The Department of Finance has issued the Notice of Ways and Means motion to implement certain provisions of the 2016 Federal Budget and other measures and explanatory notes that was tabled on March 22, 2016.
Here are some excise tax measures:
Medical and assistive devices:
A supply of insulin pens, insulin pen needles and intermittent urinary catheters will be zero-rated. This measure will generally apply to supplies made after 22 March 2016. GST code 57 would apply to these products under Section 21 of Part II of Schedule VI to the Excise Tax Act. Also, a supply of a product that is marketed exclusively for feminine hygiene purposes and is a sanitary napkin, tampon, sanitary belt, menstrual cup or other similar product is added to amend Part II and applies on or after July, 1, 2015.
Excise tax measures:
Budget 2016 proposes to restrict the excise tax relief for diesel oil used as heating oil or to generate electricity. Specifically, the relief for heating oil will be limited to heating in respect of buildings and the generation of electricity exemption for diesel fuel used in or by a vehicle will be eliminated. These measures will generally apply to fuel delivered or imported on July 1, 2016.
Excise duty measures:
Budget 2016 includes measures to enhance the security and collection rules which apply to support compliance with the Excise Act, 2001, legislation that imposes excise duty on tobacco products, spirits and wine. When a person objects to or appeals an assessment of excise duty payable, the CRA is generally precluded from taking action to collect the amount payable while a decision or judgment is pending in respect of the objection or appeal. There is also no current requirement that security be posted by the taxpayer to ensure that the amount assessed will be paid. Budget 2016 includes proposed measures that will authorize the Minister of National Revenue to require that security be posted for assessed amounts and penalties in excess of $10 million, to the extent that the amounts have not been collected. The measures will also provide that if the requested security is not supplied, the Minister will be authorized to take collection action to recover an amount equal to the security that had been requested. This measure will apply to amounts assessed and penalties imposed after the day on which the enacting legislation receives Royal Assent.
Manufacturers of tobacco products are currently required to hold a license and all tobacco products for duty-paid entry into the Canadian market must be stamped to indicate that duty has been paid. These manufacturers, and any other persons who import tobacco products, must post security with the CRA in order to acquire the licence or duty-paid stamps. Budget 2016 proposes to increase the maximum amount of security required to be issued a licence, or to obtain duty-paid stamps, from $2 million to $5 million. This change will be effective on the later of the day following the day on which the legislation enacting the new collection measures described above receives Royal Assent, or three months following 22 March 2016.
More information
The full text of the Notice of Ways and Means Motion to implement certain provisions of the budget tabled in Parliament on March 22, 2016 and other measures and Explanatory Notes explanatory notes is found here.