Completing an Excise Duty Return – Licensed User
Excise Duty Memorandum EDM10-1-4
February 2023
This version replaces the one dated August 2003. This memorandum was revised to clarify how licensed users are required to file their returns and to make the information more helpful and easier to understand.
This memorandum provides line-by-line instructions on how to complete Form B263, Excise Duty Return – Licensed User, which must be filed by licensed users under the Excise Act, 2001.
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 licensed user, you must file Form B263, Excise Duty Return – Licensed User, and, if applicable, pay excise duty for each reporting period. For information on the responsibilities and requirements related to licensed users, refer to Excise Duty Memorandum EDM3-1-2, Licensed Users.
You must report inventories of alcohol or restricted formulations in your possession, regardless of who owns them. Do not report inventories of alcohol or restricted formulations that you own but do not have in your possession.
When completing Form B263, 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.
Line 4 – Spirits containing more than 7%
Spirits containing more than 7% absolute ethyl alcohol by volume must be reported in litres of absolute ethyl alcohol. In the “Quantity (litres of absolute ethyl alcohol/litres)” column, enter the total litres of absolute ethyl alcohol in spirits containing more than 7% absolute ethyl alcohol by volume on which excise duty is payable.
To calculate the amount of excise duty payable, multiply the quantity of spirits you entered by the effective rate of excise duty for spirits containing more than 7% absolute ethyl alcohol by volume, and enter the result under “Duty payable”.
Line 5 – Spirits containing not more than 7%
Spirits containing not more than 7% absolute ethyl alcohol by volume must be reported in litres of spirits. In the “Quantity (litres of absolute ethyl alcohol/litres)” column, enter the total litres of spirits containing not more than 7% absolute ethyl alcohol by volume on which excise duty is payable.
To calculate the amount of excise duty payable, multiply the quantity of spirits you entered by the effective rate of excise duty for spirits containing not more than 7% absolute ethyl alcohol by volume, and enter the result under “Duty payable”.
Line 6 – Wine containing more than 7%
Wine containing more than 7% absolute ethyl alcohol by volume must be reported in litres of wine. In the “Quantity (litres of absolute ethyl alcohol/litres)” column, enter the total litres of wine containing more than 7% absolute ethyl alcohol by volume on which excise duty is payable.
To calculate the amount of excise duty payable, multiply the quantity of wine you entered by the effective rate of excise duty for wine containing more than 7% absolute ethyl alcohol by volume, and enter the result under “Duty payable”.
Line 7 – Wine containing more than 1.2%, but not more than 7%
Wine containing more than 1.2% but not more than 7% absolute ethyl alcohol by volume must be reported in litres of wine. In the “Quantity (litres of absolute ethyl alcohol/litres)” column, enter the total litres of wine containing more than 1.2% but not more than 7% absolute ethyl alcohol by volume on which excise duty is payable.
To calculate the amount of excise duty payable, multiply the quantity of wine you entered by the effective rate of excise duty for wine containing more than 1.2% but not more than 7% absolute ethyl alcohol by volume, and enter the result under “Duty payable”.
Line 8 – Wine containing not more than 1.2%
Wine containing not more than 1.2% absolute ethyl alcohol by volume must be reported in litres of wine. In the “Quantity (litres of absolute ethyl alcohol/litres)” column, enter the total litres of wine containing not more than 1.2% absolute ethyl alcohol by volume on which excise duty is payable.
To calculate the amount of excise duty payable, multiply the quantity of wine you entered by the effective rate of excise duty for wine containing not more than 1.2% absolute ethyl alcohol by volume, and enter the result under “Duty payable”.
Line 9 – Total (4 to 8)
Add the amounts from lines 4 to 8 of the “Duty payable” column and enter the total.
Line 10 – Refunds (B256 attached)
Enter the total refund claimed on line 10 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 claimed 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 reporting period but have not yet received it, do not include that information on this return.
Line 11 – Net payable (9 minus 10)
Subtract the amount on line 10 from the amount on line 9. Enter the result on line 11.
Line 12 – Amount due
Enter the amount from line 11.
Line 13 – Payment / Credit due
Enter the amount from line 12.
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
Instructions for page 3
Identification box
Enter the complete legal name of your business.
Box 1 – Account number
Enter your 9-digit 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.
Inventory table for spirits
The inventory of spirits is reported in:
- litres of absolute ethyl alcohol, in the case of spirits containing more than 7% absolute ethyl alcohol by volume
- litres of spirits, in the case of spirits containing not more than 7% absolute ethyl alcohol by volume
Line A – Opening inventory
For each column, enter the total opening quantity of spirits. The opening inventories of spirits on line A of this return must equal the closing inventories of spirits on line E of the previous return.
Additions to inventory
Domestic spirits
For each column, enter the total quantity of domestic spirits added to inventory.
Imported spirits
For each column, enter the total quantity of imported spirits added to inventory.
Line B – Total additions
For each column, add the quantities of spirits added to your inventory and enter the total on line B.
Reductions to inventory
Used in an approved formulation
This category is separated into the following sub-categories:
- Restricted formulation
- Other (that is, an approved formulation that is not a restricted formulation)
For each column and applicable line, enter the total quantity of spirits used in an approved formulation.
Used to
For each column and applicable line, enter the total quantity of spirits used to:
- produce vinegar
- fortify wine
Returned to spirits licensee or excise warehouse licensee
For each column, enter the total quantity of spirits returned to the spirits licensee or excise warehouse licensee that supplied it, or to the spirits licensee that was previously responsible for it.
Exported spirits
For each column, enter the total quantity of spirits that you exported.
Used in approved processes
For each column, enter the total quantity of spirits used in approved processes (that is, processes approved by the CRA in which the spirits are destroyed or used for analysis).
Removed for other purposes (specify)
For each column, enter the total quantity of spirits removed from inventory for other purposes and specify the purpose for removal (for example, “taken for use”, including to analyze or destroy in a process that is not approved by the CRA, or “unaccounted for”).
Line C – Total reductions
For each column, add the quantities of spirits removed from your inventory and enter the total on line C.
Line D – Inventory adjustments (+ or −)
For each column, enter the necessary inventory adjustment. Adjustments may be necessary to balance the physical inventory with the book inventory. The closing inventory in your books must match the closing physical inventory for the reporting period.
Line E – Closing inventory (A + B) − C ± D
For each column, add the quantity on line A and the total on line B, subtract the total on line C, add or subtract the inventory adjustment on line D, and enter the result on line E. This closing inventory is the opening inventory for the following reporting period.
Instructions for page 4
Identification box
Enter the complete legal name of your business.
Box 1 – Account number
Enter your 9-digit 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.
Inventory table for wine
The inventory of wine is reported in litres of wine for each of the following:
- wine containing more than 7% absolute ethyl alcohol by volume
- wine containing more than 1.2% but not more than 7% absolute ethyl alcohol by volume
- wine containing not more than 1.2% absolute ethyl alcohol by volume
Line A – Opening inventory
For each column, enter the total opening quantity of wine. The opening inventories of wine on line A of this return must equal the closing inventories of wine on line E of the previous return.
Additions to inventory
Domestic wine
For each column, enter the total quantity of domestic wine added to inventory.
Imported wine
For each column, enter the total quantity of imported wine added to inventory.
Line B – Total additions
For each column, add the quantities of wine added to your inventory and enter the total on line B.
Reductions to inventory
Used in an approved formulation
This category is separated into the following sub-categories:
- Restricted formulation
- Other (that is, an approved formulation that is not a restricted formulation)
For each column and applicable line, enter the total quantity of wine used in an approved formulation.
Used to produce vinegar
For each column, enter the total quantity of wine used to produce vinegar.
Blended with spirits to produce spirits (or used to produce spirits)
For each column, enter the total quantity of wine blended with spirits to produce spirits or used to produce spirits (in other words, the total quantity of wine that you removed from your user’s licence to blend or use to produce spirits under your spirits licence).
Returned to wine licensee or excise warehouse licensee
For each column, enter the total quantity of wine returned to the wine licensee or excise warehouse licensee that supplied it, or to the wine licensee that was previously responsible for it.
Exported wine
For each column, enter the total quantity of wine that you exported.
Used in approved processes
For each column, enter the total quantity of wine used in approved processes (that is, processes approved by the CRA in which the wine is destroyed or used for analysis).
Removed for other purposes (specify)
For each column, enter the total quantity of wine removed from inventory for other purposes and specify the purpose for removal (for example, “taken for use”, including to analyze or destroy in a process that is not approved by the CRA, or “unaccounted for”).
Line C – Total reductions
For each column, add the quantities of wine removed from your inventory and enter the total on line C.
Line D – Inventory adjustments (+ or −)
For each column, enter the necessary inventory adjustment. Adjustments may be necessary to balance the physical inventory with the book inventory. The closing inventory in your books must match the closing physical inventory for the reporting period.
Line E – Closing inventory (A + B) − C ± D
For each column, add the quantity on line A and the total on line B, subtract the total on line C, add or subtract the inventory adjustment on line D, and enter the result on line E. This closing inventory is the opening inventory for the following reporting period.
Instructions for page 5
Identification box
Enter the complete legal name of your business.
Box 1 – Account number
Enter your 9-digit 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.
Inventory table for restricted formulations
The inventory of restricted formulations is reported in litres.
Line A – Opening inventory
Enter the total opening quantity of restricted formulations. The opening inventory of restricted formulations on line A of this return must equal the closing inventory of restricted formulations on line E of the previous return.
Additions to inventory
Restricted formulation produced
Enter the total quantity of restricted formulations produced.
Received from licensed users
Enter the total quantity of restricted formulations received from licensed users.
Imported restricted formulation
Enter the total quantity of restricted formulations that you imported and added to inventory.
Line B – Total additions
Add the quantities of restricted formulations added to your inventory and enter the total on line B.
Reductions to inventory
Used in an approved formulation
This category is separated into the following sub-categories:
- Restricted formulation
- Other (that is, an approved formulation that is not a restricted formulation)
For each applicable line, enter the total quantity of restricted formulations used in an approved formulation.
Removed to another licensed user
Enter the total quantity of restricted formulations removed to another licensed user.
Exported
Enter the total quantity of restricted formulations that you exported.
Line C – Total reductions
Add the quantities of restricted formulations removed from your inventory and enter the total on line C.
Line D – Inventory adjustments (+ or −)
Enter the necessary inventory adjustment. Adjustments may be necessary to balance the physical inventory with the book inventory. The closing inventory in your books must match the closing physical inventory for the reporting period.
Line E – Closing inventory (A + B) − C ± D
Add the quantity on line A and the total on line B, subtract the total on line C, add or subtract the inventory adjustment on line D, and enter the result on line E. This closing inventory is the opening inventory for the following reporting period.
Further information
For all technical publications related to the Excise Act, 2001 and its regulations, go to Excise duties technical information under the Excise Act, 2001.
To make a general or technical enquiry on excise duties or to request a ruling or interpretation related to excise duties, go to Contact Information – Excise and Specialty Tax Directorate.
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