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Memorandum D6-2-6

Refund of Duties and Taxes on Non-commercial Importations

Ottawa, February 6, 2013

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In Brief

This memorandum has been revised to reflect organizational changes resulting from the restructuring of the Canada Border Services Agency on April 1, 2010, and to provide general updates clarifying refund procedures.


This memorandum outlines and explains the procedures for the refund of duties, goods and services tax (GST), harmonized sales tax (HST), provincial sales tax (PST), provincial tobacco and alcohol taxes, and levies under the Special Import Measures Act (SIMA) for non-commercial importations brought into Canada by mail, courier, or hand carried by the traveller.

Legislation

The portions of the Customs Act and the Refund of Duties Regulations, and all other regulatory instruments referenced in this memorandum, may be accessed on the Department of Justice website, http://laws.justice.gc.ca/en/index.html. This memorandum should be read in conjunction with Paragraph 59(1)(a), and Sections 74 and 76 of the Customs Act and the Refund of Duties Regulations.

Guidelines and General Information

Definitions

1. For the purpose of this memorandum, the following definitions apply:

  • "Casual Goods are defined as goods imported into Canada other than commercial goods; as per Memorandum D17-1-3, Casual Goods.
  • "Casual Goods Accounting Document (Form B15) is used to account for goods acquired by travellers entering Canada from abroad.
  • "Casual Refund Centre (CRC) is the Canada Border Services Agency (CBSA) office responsible for the receipt, review and processing of the Form B2G casual refund requests.
  • "CBSA Informal Adjustment Request (Form B2G) is used to request an adjustment or refund of duty and tax paid for non-commercial goods imported by mail, courier, or carried by the traveller.
  • "CBSA Postal Import Form (Form E14) is used to assess duties and taxes and keep track of importations arriving through the mail.
  • "Non-commercial importations are defined as goods imported for individual use, and not intended for resale, commercial, industrial, occupational, institutional, or other like use. Also referred to as casual goods.
  • "Refund of duties and taxes on non-commercial importations means, the Casual Refund Centre (CRC) will authorize refunds of duties, GST/HST, provincial taxes, and/or SIMA levies where goods imported have been subsequently exported, or where determination, re-determination, re-classification, or re-appraisal of goods is being requested, or where duties and taxes have been overpaid or paid in error.

Casual Refund Program

2. Under prescribed conditions, the Customs Act allows for a person who paid duties on imported goods to apply for and for the Minister to issue a refund of all or part of the duties and taxes collected on non-commercial (casual) importations.

3. The Casual Refund Program manages the refund and adjustment processes for duties and taxes levied on non-commercial importations brought into Canada by mail, by courier or hand carried. The Program also allows for the reimbursement of duties and taxes paid, upon presentation of evidence that the imported casual goods have been returned to the sender.

4. It is the responsibility of border services officers to ensure that duties and taxes are collected on non-commercial goods imported into Canada at the time of importation and after personal exemptions are applied to the eligible traveller. Refer to Memorandum D17-1-3, Casual Importations and series D2 for import and accounting requirements.

5. Only under the prescribed conditions, which are contained within the Customs Act, will refunds be authorized. Casual Refund Centres (CRC) are the designated authority for all casual refund requests under the Customs Act.

6. The CRCs, which are located throughout Canada, have the delegated authority to refund, where applicable, duties, GST/HST, and provincial taxes, which were collected upon importation by either mail; courier; carried by the traveller. CRCs are listed on the back of the Form B2G, CBSA Informal Adjustment Request.

7. The following procedures are to assist non-commercial importers with their request to apply for a refund.

Requesting a Refund

8. An importer may request a refund of duties and taxes paid on non-commercial importations using Form B2G. Copies of this form are available at CBSA offices and on the Internet at B2G form.

Completion of CBSA Informal Adjustment Request Form B2G

9. Form B2G must be completed according to the instructions indicated on the reverse side of the form. The importer's signature must appear on either Form B2G or the accompanying correspondence requesting a refund of duties and taxes paid.

10.If a person other than the importer submits the request for refund, a letter signed by the importer authorizing the person to act as an agent, or a power of attorney, must be included with the claim. Additional details for authorized agents can be found in Memorandum D1-6-1, Authority to Act as Agent.

Supporting Documentation

11. The original accounting document showing the amount of duties and taxes paid at the time of importation must be attached to Form B2G. The accounting document required is dependant upon the method of importation: for travellers' importations attach Form B15; postal importations attach Form E14; and, courier importations attach the courier receipt that includes the B3 transaction number.

12. Documents supporting the request for a refund or adjustment must be attached to Form B2G. The following are examples of acceptable documentation:

  • (a)   where after duties and taxes were paid and the goods were returned to the exporter; a credit note from the exporter or vendor showing that the importer's account was credited for the return of the goods, and proof that the goods were exported, such as, a bill of lading, a receipt, or other documentation that describes the goods and gives the date of export;
  • (b)   where the value of the goods is incorrect; proof of the correct value, such as an invoice from the exporter or vendor;
  • (c)   where the goods were classified incorrectly or the wrong tariff treatment was applied; proof of the origin of goods such as invoices or purchase orders that provide a complete description and origin of the goods;
  • (d)   where the goods were damaged before release from the CBSA; proof from the exporter or shipper that the goods were damaged during shipping; or
  • (e)   when the quantity or quality of goods delivered was less than claimed; proof from the exporter or vendor such as a credit note or equivalent showing the quantity shipped or describing the goods that were actually sent.

13.  For more details concerning the conditions for refunds and documentation requirements, please refer to Appendix A.

Time limitations

14.  Requests for refunds must be made within one year of the date of original importation for traveller and postal redeterminations of tariff classification, value and/or origin.

15.  Requests for refunds under sections 74 or 76 of the Actmust be submitted within 4 years of the original date of importation except when claiming the benefits of preferential tariff treatment under the NAFTA or CCFTA. The free trade agreements and paragraph 74(1)(c.1) of the Act stipulate a one year time frame.

16.  To avoid delays with the review and processing, requests for refund or adjustment should be presented to the CRC corresponding to the importer's address, as indicated in the instructions provided on Form B2G. The CBSA is not responsible for delays occuring from misdirected requests which impact the time eligibility specified under the Customs Act. If an application is received in another office, the receiving office will forward the application to the appropriate refund centre.

Authorized Refunds

17.  The CRCs are authorized to refund, where applicable, all or part of the duties, taxes, GST/HST, SIMA levies as well as provincial sales tax and tobacco tax that were paid at the time of importation. For information on the application of HST please refer to memoranda D2-3-6, Non-commercial Provincial Tax Collection Program and D17‑1‑22, Accounting for the Harmonized Sales Tax, Provincial Sales Tax, Provincial Tobacco Tax, and Alcohol Markup/Fee on Casual Importations in the Courier and Commercial Streams.

18.  Provincial alcohol mark-ups/levies collected at time of importation will only be refunded when an error in calculation occurs which results in an overpayment of taxes or when duty-paid unconsumed alcohol is exported.

19.  Refunds may not be claimed in respect of penalties imposed on imported goods.

20.  The CRCs do not issue refunds of other government department (OGD) fees or penalties. Travellers and importers must contact the OGD to request refunds or adjustments of OGD fees and penalties.

21.  The handling costs assessed on postal shipments are only refundable when the goods should have been duty-free and tax-exempt at time of importation. Canada Post charges for Express Mail Service (EMS) items are non-refundable.

22.  Blanket refund requests for casual goods are not accepted. Please refer to Memorandum D6-2-3, Refund of Duties, for information regarding refunds of duties paid on commercial goods.

23.  All refunds will be made payable to the importer to whom the goods were originally consigned.

Interest

24.  For refunds granted under subparagraph 59(1)(a)(ii) of the Customs Act (re-determination of tariff classification, origin, or value of traveller or postal goods), interest will be computed at the prescribed rate for the period beginning on the first day after the duty was paid and ending on the day the refund is given.

25.  For refunds granted under any other section of the Customs Act, interest at the prescribed rate will be granted for the period beginning on the 91st day after the day the application for refund is received and ending on the day the refund is granted.

26.  Interest will not be paid on provincial sales taxes, tobacco taxes, and alcohol mark-ups/levies.

Voluntary Entries

27.  Where importers find that insufficient duties and taxes were assessed on their non-commercial postal, courier, or traveller declarations, an adjustment to the original assessment may be submitted on Form B2G.

28.  Form B2G may be used to show the proper duty and taxes that should have been collected and must be accompanied by the original CBSA accounting documentation, for example, Form E14, Form B15, or courier receipt. The claim should be submitted to the corresponding CRC as indicated on Form B2G.

Appeal Process

29.  If an importer's refund or adjustment request is denied by the CRC for re-determination of tariff classification, origin, under subparagraph 59(1)(a)(ii) of the Customs Act, the importer may appeal this decision. This can be done by letter addressed to the CBSA regional recourse division stated on the CRC decision notice. The appeal request must be presented within 90 days of the Section 59 decision notice and include a copy of the decision along with information and documents supporting the request. Please refer to Appendix B of this memorandum and D11-6-7, Importers' Dispute Resolution Process for Origin, Tariff Classification, and Value for Duty of Imported Goods, for further information regarding appeal request.

30.  Where the importer's refund or adjustment request is rejected by the CRC for reasons other than the tariff classification, origin and value for duty, the importer may submit a new application along with appropriate supporting documentation to the originating CRC for review and re-processing under the original provisions of the Customs Act. For the conditions to appeal decisions made by the CRC, please refer to Appendix B.

Casual Refund Electronic Data Interchange Transaction System (CREDITS)

31.  The Casual Refund Electronic Data Interchange Transaction System (CREDITS) is an electronic process allowing brokers to represent a foreign direct sales company and electronically submit refund claims on behalf of the importer. CREDITS is used for high volume refund applications for which brokers have originally accounted for the payment of duties and taxes on a Form B3 Canada Customs Coding Form and which the goods were subsequently returned to the foreign direct sales company. CREDITS allows authorized brokers to electronically transmit certain key information to a CRC. The CRC will issue a refund for the importer in care of the customs broker. The refund will be deposited directly into the broker's account and the importer will receive their refund of duties and taxes directly from the foreign company.

32.  To participate in CREDITS the customs broker must have full power of attorney from the importer allowing them to act as the importer's agent, to account for the duty and taxes to the CBSA, to export the goods, to file the B2G refund claim for the returned goods, and to receive the refund. Power of attorney must be provided in the online or catalogue ordering/shipping instructions and must clearly explain to the importer that they are authorizing the customs broker to act on their behalf in all aspects of the import, accounting, export and refund process.

33.  CREDITS requirements are detailed in the CREDITS Participant's Requirement Document (PRD). A copy of the CREDITS PRD, is available online at www.cbsa.gc.ca.

34.  CREDITS allows the transmission of minimal data on the basis that original import and export records are maintained by the broker. The CBSA will conduct verification checks on the broker by asking for the original import and export documentation to be presented within an acceptable period of time following the request. An audit may be performed by the CBSA on the applicant's books.

35.  Brokers wishing to participate in the CREDITS program must complete and submit a Form E613, Agreement to Electronically Process Casual Refund Claims which is available online at E613 form.

Forms E613 should be mailed to:

Canada Border Services Agency
Trade Programs Directorate
Assessment Unit
150 Isabella Street, 10th floor
Ottawa ON  K1A 0L8

36.  Upon receipt, the CBSA will review the application for completeness and conduct a workload analysis. Once the application is approved, the CBSA will make arrangements with the applicant for system testing. After the testing is complete the CBSA will issue a letter of approval authorizing the applicant to begin filing the CREDITS casual refund claims. Claims may then be filed electronically for goods returned after CBSA authorization was given.

37.  By participating in CREDITS the broker agrees to the terms outlined in the Participants Requirement Document and listed in section 2 of the Agreement to Electronically Process Casual Refund Claims form. The CBSA reserves the right to terminate this agreement if the conditions of the agreement are not met.


Appendix A

Casual Refund Centre Refund Guidelines

Type of Refund Legislation Conditions Requirements

Damaged, Deteriorated Goods

Customs Act
74(1)(a)

  • goods remain in Canada;
  • value is reduced by appraisal or credit;
  • adjustment request must be presented within 4 years.
  • a damage report or customs report on damaged goods;
  • a credit note or copy from the exporter of any document relating to a refund or credit given by the exporter (i.e., Visa, MC);
  • proof of loss in value of the goods as a result of the damage, deterioration, or destruction of the goods;
  • as a result of damage, a written statement by a carrier or an operator of a warehouse to certify that the goods suffered damage, deterioration, or destruction prior to release by the CBSA.

Shortage of Goods (Duty Paid on Full Quantity)

Customs Act 74(1)(b)

  • goods do not arrive in Canada;
  • quantity released is less than quantity on which duty and taxes were paid;
  • adjustment request must be presented within 4 years.
  • a credit note from the exporter for goods which were not subsequently shipped;
  • a written statement from the carrier or operator of a warehouse verifying the deficiency in quantity of the goods;
  • any supporting documents containing sufficient details to clearly determine the value for duty of the short goods.

Inferior Quality

Customs Act 74(1)(c)

  • goods remain in Canada;
  • goods are inferior in quality than those ordered;
  • adjustment request must be presented within 4 years.
  • a written statement from the exporter which clearly indicates the amount of refund or credit given due to the inferiority of the product.

NAFTA/CCFTA

Customs Act 74(1)(c.1)

74(1.1)

74(4)(a)

59(1)(a)(ii)

  • no duties apply as the goods are from a NAFTA country or from Chile and a re-determination of tariff treatment is requested;
  • no claim for preferential treatment has been previously made;
  • adjustment request must be presented within 1 year.
  • invoice or statement from the vendor indicating goods are of U.S., Mexican, or Chilean origin;
  • Exporter's Certificate of Origin, or other acceptable information indicating the goods are not manufactured outside the U.S., Mexico, Chile, or Canada.

CIFTA

Customs Act 74(1)(c.11)

74(1.1)

74(4)(a)

59(1)(a)(ii)

  • no duties apply as the goods qualify for tariff treatment under the Canada-Israel Free Trade Agreement;
  • adjustment request must be presented within 4 years.
  • an invoice or a statement by the vendor indicating that the goods originate in that country;
  • a certificate of origin from the exporter.

Clerical Error

Customs Act 74(1)(d)

  • calculation errors;
  • clerical errors on accounting documents/invoices;
  • exchange rate in error;
  • adjustment request must be presented within 4 years.
  • originals of accounting documents, invoices, or letter explaining reason for errors.

Duties Overpaid or Paid in Error due to Determination

Customs Act

74(1)(e)

74(1.1)

74(4)(b)

59(1)(a)(ii)

  • duties paid or overpaid as a result of an error in the determination under subsection 58(2) of origin (other than in (c.1) or (c.11)), tariff classification or value for duty;
  • applies to self declared entries (courier/B3 entries);
  • adjustment request must be presented within 4 years.
  • invoice/documents indicating information such as a proper description of the goods, quantity, country of origin, date of sale, and/or descriptive or illustrative literature;
  • a certificate of origin from the exporter; or,
  • written evidence of value or detailed goods description such as commercial invoices, credit notes, agreement of sale, purchase order confirmation or other supporting documentation.

Overpayment of Duties/Duties Paid in Error

Customs Act 74(1)(g)

74(1.1)

74(4)(b)

59(1)(a)(ii)

  • duties and taxes paid in error;
  • duty rate changes but no change in tariff classification, value, or origin;
  • duplicate payment;
  • adjustment request must be presented within 4 years.
  • copies of accounting documents, invoices, or letter explaining reason for overpayment;
  • documentation indicating the incorrect duty rate was used for calculation of duty;
  • proof of duplicate payment by producing copies of customs accounting documents showing duties and taxes were paid twice.

Goods Returned to Sender/ Exported

Customs Act 76(1)

  • goods must be exported from Canada;
  • goods are not according to order;
  • goods returned to sender for other reasons;
  • Adjustment request must be presented within 4 years.
  • a credit note or any supporting documents to indicate that credit from the exporter or vendor has been given to the importer;
  • a written statement by the exporter of the goods confirming that the goods have been returned;
  • a completed Form E15, Proof of Export or Destruction.

Tariff Classification, Value for Duty, and Origin

Customs Act 59(1)(a)(ii)

  • changes to tariff classification, value, or origin such as tourist exemptions, goods to follow (9804.20), settlers' effects/returning residents, wrong tariff classification assessed;
  • Adjustment request must be presented within 1 year for postal and traveller claims as stipulated in the 1998 Ministerial Agreement.

 

  • invoice/documents indicating information such as a proper description of the goods, quantity, country of origin, date of sale; and/or descriptive or illustrative literature;
  • an original Form E24, Personal Exemption CBSA Declaration, used to document goods to follow;
  • an original Form Y38, Identification of Article for Temporary Exportation,used to identify Canadian goods being taken out of the country by a traveller and which will be returned;
  • written evidence of value such as commercial invoices, credit notes, agreement of sale, purchase order confirmation.

Appendix B

Conditions to Appeal Section 59 Decisions Rendered by The Casual Refund Centres

Type of Refund Legislation Conditions Requirements

Appeals on Tariff Classification, Value for Duty, and Origin

Customs Act 60.

  • must be presented within 90 days of the Section 59 decision rendered by the CRC;
  • appeals are to be presented to the regional recourse divison stated in the CRC decision notice.
  • Previously submitted documents including the B2G, copy of the CRC decision as well as any further documents, and information that substantiate the request.

References

Issuing office Assessment Unit
Assessment and Licensing Division
Trade Programs Directorate
Legislative references Customs Act, sections 58, 59, 60, 74 and 76
Headquarters file 7965-4
Other references D1-6-1, D2-3-6, D6-2-3, D11-6-7, D17-1-3, D17-1-22
Superseded memoranda D D6-2-6, August 4, 2000