The CSCB asked CBSA the following question regarding participants in the Exporters of Processing Services (EOPS) program and the collection of surtax.
Can CBSA comment on whether surtax is applicable on the following situation:
An importer imports duty free goods of a tariff classification subject to surtax. The importer is part of the EOPS program that allows the remission of GST. There would have been no need for this importer to apply for duty relief since the goods are duty free. The goods are obviously going to be exported after processing, at which time drawback could be filed to reclaim the surtax, but the drawback step could be omitted if the EOPS participant is relieved from the initial payment of surtax.
CBSA’s response is:
The EOPS Program is a separate program from the Drawback Program and Duties Relief Program, and cannot provide relief of surtax.
The Duties Relief Program may provide relief of “duties” as defined in section 80 of the Customs Tariff, which includes surtax. Therefore, an importer wishing to have relief of surtax at the time of importation for goods that will be subsequently exported must have applied for the Duties Relief Program and been granted a licence for the imposed surtax (regardless if goods are subject to customs duties or not) prior to importation.
Or, if the importer pays the surtax on imported goods that are subsequently exported, they may be eligible for a drawback of the surtax paid under the Drawback Program.
These steps to obtain relief of the surtax under the CBSA’s programs cannot be omitted/replaced by use of the EOPS Program.