CBSA Message (TCC18-128) - Cannabis Customs Excise Duty Procedures

Submitted by admin on Wed, 11/07/2018 - 02:32

Clients Affected: All importers and brokers who use EDI to transmit their trade data.

Further to Customs Notice CN18-19 pertaining to Cannabis Customs Excise Duty Procedures please note the following for completion of the CADEX formatted records:

3. The table below is a list of the province/territory HS Administrative Code to be entered in Field 27 on Form B3-3, Canada Customs Coding Form.

4. The following example illustrates how the customs duty, federal excise duty and provincial excise duty is to be calculated on Form B3-3, Canada Customs Coding Form.

Example 1

Calculation of the federal and provincial cannabis excise tax for goods imported in British Columbia using the ad valorem method rates.

Example 1: Calculation of the federal and provincial cannabis excise tax for goods imported in British Columbia using the ad valorem method rates

Line 1

Shows the amount of federal excise duty. The amount is calculated at 2.5% of the dutiable amount (federal ad valorem rate) rather than $0.075/gram (federal flat rate), as this is the higher of the two rates.

  • The Excise Tax Rate (Field 34) is entered as 2.5.
  • The amount of federal excise duty is 2.5% of the dutiable amount (VFD+ Customs Duty= $100,000) and is entered as $2500.00 in the Excise Tax field (Field 40).
  • The Value for Tax (Field 41) is the VFD + Customs Duty + Excise Tax Duty and is entered as $102,500.00.

Line 2

Shows the amount of provincial excise duty for British Columbia. The amount is calculated at 7.5% of the dutiable amount (BC provincial ad valorem rate) rather than $0.225/gram (BC provincial flat rate), as this is the higher of the two rates.

  • The importer is required to manually calculate the provincial excise duty rate and the amount. To indicate this, code 44 is entered in the Excise Tax Rate (Field 34)
  • The amount of provincial excise duty is 7.5% of the dutiable amount (VFD + Customs Duty + Excise Tax (federal) from Line 1 = $102,500) and is entered as $7,687.50 in the Excise Tax field (Field 40).
  • The Value for Tax (Field 41) is the VFD + Customs Duty + Excise Tax and is entered as $7687.50.

CADEX FORMAT

Line 1

  • The KI50 record would contain 2.5 in the Excise Tax Rate field
  • The KI50 record would contain 2500.00 in the Excise Tax Amount field
  • The KI50 record would contain 102,500.00 in the Value For Tax field

Line 2

  • The KI30 record would contain 0000999957 in the Classification Number field
  • The KI50 record would contain 44.0 in the Excise Tax Rate field
  • The KI50 record would contain 7687.50 in the Excise Tax Amount field
  • The KI50 record would contain 7687.50 in the Value For Tax field

Example 2

Calculation of the federal cannabis excise duty for goods imported in Manitoba using the flat rate method. Note: Additional provincial excise duty is not applicable in the province of Manitoba, and therefore a second line is not required.

Example 2: Calculation of the federal cannabis excise tax for goods imported in Manitoba using the flat rate method

Line 1

Shows the amount of federal excise duty. The amount is calculated at $0.075/gram (federal flat rate) rather than 2.5% of the dutiable amount (federal ad valorem rate), as this is the higher of the two rates.

  • The Excise Tax Rate (Field 34) is entered as 75.
  • The amount of federal excise duty is $0.075 per gram and is entered as $750.00 in the Excise Tax field (Field 40).
  • The Value for Tax (Field 41) is the VFD + Customs Duty + Excise Tax and is entered as $20,750.00.

CADEX FORMAT

  • The KI50 record would contain 75.00 in the Excise Tax Rate field
  • The KI50 record would contain 750.00 in the Excise Tax Amount field
  • The KI50 record would contain 20,750.00 in the Value For Tax field