The Canadian government provides many opportunities for
importers to receive refunds relating to customs duties previously
paid. It is good business practice for importers to be aware of
these opportunities and we have found in recent experience
that this awareness could be improved in our own clients and their
Refund of duties
The Customs Act allows for a refund, or partial refund,
to a person who paid duties on imported goods in many situations.
Refunds under section 74 are treated as voluntary self-adjustments
(filed under cover of a Form B2 – Canada Customs
– Adjustment Request).
There is a general four year time period for the submission of
refund claims, except for NAFTA or CIFTA goods where the time frame
is one year; perishable goods in some instances require notice of a
claim within 3 days.
There are several situations under which a person can claim for
a refund, such as (with corresponding time limits within which to
provide notice of a claim). The most important are
duties were paid on goods imported on or after January 1, 1994
from a NAFTA country, but no claim for preferential tariff
treatment under NAFTA was made at the time the goods were accounted
for (within 1 year of the date of accounting for the
duties were paid or overpaid due to an error in the
determination of origin, tariff classification or value for
duty (within 4 years after the date of accounting for the
There are other refund situations including where the imported
goods were damaged or inferior, where there were shortages or
refunds due to clerical errors made at importation.
There are various evidentiary requirements applicable to
claiming a refund under the above headings. In addition, each
reason for a refund claim has its own monetary limits for the
potential refund. As per below, clients are encouraged to contact
McMillan's International Trade group and the authors for
Under the Duty Drawback Program, the CBSA allows refunds of
duties to those who import goods into Canada that are re-exported
not being used for any purpose other than being displayed or
demonstrated in Canada;
being further processed, directly consumed or expended (goods
other than fuel or plant equipment) in the manufacture or
production in Canada; or
being used for the development or production in Canada of other
For goods that qualify, as per above, an importer may file a
drawback claim for the duties paid on the imported goods to recover
the duties, anti-dumping or countervailing duties, or excise taxes
other than GST/HST, plus interest. An importer may also claim a
drawback for scrap or waste which results from the further
processing of goods, however that scrap or waste cannot have
merchantable value or else it must also be exported.
Form K32 – Drawback Claim must be completed and
submitted with supporting documentation. The timeline to file the
drawback claim is 4 years from the date the imported goods were
released (or 2 years in situations where both imported and domestic
goods are used in the processing of end products).
The key factor in the ability to claim a drawback is that the
imported goods must subsequently either have been exported, or
deemed to be exported from Canada.
The foregoing provides only an overview. Readers are
cautioned against making any decisions based on this material
alone. Rather, a qualified lawyer should be consulted.
On May 6, 2013, the World Trade Organization’s (WTO) Appellate Body issued its decision affirming an earlier panel ruling that Canada had violated its national treatment obligations by offering green energy incentives that included domestic content requirements in Ontario that favoured local suppliers.