M6 - SIMA Duty Deferral/Cdn Goods RTN/customs bonded Watehouse And cSA Flashcards
When goods are imported under the licence number, the company retains responsibility for the goods until:
(a) the goods are transferred to another Duties Relief Program participant. When goods are sold to or transferred to another program participant, the liability for the payment of any duty owing transfers to the participant who receives the goods. Transferring the duty liability is documented using either Form K32A, Certificate of Importation, Sale or Transfer or other commercial documentation;
(b) the goods are exported from Canada;
(c) the amount relieved is paid when the goods are no longer for export;
(d) the goods are reclassified to an eligible duty-free status;
(e) the goods are transferred to another relief program; or
(f) the goods qualify for destruction under the Refund of Duties on Obsolete or Surplus Goods Regulations.
The goods must be exported from Canada within four years of the date that they are released. In the case of imported spirits used to manufacture distilled spirits, the goods must be exported within five years.
The Exporter of Processing Services (EOPS) Program
The EOPS program relieves GST at the time of importation if the goods being imported are done so for the purposes of receiving a service, belong to a non-resident and will be processed, distributed or stored, and subsequently exported. The goods must be exported within four years.
To qualify for this program, the importer:
must be a GST/HST registered company;
cannot own a property interest in the goods (meaning they cannot have a percentage of ownership);
cannot be closely related to the non-resident on whose behalf the work is being done; and
must ensure that the goods are never consumed or used in Canada.
If you believe that your client or employer qualifies for EOPS, then you or they may wish to contact the Canada Revenue Agency to apply for GST/HST relief on these goods.
All authorizations for relief from the payment of the GST/HST under the EOPS Program are valid for three years.
The Export Distribution Centre (EDCP) Program
The EDCP allows eligible export-oriented businesses that do not manufacture or produce goods and that add limited value to goods in the course of their processing or distribution activities, to import without having to pay the GST/HST.
This is available on most inventory, property to be added to other goods in the course of processing, and customers’ goods for which processing services are provided.
Examples would include:
displaying;
storing;
disassembling or reassembling; and
simple packaging.
Duty Deferral Programs
the three programs under the Duty Deferral Program are the Duties Relief Program, the Customs Bonded Warehouse Program, and the Drawback program;
the Duties Relief program relieves the payment of duties on imported goods that will eventually be exported either in the same condition or after being used, consumed, or expended in the processing of other goods;
in most cases, under the Duties Relief Program, there is no payment of customs duties, anti-dumping and countervailing duties, or excise taxes;
to request participation in the program, one must complete a K90 application;
the CBSA assigns a unique certificate number for those whose application is approved;
when importing goods, the certificate number is placed in the special authority field of the accounting document;
in general, goods must be exported from Canada within four years of the date of release of the goods;
the GST is not relieved but relief may be available under two different CRA Programs, the EOPS and EDCP programs;
customs bonded warehouses are licensed by the CBSA and operated by the private sector;
goods in a bonded warehouse are considered to be imported into Canada but have not been released;
bonded warehouse facilities provide for the complete deferral of customs duties, anti-dumping and countervailing duties, excise duties and taxes, including the GST;
the Customs Bonded Warehouse Program provides for the importation of goods:
for display, inspection, and exhibition that have been reported and documented to enter the facility,
other than prohibited or restricted goods;
both residents and non-residents may operate a bonded warehouse;
to apply to become an operator, one must complete Form E401, Application for Licence to Operate a customs bonded warehouse;
in general, goods must be removed from the bonded warehouse within four years of the date they were entered into the warehouse;
all permits or certificates are required to be presented when the goods enter the warehouse;
the Drawback Program is an incentive for domestic manufacturers who produce goods for export;
except in certain cases under the CUSMA, drawback is a refund of customs duties, excise duties, excise tax, and anti-dumping and countervailing duties paid on imported goods that have been:
further processed and subsequently exported;
displayed or demonstrated in Canada and subsequently exported;
used for the development or production in Canada of goods for subsequent export; or
exported without having been used in Canada for any purpose other than for any of the above.
a drawback may be claimed on imported goods that are surplus or obsolete and have been disposed of in Canada;
a drawback does not allow for a refund of the GST;
a drawback is allowed under Section 113 of the Customs Tariff;
K32 is the form used to claim a drawback;
a drawback claim may be filed by the importer, exporter, processor, owner, or producer/manufacturer of goods that were exported from Canada;
where more than one person is eligible to file a claim, a waiver must be provided;
in most cases, drawback claims must be filed within four years of the date of release;
under the CUSMA, the “lesser of two duties” drawback concept restricts the amount of drawback to the lesser of the relief normally allowed and duties paid or owed on the exported product when it enters the other CUSMA country.
Duty Deferral Programs
the three programs under the Duty Deferral Program are the Duties Relief Program, the Customs Bonded Warehouse Program, and the Drawback program;
the Duties Relief program relieves the payment of duties on imported goods that will eventually be exported either in the same condition or after being used, consumed, or expended in the processing of other goods;
in most cases, under the Duties Relief Program, there is no payment of customs duties, anti-dumping and countervailing duties, or excise taxes;
to request participation in the program, one must complete a K90 application;
the CBSA assigns a unique certificate number for those whose application is approved;
when importing goods, the certificate number is placed in the special authority field of the accounting document;
in general, goods must be exported from Canada within four years of the date of release of the goods;
the GST is not relieved but relief may be available under two different CRA Programs, the EOPS and EDCP programs;
customs bonded warehouses are licensed by the CBSA and operated by the private sector;
goods in a bonded warehouse are considered to be imported into Canada but have not been released;
bonded warehouse facilities provide for the complete deferral of customs duties, anti-dumping and countervailing duties, excise duties and taxes, including the GST;
the Customs Bonded Warehouse Program provides for the importation of goods:
for display, inspection, and exhibition that have been reported and documented to enter the facility,
other than prohibited or restricted goods;
both residents and non-residents may operate a bonded warehouse;
to apply to become an operator, one must complete Form E401, Application for Licence to Operate a customs bonded warehouse;
in general, goods must be removed from the bonded warehouse within four years of the date they were entered into the warehouse;
all permits or certificates are required to be presented when the goods enter the warehouse;
the Drawback Program is an incentive for domestic manufacturers who produce goods for export;
except in certain cases under the CUSMA, drawback is a refund of customs duties, excise duties, excise tax, and anti-dumping and countervailing duties paid on imported goods that have been:
further processed and subsequently exported;
displayed or demonstrated in Canada and subsequently exported;
used for the development or production in Canada of goods for subsequent export; or
exported without having been used in Canada for any purpose other than for any of the above.
a drawback may be claimed on imported goods that are surplus or obsolete and have been disposed of in Canada;
a drawback does not allow for a refund of the GST;
a drawback is allowed under Section 113 of the Customs Tariff;
K32 is the form used to claim a drawback;
a drawback claim may be filed by the importer, exporter, processor, owner, or producer/manufacturer of goods that were exported from Canada;
where more than one person is eligible to file a claim, a waiver must be provided;
in most cases, drawback claims must be filed within four years of the date of release;
under the CUSMA, the “lesser of two duties” drawback concept restricts the amount of drawback to the lesser of the relief normally allowed and duties paid or owed on the exported product when it enters the other CUSMA country.
CSA for Importers
a streamlined border entry process;
a streamlined accounting and payment system; or
both a streamlined border entry process and a streamlined accounting and payment system;
the application process to become a CSA importer is a two-step process;
the CSA entry process at the border authorizes the goods to be delivered, they are not “released”;
the date that imported goods are received by the CSA importer or consignee is considered to be the date of release;
the CBSA relies on the CSA importer’s accounting system to trigger the accounting process;
there are two accounting options for importers using the CSA;
the CSA importer summarizes and reports to the CBSA any CBSA debits and credits once a month on a RSF – CSA Revenue Summary;
payment of the RSF is made through a financial institution, and multiple payments may be made during the month to avoid incurring interest; and
CSA importers can be assessed penalties under AMPS.
