Completing an Excise Duty Return – Duty Free Shop

Excise Duty Memorandum EDM10-1-2

February 2023

This version replaces the one dated August 2003. This memorandum was revised to clarify how duty free shop operators are required to file their returns and to make the information more helpful and easier to understand. 

Except as otherwise noted, all statutory references in this publication are to the provisions of the Excise Act, 2001. The information in this publication does not replace the law found in the Act and its regulations.

If this information does not completely address your particular situation, you may refer to the Act or relevant regulation, or contact your CRA regional excise office for additional information. The offices are listed at Contact Information – Excise and Specialty Tax Directorate.

General

As a duty free shop operator under the Customs Act who is also licensed under the Excise Act, 2001 to possess and sell, in your duty free shop, imported unstamped manufactured tobacco that is subject to special duty under the Act, you must file Form B261, Excise Duty Return – Duty Free Shop, and pay special duty, as applicable, for each reporting period. For information on responsibilities and requirements related to licensed duty free shop operators, refer to Excise Duty Memorandum 7-1-4, Duty Free Shop Operators.

When completing Form B261, include only the information that applies to the reporting period for which you are filing and complete only the lines of the return that apply to you. Dollar amounts should be rounded to the nearest cent.

Filing your return

You can file your return either:

• electronically using the “File a return” function in My Business Account
• by mail at:

Canada Revenue Agency
Prince Edward Island Tax Centre
275 Pope Rd
Summerside PE  C1N 6E7

Instructions for page 1

Identification box

Enter the complete legal name and mailing address of your business.

Box 1 – Account number

Enter your 9-digit business number (BN) and 4-digit program account number.

Box 2 – Period covered (YYYY-MM-DD)

Enter the start and end dates of the reporting period for which this return is being filed.

Box 3 – Due date (YYYY-MM-DD)

Enter the due date for this return. The due date is the last day of the month following the reporting period entered in box 2. When the due date falls on a Saturday, a Sunday or a public holiday recognized by the Canada Revenue Agency (CRA), your return is considered on time if the CRA receives it or if it is postmarked on or before the next business day.

Special duty on imported manufactured tobacco

Line 4 – Cigarettes

In the “Quantity” column, enter the number of cigarettes received.

To calculate the amount of special duty payable, multiply the number of cigarettes you entered by the effective rate of special duty for cigarettes, and enter the result under “Duty payable”.

Line 5 – Tobacco sticks

In the “Quantity” column, enter the number of tobacco sticks received.

To calculate the amount of special duty payable, multiply the number of tobacco sticks you entered by the effective rate of special duty for tobacco sticks, and enter the result under “Duty payable”.

Line 6 – Manufactured tobacco (grams)

In the “Quantity” column, enter the number of grams of manufactured tobacco received.

To calculate the amount of special duty payable, multiply the amount you entered by the effective rate of special duty for manufactured tobacco, and enter the result under “Duty payable”.

Line 7 – Total (4 to 6)

Add the amounts from lines 4 to 6 of the “Duty payable” column and enter the total amount.

Line 8 – Refunds (B256 attached)

Enter the total refund claimed on line 8 only if you are attaching Form B256, Excise Act, 2001 – Application for Refund.

You may reduce the excise duty payable for the current reporting period by the amount of the refund you claim on Form B256, provided that form is attached to this return.

If you have filed a separate refund claim, do not record the amount of that claim on this return.

If you expect a refund from a previous fiscal month but have not yet received it, do not include that information on this return.

Line 9 – Net payable (7 minus 8)

Subtract the amount on line 8 from the amount on line 7. Enter the result on line 9.

Line 10 – Amount due

Enter the amount from line 9.

Line 11 – Payment / Credit due

Enter the amount from line 10.

If the amount is negative, a credit is due.

If the amount is positive, a payment is due. If you have not already paid it, enter this amount and make your payment online, by mail or in person at a financial institution. If you have already paid it, enter “0”.

Certification

Enter the name, title and telephone number of an authorized representative. The authorized representative must sign and date the return.

Instructions for page 2

Where necessary, enter in the appropriate box any changes related to your licence:

• name of licensee
• mailing address
• address for books and records
• contact name and title
• telephone number
• language of future correspondence
• the effective date of the above changes
• the date when the business closed and the reason for closure

Additional material required

Check any of the applicable boxes if you require additional:

• remittance vouchers
• pre-addressed return envelopes
• remittance envelopes

Further information