and special duty on imported spirits.

Determining the volume of alcohol

11. In respect of subsection 148(1), a licensed user is required to determine the volume and absolute ethyl alcohol content of alcohol in a manner specified by the CRA using approved instruments. The CRA has approved several types of instruments for this purpose, including thermometers, hydrometers, and mass flow measuring systems. However, each individual instrument that a licensed user uses for excise duty purposes must also be approved by the CRA.

12. Information relating to specifications and procedures to follow in determining the volume and alcohol strength is available in Excise Duty Memorandum EDM1.1.5, Instrument Approval.

Possession and transportation of bulk alcohol

13. Under paragraphs 70(2)(a) and (b), a licensed user may possess bulk alcohol produced or imported by an alcohol licensee. Also, under paragraph 70(2)(c), a licensed user may possess bulk alcohol that they have imported. Licensed users who possess bulk alcohol in accordance with the Act may also transport the alcohol.

14. According to paragraph 70(2)(d), bulk alcohol imported by a licensed user may be transported on their behalf by alcohol registrants. Information on the transportation and storage of bulk alcohol by alcohol registrants is available in Excise Duty Memorandum EDM3.1.4, Alcohol Registrants.

Possession and transportation of non-duty-paid packaged alcohol

15. Under subparagraphs 88(2)(a)(ii) and (c)(i), a licensed user may possess, in their specified premises, non-duty-paid packaged alcohol (that is not in a marked special container), if the alcohol is packaged by an alcohol licensee or imported by an excise warehouse licensee, or the alcohol is imported by the particular licensed user.

16. Subparagraph 88(2)(c)(ii) allows a person prescribed under the Regulations Respecting the Possession of Non-Duty-Paid Packaged Alcohol to transport non-duty-paid packaged alcohol, other than in marked special containers, on behalf of a licensed user. This includes a person who is authorized under the Customs Act as a customs bonded carrier or any other person who has in its possession acceptable documentation showing that it is transporting the packaged alcohol.

Uses or disposal of alcohol

17. Under sections 73 and 90, a licensed user may use, or dispose of, bulk alcohol or non-duty-paid packaged alcohol under specific conditions, which are explained below.

Alcohol used in approved formulations

18. In light of the definition in paragraph 1, approved formulations are non-potable products or products that, in the opinion of the CRA, present a minimal risk that the alcohol contained in the formulation will be diverted to a use that is subject to excise duty.

19. Under paragraphs 73(a) and 90(a), a licensed user may use bulk alcohol or non-duty-paid packaged alcohol in an approved formulation. Section 144 states that excise duty is relieved on bulk and non-duty-paid packaged alcohol used by a licensed user in approved formulations.

20. Pursuant to section 143, the CRA may impose any conditions or restrictions that may be considered necessary in respect of the making, importation, packaging, use or sale of an approved formulation or in respect of any other dealing with an approved formulation. A licensed user who produces or receives approved formulations that have conditions imposed under section 143 must comply with those conditions or restrictions. The licensed user must also maintain adequate records to verify their compliance.

21. A licensed user must report all quantities of alcohol used to make approved formulations under "Reductions to inventory" on page 3 (for spirits) or page 4 (for wine) of Form B263, Excise Duty Return – Licensed User.

Restricted formulations

22. Section 93.1 states that a licensed user can only use or dispose of restricted formulations in accordance with the conditions or restrictions imposed by the CRA. That means they must use them, supply them to another licensed user or export them. Also, according to section 206, the licensed user must maintain adequate records to verify their compliance.

23. Under section 93.2, only a licensed user or an alcohol registrant may possess restricted formulations.

24. A licensed user who receives restricted formulations must use them in accordance with their licence. For example, the restricted formulation may be:

• an ingredient used to produce another approved formulation that does not have restrictions, or
• used in a process in which it is destroyed in an approved manner.

25. In addition to reporting the alcohol used to make the restricted formulation, a licensed user must report all restricted formulations on page 5 of Form B263, Excise Duty Return – Licensed User.

Liquid homeopathic products

26. Liquid homeopathic products are potable and they generally contain a high percentage of alcohol by volume. Homeopathic products approved as formulations are approved by the CRA with the condition that the container cannot be greater than 60 mL in capacity. This size limit is intended to minimize the risk of diversion to other purposes that are not medicinal. Formulations packaged in containers larger than 60 mL are subject to excise duty.

Approval required

27. All formulations, in which a licensed user wishes to use alcohol relieved of excise duty, must first be approved by the CRA. Excise duty regional managers are responsible for formulation approvals, based on the recommendation of the Science and Engineering Directorate ^{Footnote 2} (SED) of the Canada Border and Services Agency (CBSA).

28. A licensed user seeking approval of a formulation must submit a completed Form Y15D, Request for Formula Approval. The following must accompany the form: a sample of the formula, the formulation containing the name of the preparation, a full listing of the formula's ingredients and quantities and details of the planned usage of the formula.

29. The form and all accompanying samples and information must be sent to the following address:

Manager, Alcohol and Tobacco Section
Analytical and Forensic Services Division
Science and Engineering Directorate
79 Bentley Avenue
Ottawa, ON K2E 6T7

30. Detailed instructions for requesting approval of a formulation and submitting samples to the SED laboratory are available in Excise Duty Memorandum EDM1.1.6, Formulation Approval Process.

31. A licensed user will receive a letter from their regional excise duty office informing them of whether the formulation was approved and any conditions imposed. They will also receive a copy of the approved formulation.

32. A licensed user may contact their regional excise duty office for further information on the approval process of liquid homeopathic products. A listing of these offices is included in Excise Duty Memorandum EDM1.1.2, Regional Excise Duty Offices.

Alcohol used in a process in which it is destroyed

33. Under paragraphs 73(b) and 90(b), a licensed user may use bulk or non-duty-paid packaged alcohol in a process in which the absolute ethyl alcohol is destroyed. In such cases, under paragraphs 145(1)(c) and (2)(c) and subsection 145(3), excise duty is not payable on the alcohol that is destroyed.

34. Before using any alcohol in a process where the alcohol is destroyed as a result of the process, a licensed user must first obtain approval of that process from their regional excise duty office.

35. To request approval of a process in which alcohol is destroyed, a licensed user must submit a written request to their regional excise duty office. The request must be specific, outline all inputs and outputs (including quantities) and the various steps of the process, and include information on any reclaimed or residual alcohol and its disposition (e.g., recycled or disposal). A sample of the final product made by the process must also be submitted for analysis.

36. The sample and process will be analyzed by the SED laboratory. The regional excise duty office will review the submission and the laboratory results to determine if the alcohol is sufficiently destroyed during the process. An excise duty officer may visit the licensed user's premises to verify the proposed process and to match it to the submission.

37. A licensed user will receive a letter from their regional excise duty office informing them whether the process is approved and outlining any conditions imposed.

38. All uses of alcohol are reviewed during compliance visits to ensure that the alcohol has been used in accordance with approved processes or other approvals.

39. A licensed user must report all quantities of alcohol that was destroyed as a result of a process under "Reductions to inventory" on page 3 (for spirits) or page 4 (for wine) of Form B263, Excise Duty Return – Licensed User.

Alcohol used in the production of vinegar

40. Under paragraphs 73(c) and 90(c), a licensed user may use bulk or non-duty-paid packaged alcohol to produce vinegar. In such cases, according to subsection 146(1), excise duty is not payable, provided at least 0.5 kilograms of acetic acid is produced from every litre of absolute ethyl alcohol used. Acetic acid is the main component of vinegar (apart from water) and has a distinctive sour taste and pungent smell.

41. Subsection 146(2) states that if a licensed user produces vinegar using alcohol, and less than 0.5 kilograms of acetic acid is produced from every litre of absolute ethyl alcohol used, the licensed user is deemed to have taken for use the deficiency. This deficiency is determined by multiplying by two the number of kilograms of acetic acid produced (B), and subtracting the result from the number of litres of absolute ethyl alcohol used (A) (i.e., the deficiency formula is A ­– [2 × B]).

42. Under sections 126, 128, 134 and 137, where alcohol is deemed to be taken for use, the excise duty is payable at the time the deficiency occurs (i.e., at the time the vinegar is produced). The excise duty is payable by the person who is responsible for the alcohol, in the case of bulk alcohol, and by the licensed user who produced the vinegar, in the case of non-duty-paid packaged alcohol.

43. A licensed user must report all quantities of alcohol that was used in the production of vinegar under "Reductions to inventory" on page 3 (for spirits) or page 4 (for wine) of Form B263, Excise Duty Return – Licensed User.

Alcohol returned to a supplier

44. Under paragraph 73(e), a licensed user may dispose of bulk alcohol by returning it to the alcohol licensee who was previously responsible for it or who supplied it to the licensed user.

45. In the case of non-duty-paid packaged alcohol, paragraph 90(d) states that a licensed user may also dispose of such alcohol by returning it to the excise warehouse licensee who supplied it. According to section 2 of the Return of Packaged Alcohol to an Excise Warehouse Regulations, at the time of the return, the alcohol must be packaged in the same container in which it was packaged when it was removed from the warehouse, and:

• the package must be unopened; or
• if opened, it must have been opened by the licensed user solely for the purpose of analysis in a manner approved by the CRA.

46. A licensed user must report all quantities of alcohol that were returned to a supplier under "Reductions to inventory" on page 3 (for spirits) or page 4 (for wine) of Form B263, Excise Duty Return – Licensed User.

Exported alcohol

47. Under paragraphs 73(f) and 90(e), a licensed user that has imported either bulk alcohol or non-duty-paid packaged alcohol may dispose of it by exporting it.

48. A licensed user must report all quantities of bulk or non-duty-paid alcohol that was exported under "Reductions to inventory" on page 3 (for spirits) or page 4 (for wine) of Form B263, Excise Duty Return – Licensed User.

Alcohol used for analysis

49. Under paragraphs 73(g) and 90(f), a licensed user is permitted to use bulk alcohol or non-duty-paid packaged alcohol for analysis in a manner approved by the CRA. There may also be occasions where the CRA will take samples for analysis. In such cases, according to paragraphs 145(1)(a) and (2)(a) and subsection 145(3), excise duty is not payable on such alcohol.

50. Research and development is not considered to be analysis. Alcohol is considered to be used for analysis when it is used:

• for determining the volume and absolute ethyl alcohol content of the alcohol;
• for analytical and chemical testing; or
• for quality control purposes.

51. In all cases, the quantity of alcohol used for analysis must be reasonable in the circumstances.

52. A licensed user must submit a written request to their regional excise duty office for approval of their method of analysis. Licensees must specify if the request is for a specific incident or is for an ongoing basis. The request must state the reason for analysis (e.g., alcoholic strength, quality controls), where it will be analyzed (e.g., on-site lab), the frequency, the quantity taken for analysis and the controls that are in place. The licensed user must maintain adequate books and records to support their claims.

53. A licensed user may also contact their local regional excise duty office for further information before analyzing alcohol.

54. A licensed user must report the quantities of bulk alcohol or non-duty-paid packaged alcohol that were used for analysis in a manner approved by the CRA, under "Reductions to inventory" on page 3 (for spirits) or page 4 (for wine) of Form B263, Excise Duty Return – Licensed User.

Voluntary destruction of alcohol

55. Under paragraphs 73(h) and 90(g), a licensed user may destroy bulk alcohol or non-duty-paid packaged alcohol in a manner approved by the CRA. In such cases, according to paragraphs 145(1)(b) and (2)(b), excise duty is not payable on such alcohol.

56. A licensed user must submit a written request to their regional excise duty office for approval of their method of destruction. The request must state the location of destruction, the method of destruction, whether the approval is for a specific incident or for all destructions, and the controls that are in place. The licensed user must maintain adequate books and records to support their claims.

57. A licensed user may contact their local regional excise duty office for further information and to have their methodology approved before destroying alcohol.

58. A licensed user must report the quantities of bulk alcohol or non-duty-paid packaged alcohol that was destroyed in a manner approved by the CRA under "Reductions to Inventory" on page 3 (for spirits) or page 4 (for wine) of Form B263, Excise Duty Return – Licensed User.

Permitted uses of bulk alcohol

Fortifying wine

59. In respect of paragraph 73(d), section 130 states that a licensed user who is also a wine licensee may use bulk spirits to fortify wine. The alcohol strength of the fortified wine cannot exceed 22.9% absolute ethyl alcohol by volume. The excise duty imposed under the Act or levied under section 21.1 of the Customs Tariff on the spirits used to fortify the wine is relieved in these circumstances.

60. A licensed user that also has a wine licence must report the quantities of bulk spirits that were used to fortify wine under "Reductions to Inventory" on page 3 of Form B263, Excise Duty Return – Licensed User. The quantity of fortified wine produced is reported under "Additions to bulk inventory – Receipts from licensed users" on page 3 of Form B265, Excise Duty Return – Wine Licensee.

Blending wine with spirits

61. According to section 131, and in respect of paragraph 73(d), a licensed user who is also a spirits licensee may blend bulk wine with spirits if the resulting product is spirits (i.e., greater than 22.9% of absolute ethyl alcohol). In such a case and according to section 131.2, the excise duty that would be imposed, under section 122 or levied under section 21.1 of the Customs Tariff, on the spirits that were blended with the wine is relieved, and the spirits are deemed to be produced at the time of blending. Therefore, under section 122, excise duty is imposed at the time of blending.

62. A licensed user that also has a spirits licence must report the quantities of bulk wine that was blended with spirits under "Reductions to Inventory" on page 4 of Form B263, Excise Duty Return – Licensed User. All quantities of spirits produced are reported under "Additions to bulk inventory – Spirits produced" on page 3 of Form B266, Excise Duty Return – Spirits Licensee.

Using wine to produce spirits

63. Under section 131.1, a licensed user who is also a spirits licensee may use bulk wine to produce spirits. All spirits produced by blending wine with spirits or using bulk wine are produced under the spirits licence.

64. A licensed user that also has a spirits licence must report the quantities of bulk wine that was used under "Reductions to Inventory" on page 4 of Form B263, Excise Duty Return – Licensed User. All spirits produced are reported under "Additions to bulk inventory – Spirits produced" on page 3 of Form B266, Excise Duty Return – Spirits Licensee.

Importing alcohol

65. A licensed user may import bulk alcohol under section 75 and non-duty-paid packaged alcohol under subparagraph 88(2)(c)(i).

66. Subsection 150(2) states that where a licensed user imports packaged alcohol and it is released to them under the Customs Act without the payment of excise duty, that alcohol must be immediately entered into their specified premises.

Special duty on imported spirits

67. According to subsection 133(1), a special duty is imposed on imported spirits that are delivered to or imported by a licensed user. This special duty, which rate is set under Schedule 5 at $0.12 per litre of absolute ethyl alcohol, is in addition to the duty levied under section 21.1 or 21.2 of the Customs Tariff.

Liability ­– spirits licensee

68. According to subsection 133(2), where imported bulk spirits are delivered to a licensed user by a spirits licensee, the special duty is payable at the time the spirits are delivered by:

• the spirits licensee responsible for the spirits at that time;
• the spirits licensee who was last responsible for the spirits if the licensed user is responsible for them at the time of their delivery; or
• the spirits licensee who delivered the spirits if the licensed user is responsible for them at that time, and no spirits licensee was previously responsible for them.

Liability – excise warehouse licensee

69. Under subsection 133(3), if imported packaged spirits or imported spirits that have been packaged in Canada are removed from an excise warehouse for delivery to a licensed user, the special duty is payable by the excise warehouse licensee at the time they are removed from the warehouse.

Liability – licensed user

70. Under subsection 133(4), when a licensed user imports bulk or packaged spirits, the special duty is payable by the licensed user at the time of importation in accordance with the Customs Act. The licensed user is required to submit this information on a separate line of the CBSA entry document. As a result, the special duty is not to be reported on the licensed user's Form B263, Excise Duty Return – Licensed User.

Maintaining books and records

71. Pursuant to subsection 206(1), every person who has a licence is required to maintain all books and records that are necessary to determine whether they are in compliance with the Act.

72. Detailed information on the requirement to maintain books and records is available in Excise Duty Memorandum EDM 9.1.1, General Requirements for Books and Records.

Returns and payments

73. Under section 160, a licensed user is required to file Form B263, Excise Duty Return – Licensed User, for each reporting period, calculate any excise duty payable in that return and pay the amount owing. The return and payment are due no later than the last day of the first fiscal month that follows the reporting period.

74. A licensed user who has more than one licence must file a separate return for each licence. For example, a licensed user that also has a wine licence and a spirits licence is required to file Form B265, Excise Duty Return – Wine Licensee, and Form B266, Excise Duty Return – Spirits Licensee, in addition to Form B263.

75. A licensed user who is required to file returns will receive personalized returns from the CRA. Those forms, which are prescribed, contain pre-printed information and are sent by mail in advance of the due date of the return. If a licensee does not receive personalized returns, they may obtain a non-personalized return for their specific licence type from the CRA webpage at www.cra-arc.gc.ca/tx/tchncl/xcsfrms/menu-eng.html.

76. For more detailed information on the requirements to file returns and pay excise duty, refer to Excise Duty Memorandum EDM10.1.1, Returns and Payments. Information and instructions on how to complete a licensed user's duty return is available in Excise Duty Memorandum EDM10.1.4, Completing an Excise Duty Return – Licensed User.

Reporting period – monthly

77. As per subsection 159(1), where a licensed user has determined a fiscal month for GST/HST purposes, the same fiscal month applies for excise duty purposes. Where such a fiscal month has not yet been determined, the licensee may choose a fiscal month using established GST/HST rules, or use a calendar month. In this case, the licensed user must notify the CRA of their fiscal months using Form B268, Notification of Fiscal Months . This form will be provided to the licensed user at the time a licence is issued, and must be signed by an authorized individual.

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

Reporting period – fiscal half-year

79. Although the reporting period of a licensed user is generally a fiscal month, the licensed user may apply to the CRA to have a reporting period that is a fiscal half-year instead of a fiscal month. A licensed user with a fiscal half-year reporting period will file its returns on a semi-annual basis.

80. As per subsection 159(1.1), a licensed user may determine their fiscal half-years with 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.

81. Pursuant to subsection 159.1(2), a licensed user must apply for fiscal half-year reporting periods by completing Form B284, Election or Revocation of the Election for Semi-annual Reporting. The CRA may authorize the licensed user to file their returns on a fiscal half-year basis if the following conditions are met:

• the licensed user has been licensed for at least 12 consecutive fiscal months;
• the licensed user is in compliance with the Act;
• the total of all excise duties payable by the licensed user and any associated person did not exceed $120,000 in the previous or current fiscal year; and
• the liability of the licensed user and any associated licensed user with respect to excise duty on alcohol entered into their specified premises did not exceed $120,000 in the previous or current fiscal year.

82. Additional information on fiscal half-year reporting periods and the conditions that must be met by a licensed user is available in Excise Duty Notice EDN40, Semi-Annual Reporting Period for Certain Licensees.

Branches or divisions filing separate returns

83. Subsection 164(1) states that a licensed user that has branches or divisions with distinct operations under their user's licence may apply to the CRA for authority to file separate returns for each branch or division. This request can be made by completing Form B269, Application or Revocation of the Authorization to File Separate Excise Duty Returns and Refund Applications for Branches or Divisions.

Claiming refunds

84. Under subsection 175(1), a licensed user may apply for a refund of an amount as excise duty, special duty paid on imported spirits, interest or any other amount paid under the Act in circumstances where the amount was not payable, whether it was paid by mistake or otherwise. A refund or a deduction of excise duty can only be claimed by submitting a completed Form B256, Excise Act, 2001 – Application for Refund/Deduction, within two years after the amount was paid.

Restrictions

85. Subsection 189(4) states that a refund will not be paid to a licensed user until the licensee has filed with the CRA or the CBSA all returns or other records that are required to be filed under the Excise Act, 2001, the Air Travellers Security Charge Act, the Customs Act, the Excise Act, the Excise Tax Act, and the Income Tax Act.

86. Detailed information concerning the process and the legislative requirements for obtaining a refund is available in Excise Duty Memorandum EDM10.3.1, Refunds.

Enforcement

87. Under Part 6, a licensed user who fails to comply with the Act may be subject to a penalty or face charges under the Act.