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CBSA Message (TCC19-037) - Cannabis Customs Excise Duty Procedures

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

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

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

5. 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.

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.
  • The Health Canada import permit number (e.g. IMP-1234-2019) must be entered in the Special Authority field (Field 26), excluding the hyphens (e.g. IMP12342019).

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.
  • The Health Canada import permit number (e.g. IMP-1234-2019) must be entered in the Special Authority field (Field 26), excluding the hyphens (e.g. IMP12342019).

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
  • The KI30 record would contain the Health Canada import permit number in the Special Authority field (excluding hyphens e.g.IMP12342019)

Line 2

  • 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
  • The KI30 record would contain the Health Canada import permit number in the Special Authority field (excluding hyphens e.g.IMP12342019)

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.

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.
  • The Health Canada import permit number (e.g. IMP-1234-2019) must be entered in the Special Authority field (Field 26), excluding the hyphens (e.g. IMP12342019).

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
  • The KI30 record would contain the Health Canada import permit number in the Special Authority field (excluding hyphens e.g.IMP12342019)

Topic(s)

Acts & Regulations
CBSA Policies & Decisions

Information source

Canada Border Services Agency (CBSA)
Disclaimer

The foregoing information is provided for informational purposes only and is not intended as, nor should it be considered, professional advice or a substitute for conducting your own thorough research and review. Before making any decisions or taking any action based on the information provided, you should conduct your own independent investigation and/or seek professional advice from a qualified expert in the relevant field. The CSCB disclaims all liability for actions taken or not taken based on the information provided.