Without this joint election, only the province would be eligible for the rebate. The 2021 budget aims to clarify which party should request the rebate by specifying that only the seller is eligible for this rebate if they jointly choose with the province to be eligible. Under current legislation, a refund of excise taxes paid can be claimed by the province or the vendor of the goods, in which case the province should not have paid the incorporated tax.
However, some provinces have entered into special agreements with the federal government under which they agree to pay each other’s taxes.įor provinces that have not entered into such agreements, the ETA offers a provincial usage rebate for excise taxes. 125 of Constitution Act, 1867, 3provinces are exempt from paying federal excise taxes imposed on fuels, motor vehicle air conditioners and gas guzzlers under Part III of the ETA. Refund of excise tax for products purchased by provincesīy virtue of art. The following bulletin provides an overview of these proposed changes. Finally, the excise tax refund mechanism for the provinces is changed. In addition, excise duties on tobacco products are increased. These changes will designate new categories of “taxable products,” imposing excise duties on vaping products, and sales tax on new luxury vehicles, aircraft and boats for personal use.
Budget 2021 proposes to update Canada’s current excise tax and duty regime by amending both the Excise Tax Act (the “ ETA“) 1 and Excise Act 2001 (the “ EA“), 2 and also impose a special sales tax on certain luxury items.