On October 11, 2018, the Canada Border Services Agency (CBSA) posted Customs Notice 18-16 (CN 18-16) to provide information on the United States (US) Surtax Remission Order, 2018-1272.
The new Remission Order is intended to minimize the negative effects of the surtaxes on Canadian companies and the economy by providing relief when certain conditions are met.
The remission order remits some surtaxes imposed by the US Orders on Steel (25%), Aluminum (10%) and other miscellaneous goods (10%) which came into effect on July 1, 2018.
Importers should note that the surtax amounts must still be accounted for as described in the US Surtax Orders on “Steel and Aluminum” and “Other Goods” in accordance with CN18-08, however if goods are eligible for relief under the Remission Order, the surtax may be remitted.
The Remission Order may be applied to imports subject to surtax under the following situations:
- Certain eligible goods as described in Schedule 1 and Schedule 2 of the remission order
- additional conditions apply as outlined below;
- Goods classified under tariff item No. 8903.10.00, 8903.91.00, 8903.92.00 or 8903.99.90 excluding those that have been exported from Canada and then subsequently re-imported into Canada; and
- Goods temporarily imported into Canada for the purposes of repair, alteration, or storage, including those classified under tariff item No. 8903.10.00, 8903.91.00, 8903.92.00 or 8903.99.90 that have been exported from Canada.
Application – for goods listed under Schedules 1 and 2 of the Order (Steel and Aluminum)
The remission is granted for goods described in Schedule 1 and Schedule 2 of the remission order under the following conditions:
- The good listed in the schedule was imported into Canada on or after July 1, 2018 and subject to surtaxes;
- No other claim for relief of the surtax has been granted under the Customs Tariff in respect of the good;
- The importer makes a claim for remission to the Minister of Public Safety and Emergency Preparedness within two years after the date of importation.
- The importer files, on request, the evidence or information that the CBSAS requires to determine eligibility for remission;
- The importer agrees that it is subject, at any time, including after the remission, to review by the CBSA, for the purpose of determining whether the information supplied by the importer under paragraph (c) or (d) is accurate and complete and whether the facts on which the CBSA relied or intends to rely to determine the eligibility for remission remain unchanged in all material respects; and
- At the time when the CBSA conducts the review referred to in paragraph (e), the CBSA must be able to conclude that the information supplied remains accurate and complete and facts remain unchanged in all material respects.
- Goods described in Schedule 2 must be imported into Canada no later than December 31, 2018.
In reference to condition “g” above, relief is available for products listed in Schedule 1 for an indefinite period of time, however for goods listed on Schedule 2, relief has been granted only until Dec 31, 2018.
Certain HS numbers will also appear on both schedules, however the product definitions may vary and will be identified separately on each schedule.
Definitions of the imported goods must match the definitions in the Schedule for the remission to apply. HS Classification numbers are provided for reference only.
Application of the Remission order for “Other Goods” must meet specific conditions
The Remission may be applied to goods correctly classified under tariff item numbers 8903.10.00, 8903.91.00, 8903.92.00 or 8903.99.90, (certain Yachts and other vessels for pleasure or sports; rowing boats and canoes) but excludes goods that have been exported from Canada and then subsequently re-imported into Canada.
To claim relief of surtax for these goods under the remission order the importer must have all relevant documents (e.g. copy of original Form B3-3, bill of lading, sales invoice, waybill, sales contract, etc.) demonstrating that:
- The good was imported into Canada on or after July 1, 2018 and subject to surtaxes;
- The good was both purchased under contract and sold under contract prior to May 31, 2018;
Remission for these goods is granted only if they meet the additional conditions outlined in Customs Notice 18-16.
Additional Information
- Claims for relief of surtax under the remission order have all relevant documents to prove that the goods being imported match the description of one of the goods described in Schedule 1 or 2 of the remission order. These forms may include a B3, purchase order, commercial invoice, CCI, bill of lading, way bill, etc.
- The remission is only applicable on goods imported into Canada on or after July 1, 2018 that were subject to surtaxes;
- The CBSA may re-determine or further re-determine the origin, tariff classification, and/or value for duty on its own initiative or in response to a self-adjustment. In so doing, as with customs duties and taxes, the CBSA may assess any undeclared amount of surtax, or deny remission of surtax that is not eligible.
- The imposition of a surtax is not subject to an appeal under the Customs Tariff or Customs Act.
- Accounting documents are normally reviewed by the CBSA to ensure that the correct amount of surtax was self-assessed by the importer. Determinations, re-determinations or further re-determinations made by the CBSA may be subject to appeal under the Customs Act.
- Goods temporarily imported into Canada for the purposes of repair, alteration, or storage are granted remission of surtaxes, however the remission for these goods is granted only if they meet the conditions outlined CN 18-16.
- Additional information on GST relief is also available in CN18-16
Detailed Instructions on Accounting for the relief of surtax using the Remission Order as well as Corrections, Re-Determinations, and Refunds are provided in Customs Notice 18-16.
For general information pertaining to surtax, refer to Memorandum D16-1-1, Information pertaining to the application, collection, and adjustment of a surtax.