M4.8 Calculating Payable Tax

Question 1

What are NRIs?

Answer 1

non-resident importers are suppliers outside of Canada who choose to be responsible for any applicable duties and taxes on goods they sell to Canadian purchasers;

Question 2

non-resident importers must register for the GST/HST in order to claim input tax credits;

Answer 2

True

Question 3

What is the flow through method?

Answer 3

a non-resident, non-registrant may use the flow through method to recover tax paid on imported goods;

Question 4

a non-resident selling casual goods to a Canadian resident must collect HST/PST.

Answer 4

True

Question 5

What goods does Excise tax currently applies to?

Answer 5

Excise tax currently applies to:

certain petroleum products;
fuel-inefficient vehicles; and
air conditioners designed for automobiles.

Question 6

When certain goods are manufactured in Canada, excise tax is payable at the time the goods are delivered to the purchaser.

Answer 6

True

Question 7

When goods subject to excise tax are imported, excise tax is payable by the importer at the time the goods are imported.

Answer 7

True

Question 8

Manufacturers of goods subject to excise tax must have an excise tax licence (“E” licence) unless they are a small manufacturer. A small manufacturer is one whose total annual sales do not exceed $50,000.00.

Answer 8

True

Question 9

A wholesaler’s licence (“W” licence) allows the purchase of goods (subject to excise tax) for resale without paying excise tax at the time of purchase or importation. In this case, excise tax is collected and remitted when the goods are sold.

Answer 9

True

Question 10

What is the legislative authority for GSTHST under?

Answer 10

legislative authority is under the Excise Tax Act;

Question 11

GSTHST are not applied together; that is, only the GST or the HST is collected;

Answer 11

True

Question 12

the HST is applied at a rate of 15% in what provinces

Answer 12

the HST is applied at a rate of 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island;

Question 13

Provincial taxes includes?

Answer 13

include provincial sales tax (PST), provincial tobacco tax, alcohol markups or fees, and, in Québec only, specific alcohol tax;

Question 14

Provincial taxes is applied when goods are ?

Answer 14

are payable at the time of importation on casual goods that are destined for individual use and not imported into Canada for sale or for any commercial, industrial, occupational, institutional or other like use;

Question 15

PST, provincial tobacco tax and alcohol markups or fees are assessed and collected on casual goods when an agreement exists between the province and the CBSA to collect the tax on behalf of the province;

Answer 15

True

Question 16

What does a W license allow importers to do?

Answer 16

a “W” licence allows an importer of goods subject to excise tax to pay the tax when the goods are sold, rather than at the time of importation.

Question 17

What does D17-1-21 provide more information about?

Answer 17

Note: Non-resident importers must maintain certain records; additional information on the maintenance of records is found in D17-1-21.

Question 18

What is the Excise Tax Act?

Answer 18

The Excise Tax Act is the authority for the imposition of excise tax on specified goods at various rates.

The GST, the HST/PST and excise tax are charged in addition to all other duties and taxes.

Question 19

Where is there a listing for prescribed goods imported in prescribed circumstances and under prescribed terms and conditions ?

Answer 19

Prescribed goods imported in prescribed circumstances and under prescribed terms and conditions are listed in the Non-Taxable Imported Goods (GST/HST) Regulations .

Question 20

List of goods that exempt form taxes are found in.

Answer 20

Schedule V of the Excise Tx Act

Question 21

List for zero rated goods are found in

Answer 21

Schedule VI of the excise tax act

Question 22

Non-Taxable supplies are goods on which the GST is not payable.

Answer 22

These are described in Schedule VII to the Excise Tax Act.

Question 23

Tax rate in Alberta?

Answer 23

GST. 6%
PST n/a

Question 24

Taxe rate in BC

Answer 24

GST - 5%
PST 7%

Question 25

Tax rates in Saskatchewan

Answer 25

GST 5
PST 6

Question 26

Tax rates in Quebec

Answer 26

PST 9.97
GST 5

Question 27

Exempt supplies are those on which there is no GST paid by the purchaser, and the registrant does not collect or charge tax.

Answer 27

True

Question 28

The GST is governed by the

Answer 28

Excise Tax Act

Question 29

The HST includes both the federal GST and the provincial sales tax.

Answer 29

True

Question 30

In order to claim an input tax credit, a non-resident importer must be registered for the GST.

Answer 30

True

Question 31

The “flow through method of tax recovery” enables non-registered non-resident importers to recover GST that they have paid on imported goods.

Answer 31

True

Question 32

The HST and the PST is collected on casual goods imported by a non-resident importer.

Answer 32

True

Question 33

Calculate the GST owing on the following goods. Commodity: Detonating cords
Value: $225.26 USD each
Quantity: 12,350
Weight: 33,000 kg
Exchange rate: 1.351
Country of origin: Bolivia, no proof of origin is available

Answer 33

mentioned under Heading 36.03.
3603.20.00.00
Bolivia qualifies for both the MFN and the GPT rate of duty and since we do not have a Form A Certificate we must use the MFN rate of duty of 6.5%.
$225.26 USD Unit price X 12,350 Quantity = $2,781,961.00 USD

$2,781,961.00 USD X 1.351 Exchange rate = $3,758,429.31 VFD
$3,758,429.31 VFD X 6.5% Duty rate = $244,297.91 Duty
$3,758,429.31 VFD + $244,297.91 Duty = $4,002,727.22 VFT
$4,002,727.22 VFT X 5% GST rate = $200,136.36 GST

Question 34

1806.20 A change to subheading 1806.20 from any other heading.

In order for goods of subheading 1806.20 to be considered as originating, they can include foreign parts and materials from heading 1806.31.

Answer 34

False