When Canadian goods are exported for repair, alteration, additions or further processing, the Customs Act generally requires that they be subject to duties and taxes on the full value of the goods at the time of their return to Canada. However, the Canadian Goods Abroad program allows for the relief of duties on the “Canadian” portion of the value of the goods. Under this program, the duty is payable only on the value added to the Canadian goods in the form of labour or additional material outside of Canada. Similarly, under the Value of Imported Goods (GST/HST) Regulations, the GST/HST is payable only on the value of the processing performed outside of Canada.

What can We do for You?

Transmanna can also assist you in refunding duties imposed on the Canadian goods send abroad for repair, alteration, additions or further processing program and were imposed duty on full value on return.

What is “Canadian Goods Abroad Program” ?

As per subsections 12(3.1) and 17(1) of the Customs Act, all goods entering Canada, even goods that were previously in Canada, is an importation of those goods, and such goods are subject to duties unless there is a provision in legislation or regulation that relieves or remits the requirement to pay.

What is “Repair” ?

The term “repair” is defined as a corrective maintenance activity, which restores an item to its original “as-finished” condition. It includes replacing pieces of the good with new, reconditioned, overhauled or rebuilt components. “Repair” includes, but is not limited to, activities such as restoration, renovation, re-dyeing, cleaning, re-sterilizing.

No Value Addition

Most aircraft, vehicles, and vessels return to Canada customs duty free under tariff item Nos. 9813.00.00 or 9814.00.00 when they are returned to Canada without having been advanced in value or improved in condition by any process of manufacture or other means, or combined with any other article abroad.

Emergency Repairs

Government of Canada  provides full duties relief for aircraft, vehicles, or vessels that have undergone emergency repairs while abroad as a result of an unforeseen contingency that occurred outside Canada. Both non-commercial and commercial importers may claim the benefits of this provision. The emergency repairs must also have been necessary to ensure the safe return of the aircraft, vehicle, or vessel to Canada.

Unforeseen Contingency

Where the repairs are not emergency repairs performed as a result of an unforeseen contingency, the aircraft, vehicle or vessel may qualify for full or partial relief of the duties under an alternate provision .

Replacement goods

If a conveyance is irreparably damaged and replaced, the replacement aircraft, vehicle or vessel is not eligible under the Canadian goods abroad provisions. Full duties are owed on the replacement conveyance at the time of importation. Importers should ensure that any insurance claims include the cost of the duties owed. In addition, there are restrictions on the types of vehicles that can be imported into Canada.

Documentation

At the time of importation, both non-commercial and commercial importers, or their agent (for example, a truck driver working for a shipping company), must report all emergency and non-emergency repairs to the inspecting Canada Border Services Agency (CBSA) officer. The officer may stamp the repair invoice as proof of reporting.

Non-commercial importers

Non-commercial importers are generally not required to provide accounting documentation for emergency repairs to their conveyances.

Commercial carriers

Commercial carriers, the CBSA has a program that allows authorized highway carriers to present a summary accounting for repairs, including emergency repairs.

Entry in Form B3-3

In all other cases, the conveyance should be accounted for on a Form B3-3, Canada Customs Coding Form. The value for duty (VFD) appearing in field 37 will be the value of the repair. As this VFD is contrary to the valuation provisions in the Customs Act, special authorization code 98-02-0101 must be entered in field 26. Failure to use this code may subject the importer to an Administrative Monetary Penalty  for failing to value the goods correctly. Special authorization code 98-02-0101 fully remits the duties owing against the VFD for the eligible emergency repair to the aircraft, vehicle, or vessel.

Form B15

Where there is any doubt that the repairs were required as a result of an emergency, the inspecting CBSA officer will require the importer to account for their conveyance as a regular importation. Non-commercial importers will account for their conveyance on a Form B15, Casual Goods Accounting Document, while commercial importers will use a Form B3-3.

Procedure for Refund

If a non-commercial importer wishes to request a refund for repairs that were eligible under subsection 101(2) as emergency repairs, they must submit a Form B2G, CBSA Informal Adjustment Request, along with a copy of the Form B15 and all the information necessary to support the claim of emergency repairs. The Form B2G and supporting information is to be sent to a CBSA Casual Refund Centre. The addresses for the centres are found on the reverse of the Form B2G.

Form B2

If a commercial importer wishes to request a refund for repairs that were eligible under subsection 101(2) as emergency repairs, they must submit a Form B2, Canada Customs – Adjustment Request, along with the supporting information to the nearest CBSA office .

Failure to claim Benefits

If the importer fails to claim the benefits of the provision at the time of importation, and the full customs duties payable under the Customs Tariff are paid at the time of accounting, the importer may claim a refund under the same process as outlined in paragraphs 18 and 19.

Warranty Repair Work

Goods that are imported after having been exported for warranty repair work are non-taxable for GST/HST purposes pursuant to paragraph 3(j) of the Non-taxable Imported Goods (GST/HST) Regulations. Where the repair work is not performed pursuant to a warranty, but the conditions of section 13 of are met, GST/HST is only payable on the value of the work done outside of Canada, including the value of added goods, and any customs duties owing.

Other Goods

Goods that are returned to Canada, other than vessels of tariff item No. 9971.00.00, regardless of country of origin, after having been exported for repair or alteration to a free-trade partner country, are customs duty-free under tariff item No. 9992.00.00. The tariff item applies whether or not the repair is performed under a warranty. Parts incorporated into the repaired goods are not classified separately. If the repair was not a warranty repair under paragraph 3(j) of the  Non-taxable Imported Goods (GST/HST) Regulations , GST/HST is payable on the value of the repair, including any new parts..

Where neither the conditions of paragraph 3(j) of the  Non-taxable Imported Goods (GST/HST) Regulations to the Excise Tax Act nor of section 13 of the Value of Imported Goods (GST/HST) Regulations are met, the goods are subject to the GST/HST on the value of the goods according to the valuation provisions in the Customs Act.

Five Scenario s

There are five different scenarios for goods returning to Canada that have been repaired in a country other than a free-trade partner country of tariff item Nos. 9971.00.00 and 9992.00.00. For all five scenarios the goods are accounted for on a Form B3-3. The CGAP and section 13 of the Value of Imported Goods (GST/HST) Regulations also require the importer to present acceptable proof of export and an invoice containing a complete description and costs of the foreign repair work.

1. Scenario One

Customs duty free when classified in Chapters 1 to 97 of the Customs Tariff and entitled to GST/HST relief under paragraph 3(j) of the Non-taxable Imported Goods (GST/HST) Regulations or section 13 of the of the Value of Imported Goods (GST/HST) Regulations .

2. Scenario Two

Customs duty free when classified in Chapters 1 to 97 of the Customs Tariff and not entitled to GST/HST relief under paragraph 3(j) of the Non-taxable Imported Goods (GST/HST) Regulations or section 13 of the of the Value of Imported Goods (GST/HST) Regulations.

3. Scenario Three

 Subject to customs duty but eligible under the CGAP and entitled to GST/HST relief under paragraph 3(j) of the Non-taxable Imported Goods (GST/HST) Regulations or section 13 of the Value of Imported Goods (GST/HST) Regulations .

4. Scenario Four

Subject to customs duty, not eligible under the CGAP but entitled to GST/HST relief under paragraph 3(j) of the Non-taxable Imported Goods (GST/HST) Regulations  or section 13 of the  Value of Imported Goods (GST/HST) Regulations.

5. Scenario Five

Subject to customs duty, not eligible under the CGAP and not entitled to GST/HST relief under paragraph 3(j) of the Non-taxable Imported Goods (GST/HST) Regulations or section 13 of the Value of Imported Goods (GST/HST) Regulations .

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