Customs Notice 24-43: Goods and Services Tax/Harmonized Sales Tax (GST/HST) break
Ottawa,
1. This notice provides information on legislative changes being made to the Excise Tax Act, regarding the Goods and Services Tax/Harmonized Sales Tax (GST/HST) that will be in effect from , to .
2. The GST/HST tax break is being introduced by the Government of Canada to provide for a two-month tax break on holiday essentials such as groceries, restaurant meals, drinks, snacks, children’s clothing, and gifts. More information regarding this announcement can be found in the Department of Finance Canada’s news release.
3. The Canada Border Services Agency (CBSA) is responsible for administering the exemption on imports allowing for the upfront relief of GST/HST and will accept adjustment requests for eligible goods that did not claim this at the time of importation.
Legislation
4. Under the Customs Act, goods must be accounted for in the prescribed manner in accordance with Section 32 of The Act. In accordance with Section 74 and 76 of the Customs Act a person who paid duties on any imported goods may apply for a refund of all or part of those duties paid when they are overpaid in error.
5. The goods subject to GST/HST relief are being added to Schedule VII of the Excise Tax Act.
Application
6. From to , the GST/HST will be fully relieved on qualifying goods imported into Canada via the postal, Courier Low Value Shipment (CLVS) and commercial streams. The GST/HST break includes certain qualifying goods, such as:
- Food
- Beverages
- Children's clothing and footwear
- Children's diapers
- Children's car seats
- Certain children’s toys
- Jigsaw puzzles
- Video game consoles, controllers, and physical video games
- Physical books
- Printed newspapers
- Christmas and similar decorative trees
7. Visit Canada Revenue Agency’s (CRA) GST/HST break for more details, examples, and restrictions.
8. Tax relief will be applied to goods released between and , regardless of the purchase date, as per the eligibility period defined in Part XI of s.6(1) of the Excise Tax Act.
9. Goods that are purchased during the relief period, but released after will not qualify.
Courier Low Value Shipment and Commercial Streams
10. Consistent with Canada’s established customs regime, Trade Chain Partners (TCPs) will be responsible for accurately declaring eligible goods imported via the Courier Low Value Shipment (CLVS) and commercial streams on a Commercial Accounting Declaration (CAD).
11. The CBSA will deploy a unique, temporary exemption code in the CBSA Assessment and Revenue Management (CARM) system that can be used by importers to apply the GST/HST holiday to eligible goods. New importations of eligible goods between and may benefit from this GST/HST relief using the new exemption code “24-25-GSTTPS” in the “Special Auth. OIC” field of the Commercial Accounting Declaration (CAD) in CARM. Instructions on how to complete and submit a CAD can be found in Memorandum D17 -1-10, Coding of Customs Accounting Documents.
12. TCPs who claim relief under the Courier Import Remission Order (CIRO) or the benefit of non-taxable status under Schedule VII to the Excise Tax Act for eligible imported goods transported by courier may also benefit from this GST/HST tax break.
13. In order to claim GST/HST relief and relief under the CIRO (including the CUSMA de minimis) or the benefit of non-taxable status under Schedule VII to the Excise Tax Act, Category C claimants (CLVS CIRO shipments with a value for duty of CAD $40.01 - $150.00 imported from the United States or Mexico) may use code “85-2955-3X” for eligible goods that may benefit from both the CIRO and the GST/HST rebate.
14. The goods that qualify for the GST/HST tax break are not eligible for classification under the generic tariff classifications in heading 98.25 (9825.10.00, 9825.20.00, and 9825.30.00) of the Customs Tariff. To qualify for the GST/HST tax break, these goods must be classified in their fulsome tariff classifications in chapters 1-97 of the Customs Tariff.
15. Eligible goods that have already been released prior to December 14, 2024, and that are currently in a Customs Bonded Warehouse will not be able to apply the exemption code in the “Special Auth. OIC” field of the CAD. The GST/HST tax break will only apply to new importations on or after December 14, 2024. TCPs may apply for a GST rebate with the Canada Revenue Agency (CRA) for GST applied on goods removed from a Customs Bonded Warehouse on a Type 20 CAD between and . Refer to the CRA’s website for information regarding GST rebates: General Application for GST/HST Rebates.
Postal Stream
16. In the postal stream, border services officers (BSOs) are responsible for assessing duties and taxes on goods imported as mail. The GST/HST relief will be reflected on Form E14: CBSA Postal Import Form, which will be attached to the mail item(s) when it is delivered by Canada Post. For more information, refer to Memorandum D5-1-1: International mail processing and the CBSA’s Importing by mail webpage.
Refunds
17. Where goods qualify for relief, but it was applied at the time of accounting, a request for refund to the CBSA may be submitted.
18. For commercial goods, a correction or adjustment to a CAD can be submitted in CARM by applying the unique exemption code in the “Special Auth. OIC” field. For instructions on how to adjust commercial goods on a CAD or Form E14 in CARM, refer to Memorandum D17-2-1, Adjusting Commercial Accounting Declarations.
19. For casual goods, a refund request may be submitted by completing a Form B2G, CBSA Informal Adjustment Request Form according to the instructions indicated in Memorandum D6-2-6, Refund of Duties and Taxes on Non-commercial Importations. In the “Other” field of the form, write “GST tax break refund”. In addition to Form B2G, the refund request must be accompanied by a copy of the accounting declaration, a sales receipt/invoice, and proof of payment of the duties and taxes.
20. Where the GST/HST was paid directly to a foreign vendor at the time of purchase, and not to the CBSA or an approved courier, the purchaser must go directly to the vendor to request a refund.
Compliance Monitoring
21. Compliance will be monitored to ensure that the exemption is being applied accurately and only to eligible goods using existing CBSA systems and processes, in order to uphold the integrity of Canada’s customs framework and limiting disruptions for TCPs. In this respect, importations may be subject to examination at the time of importation and to post-release verification for compliance with any applicable programs or provisions administered by the CBSA. If non-compliance is encountered by the CBSA, in addition to assessments of any applicable customs duties and taxes, penalties may be imposed and interest will be assessed, where applicable.
Additional Information
22. For more information relating to the GST/HST tax break for goods imported from outside of Canada, refund requests, or other border-related matters, please Contact border information services.
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