Excise Duty Memoranda Series

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10.1.1 - Returns and Payments

July 2003
Revised May 2004

Revised paragraphs are indicated with a side bar in the left margin.

Overview

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 (CRA) tax services office for additional information.

[Proposed amendments]

This memorandum reflects proposed amendments to the Act announced by the Minister of Finance on
June 24, 2003. [Where information reflects proposed amendments, the information is enclosed in square brackets.] Any commentary in this memorandum should not be taken as a statement by the CRA that such amendments will in fact be enacted in their current form.

Table of Contents

• Persons required to file
• Electronic filing
• Filing separate returns
• Prescribed returns
• What to include on a return
• Fiscal months
• When to file
• Extension of time to file
• Demand for a return
• Making payments
• Debts and the collections process
• Interest
• Offences and penalties

Persons required to file

Licensees
s 160

1. [Every person who is licensed under the Act is required to file an excise duty return with the CRA for each fiscal month.]

Filing by other persons
s 161

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

Where to file

3. Excise duty returns may be sent by regular mail to the Summerside Tax Centre at 275 Pope Road, Summerside PE, C1N 6E7, or hand-delivered, mailed, or sent by courier to any CRA tax services office.

Electronic filing

Meaning of
“electronic filing”
ss 166(1)

4. “Electronic filing” refers to the filing of an excise duty return using electronic media in a manner specified in writing by the CRA.

Paper returns currently required

5. Currently, the CRA has not approved any means to file excise duty returns electronically. Accordingly, all persons who are required to file an excise duty return must submit a paper return to the CRA.

6. If, at a future date, the CRA approves a means of electronic filing, specific information relating to the procedures to be followed will be available in Excise Duty Memorandum 10.4.1, Electronic Filing.

Filing separate returns

Application
ss 164(1)

7. 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.

Requirement for authorization
ss 164(2)

8. A person who wishes to apply to file separate returns and refund applications must 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.

Revocation of authorization
ss 164(3)

10. The CRA may revoke the authority to file separate returns 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.

Notice of revocation
ss 164(4)

11. 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

Prescribed form
para 160(a)
and 161(a)

12. Excise duty returns must be filed with the CRA in a prescribed form and manner. The CRA has developed a series of prescribed returns that are tailored to meet the specific requirements of each licensee type.

Separate licences

13. Where a licensee holds more that one type of licence under the Act, a separate return must be filed for each licence held.

Returns for licensees

14. The following excise duty returns must be filed by each licensee type:

• B261, Excise Duty Return - Duty Free Shop
• B262, Excise Duty Return - Excise Warehouse Licensee
• B263, Excise Duty Return - Licensed User
• B264, Excise Duty Return - Special Excise Warehouse Licensee
• B265, Excise Duty Return - Wine Licensee
• B266, Excise Duty Return - Spirits Licensee
• B267, Excise Duty Return - Tobacco Licensee
• B271, Excise Duty Return - Tobacco Dealer

Return for non-licensed persons
para 161(a)

15. 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. This return will be available from any CRA tax services office or the CRA Web site, at http://www.cra-arc.gc.ca/tax/technical/act2001-e.html

Personalized returns

16. 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.

Non-personalized returns

17. Licensees who do not receive a personalized return may obtain a
non-personalized return for their specific licence type from any CRA tax services office or on the CRA Web site at the address indicated in paragraph 15.

What to include on a return

Monthly activities

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

Filing returns
para 160(b) and 161(b)

19. Every person (i.e., licensee or non-licensee) who is required to file an excise duty return must calculate in the return the total amount of excise duty payable by the person, if any, for a fiscal month.

Instructions for licensees

20. Detailed instructions for licensees completing excise duty returns are available in the following Excise Duty Memoranda:

• 10.1.2, Completing an Excise Duty Return – Duty Free Shop
• 10.1.3, Completing an Excise Duty Return – Excise Warehouse Licensee
• 10.1.4, Completing an Excise Duty Return – Licensed User
• 10.1.5, Completing an Excise Duty Return – Special Excise Warehouse Licensee
• 10.1.6, Completing an Excise Duty Return – Wine Licensee
• 10.1.7, Completing an Excise Duty Return – Spirits Licensee
• 10.1.8, Completing an Excise Duty Return - Tobacco Licensee
• 10.1.9, Completing an Excise Duty Return – Tobacco Dealer

Instructions for
non-licensees

21. Instructions for non-licensed persons completing excise duty returns will be available in Excise Duty Memorandum 10.1.10, Completing an Excise Duty Return - Non-Licensee.

Deductions or refunds
s 162

22. The Act 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 the person files an excise duty return, and must be claimed in that return or another return, or in a separate application filed with that return. In this situation, 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.

Refund applications

23. 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.

24. Additional information relating to refund procedures are provided in Excise
Duty Memorandum 10.3.1, Refunds.

Small amounts payable or owing
ss 165(1) and (2)

25. If the total amount payable by a person to the CRA is less than two dollars, the amount owing by the person is deemed to be nil and the person is not required to pay it. If the total of the amount payable by the CRA to a person is less than two dollars, the CRA is not required to pay the person. The CRA may, however, deduct this amount from any amount payable by the person.

Nil returns

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

Execution of returns
s 167

27. 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.

Power of attorney

28. 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.

Fiscal months

Determining fiscal months
ss 159(1)

30. Where a licensee has determined a fiscal month for GST/HST purposes, the same fiscal month applies for purposes of excise duty. Where such a fiscal month has not yet been determined, a person may choose a fiscal month using established GST/HST rules, or use a calendar month.

Notification of fiscal months
ss 159(2)

31. 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. Form B268 will be provided to the licensee at the time a licence is issued under the Act, and must be signed by an authorized individual. If required, the form may be obtained from any CRA tax services office or on the CRA Web site at the address indicated in paragraph 15. Once completed, form B268 must be returned to any CRA tax services office or sent directly to the Summerside Tax Centre.

Changing fiscal months

32. A licensee must use the fiscal months indicated to the CRA in form B268. If a licensee wishes to change fiscal months, the Manager of the licensee's designated Regional Excise Duty Office must be notified in writing, including the following information:

• 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.

Licensees with separate filing branches
s 164

33. Licensees authorized under the Act to file separate returns and refund applications for their branches or divisions will be required to use the same fiscal months for their branches or divisions as those of the parent company.

When to file

Filing by licensees and other persons
para 160(a) and
s 161

34. All licensees and non-licensed persons must file their excise duty returns no later than the last day of the first month following the fiscal month to which the returns relate. For example, an excise duty return for the fiscal month ending September 30, 2004, will be due on October 31, 2004.

Extension of time to file

Authority
ss 168(1)

35. Upon request, the CRA may extend the time limitations for filing an excise duty return.

Effect of extension
ss 168(2)

37. 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; and
• interest is payable as if the time had not been extended.

Demand for a return

Demand to file
s 169

38. The CRA may serve any person with a demand to file an excise duty return for any designated period within the time stipulated in the demand. Such a demand may be served personally, or by registered or certified mail.

Failure to comply
s 251

39. A person who fails to comply with a demand to file an excise duty return will be liable to a penalty of the greater of $250 and 5% of the outstanding excise duty for the period specified in the demand as of the day the return was due. This penalty applies to each return that has not been filed.

Making payments

Receiver General
para 160(c) and 161(c)

40. 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.

Payments by due date
para 161(c) and
ss 300(2)

41. The CRA or one of its agents (i.e., an authorized financial institution) must receive a payment of excise duty that is owed to the Crown by the due date of the excise duty return. A payment of excise duty is considered to be received by the CRA only when it is in the hands of the CRA or one of its agents.

Date received
ss 300(1) and (2)

42. The postmark date, in the case of an excise duty return that is mailed, or the “date received” stamp of a CRA office, in the case of a return that is hand-delivered or sent by courier, 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 a CRA tax services office or 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. However, this procedure applies only to the filing of excise duty returns. Any payments owed to the Crown must be received by the Receiver General on or before the due date of the return.

Holidays or weekends
Interpretation Act
s 26

43. If the due date of an excise duty return falls on a weekend or public holiday, the due date will fall on the first business day following the weekend or holiday. For example, if a return is due on Good Friday, the payment owing must be received by the Receiver General no later than the following Tuesday, as Easter Monday is also a holiday.

Debts and the collections process

Debts
ss 284(1)

53. 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.

Reminder notice

54. 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.

55. Additional information on the collections process will be available in Excise Duty Memorandum 12.2.1, Collection Activities.

Interest

Amounts not paid when required
s 170

56. Any amounts owing under the Act that are not paid as and when required are subject to interest under the Act.

57. Additional information on the charging of interest on unpaid amounts and related topics will be available in Excise Duty Memorandum 10.2.1, Interest and Fairness Provisions.

Offences and penalties

Enforcement
Part 6

58. Additional information on offences and penalties will be provided in
Excise Duty Memoranda 3.9.1, Spirit-Related Offences and Penalties, 4.9.1,
Wine-Related Offences and Penalties, 5.9.1, Denatured and Specially Denatured Alcohol-Related Offences and Penalties, 7.9.1, Tobacco-Related Offences and Penalties, 8.9.1, Warehousing-Related Offences and Penalties, and 9.9.1, Books and
Records-Related Penalties.

All of the memoranda in the Excise Duty Memoranda Series are available on the CRA Web site at http://www.cra-arc.gc.ca/tax/technical/act2001-e.html.