SI/78-5719784
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20196
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FINANCIAL ADMINISTRATION ACTCruiser Remission OrderOrder Respecting Remission of Customs Duties and Sales Tax on certain Pleasure CruisersP.C.1978-84219783
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His Excellency the Governor General in Council, on the recommendation of the Minister of Finance and the Treasury Board, pursuant to section 17 of the Financial Administration Act, is pleased hereby to make the annexed Order respecting the remission of Customs duty and sales tax on certain pleasure cruisers.Short Title
This Order may be cited as the Cruiser Remission Order.
Interpretation
In this Order,base year meansin the case of a class A manufacturer, the calendar year 1969, andin the case of a class B manufacturer, the calendar year immediately prior to the calendar year for which remission is first claimed under this Order; (année de base)Canadian value added in boats means the factory cost of production ofwater-borne pleasure craft, other than cruisers, andhulls and parts for water-borne pleasure craft, other than cruisersproduced by a manufacturer in Canada for sale, minusthe cost, other than any cost set out in paragraph (d), of any imported parts and materials used in the production of the craft, hulls and parts, andthe cost of duty, freight and insurance and any other cost incurred in transporting the imported parts and materials from the point of their shipment to the customs office where the goods are reported; (valeur canadienne ajoutée dans le cas des bateaux)Canadian value added in cruisers means the factory cost of production of cruisers and of hulls and parts for cruisers produced by a manufacturer in Canada for sale minusthe cost, other than any cost set out in paragraph (b), of any imported parts and materials used in the production of cruisers or of hulls and parts for cruisers, andthe cost of duty, freight and insurance and any other cost incurred in transporting the imported parts and materials from the point of their shipment to the frontier port; (valeur canadienne ajoutée dans le cas des yachts de croisière)class A manufacturer means a manufacturer who produced cruisers in Canada during the calendar year 1969; (fabricant de la catégorie A)class B manufacturer means a manufacturer who did not produce cruisers in Canada during the calendar year 1969 and who produced water-borne pleasure craft in Canada subsequent to the calendar year 1976; (fabricant de la catégorie B)cruiser means a water-borne pleasure craft, other than a houseboat, not equipped with or designed to be equipped with sails, that is25 feet or more in overall length, andequipped with or designed to be equipped with one or more inboard motors; (yachts de croisière)factory cost of production means the aggregate of the following costs to the manufacturer reasonably attributable to his production of water-borne pleasure craft and of hulls and parts for water-borne pleasure craft, namely,the cost of parts and materials,the transportation costs, including insurance charges, incurred in transporting parts and materials from a supplier to the factory in Canada of the manufacturer to the extent that such costs are not included under paragraph (a),the wages paid for direct production labour,administrative and general expenses, andthe manufacturer's overhead expenses for his factory in Canada; (coût de production)frontier port[Revoked, SI/88-17, s. 2]initial production period means, in respect of a class B manufacturer, the three consecutive calendar years immediately following that manufacturer's base year; (période initiale de production)Minister means the Minister of National Revenue; (ministre)warehouse has the same meaning as in the Customs Act. (entrepôt) SI/88-17, s. 2
In this Order "manufacturer's overhead expenses for his factory in Canada" means, subject to subsection (2), the aggregate ofsuch part of the following costs to the manufacturer as is reasonably attributable to the production by the manufacturer of water-borne pleasure craft and of hulls and parts for water-borne pleasure craft, namely,light, heat, power and water,materials used in the production operation but not incorporated in the final product,workmen's compensation, unemployment insurance and group insurance premiums, pension contributions and similar expenses,taxes on land and buildings in Canada,rent for factory premises,fire and other insurance premiums in respect of production inventories and the manufacturer's factory and its equipment,maintenance and repairs to buildings, machinery and equipment,tools, jigs, dies, fixtures and other similar plant equipment of a non-permanent character,engineering services, experimental work and product development work executed in Canada,indirect and non-production labour, andmiscellaneous factory expenses; anda capital cost allowance of 10 per cent per annum on the cost of buildings, machinery and equipment used by the manufacturer and reasonably required by the manufacturer in the production of water-borne pleasure craft and of hulls and parts for water-borne pleasure craft.A manufacturer's overhead expenses for his factory in Canada in respect of water-borne pleasure craft and hulls and parts for water-borne pleasure craft shall not include the following:the payment of any royalty or any payment analogous to a royalty;the payment of any amount by a manufacturer as a result of a warranty given by the manufacturer; orany expenses incurred by the manufacturer in respect of the advertising for sale or the sale of water-borne pleasure craft or hulls and parts for the water-borne pleasure craft.
Remission of Customs Duties
Subject to sections 6 and 10, remission is hereby granted of the customs duties paid or payable under the Customs Tariff in respect of cruisers imported or taken out of warehouse by or on behalf ofa class A manufacturer in each calendar year subsequent to December 31, 1976, ora class B manufacturer, other than a class B manufacturer referred to in section 5, in each calendar year subsequent to his base year,the aggregate of the value for duty of which does not exceed the amount by which the sum ofthe manufacturer's Canadian value added in cruisers in the calendar year for which the remission is claimed, andthe lesser ofthe manufacturer's Canadian value added in boats in that calendar year, andthe manufacturer's Canadian value added in boats in his base yearexceeds the sum of the manufacturer'sCanadian value added in boats, andCanadian value added in cruisers,in his base year.SI/88-17, s. 2
Subject to subsection (2) and sections 7 and 10, on the election of a class B manufacturer pursuant to section 7, remission is hereby granted to that manufacturer of the customs duties paid or payable under the Customs Tariff in respect of cruisers imported or taken out of warehouse prior to January 1, 1998 by the manufacturer or on the manufacturer's behalf during the initial production period, the aggregate of the value for duty of which does not exceed the amount by which the sum ofthe manufacturer's Canadian value added in cruisers in the initial production period, andthe lesser ofthe manufacturer's Canadian value added in boats in the initial production period, andthree times the sum of the manufacturer's Canadian value added in boats in his base yearexceeds three times the sum of the manufacturer'sCanadian value added in boats, andCanadian value added in cruisers,in his base year.Where at any time in any year during the initial production period the aggregate value of cruisers imported or taken out of warehouse for which remission may be granted pursuant to subsection (1) exceeds one-third of the amount of the aggregate value for duty on which remission would, but for this subsection, be granted pursuant to subsection (1), no remission shall be granted in respect of such cruisers imported or taken out of warehouse during the balance of that year.SI/88-17, s. 2; SI/98-6, s. 7
No remission shall be granted to a class A manufacturer pursuant to section 4 unless a claim for remission is made by the manufacturer within three years following the calendar year for which remission is claimed.No remission shall be granted to a class B manufacturerpursuant to section 4, unless a claim for remission is made by the manufacturer within three years following the calendar year for which remission is claimed; orpursuant to section 5, unless the manufacturer makes an election pursuant to section 7 and a claim for remission is made by the manufacturer during the initial production period for that manufacturer.
Election of Initial Production Period
No remission shall be granted pursuant to section 5 to a class B manufacturer unless, prior to the expiration of the manufacturer's initial production period, the manufacturer makes an election in writing addressed to the Minister electing to claim remission for the initial production period.An election made pursuant to subsection (1) may be withdrawn by a class B manufacturer by a notice in writing to that effect, addressed to the Minister, at any time before the expiry of that manufacturer's initial production period.Where an election is withdrawn by a class B manufacturer pursuant to subsection (2), remission shall be determined pursuant to section 4 for each calendar year of the initial production period.SOR/85-113, s. 1
Remission of Sales Tax
Remission is hereby granted of the sales tax paid or payable under the Excise Tax Act on each cruiser for which customs duties are remitted by this Order in an amount equal to the difference between the sales tax calculated on the duty paid value of the cruiser and the sales tax calculated on the value for duty of the cruiser.SI/88-17, s. 2(E)
Bond
As a condition precedent to any remission granted pursuant to sections 4 and 8, where duty and sales taxhave been paid and the remission is granted in the calendar year for which it is claimed, orhave not been paid and the remission is applied for in the calendar year for which it is claimed,a class A manufacturer or a class B manufacturer shall, for each calendar year for which he claims remission and to ensure the performance by him of the conditions on which remission is granted under this Order, give to the Minister a guaranteed bond or other security in an amount estimated by the Minister, to be equal to the customs duties and sales tax payable on the imported goods referred to in sections 4 and 8, or $250,000, whichever is the lesser.As a condition precedent to any remission granted pursuant to sections 5 and 8, a class B manufacturer shall, for the initial production period for which he claims remission and to ensure the performance by him of the conditions on which remission is granted under this Order, give to the Minister a guaranteed bond or other security in an amount estimated by the Minister to be equal to the customs duties and sales tax payable on the imported goods referred to in sections 5 and 8, or $500,000, whichever is the lesser.SI/82-33, s. 1; SI/88-17, s. 2(E)
Reports
A class A manufacturer and a class B manufacturer shall submit to the Minister as a condition of any remission granted under this Order such reports and other information as may be required by the Minister for the due administration of this Order.