Temporary Importation of Conveyances
Please note that the following Policy Statement, although correct at the time of issue, may not have been updated to reflect any subsequent legislative changes.
GST/HST policy statement P-024R
Date of Issue
June 22, 1992
Revised May 12, 1999
Temporary importation of conveyances
Sections 212, 213 and subsection 215(2) of the Excise Tax Act; Value of Imported Goods GST/HST Regulations (proposed amendment dated November 26, 1997)
National Coding System File Number(s)
November 5, 1991 for GST
April 1, 1997 for HST
Issue and Decision:
This policy statement describes the process for administering the provisions outlined in the Finance initiative announced in the November 5, 1991 press release and the proposed amendments to the Value of Imported Goods (GST) Regulations on the above topic dated November 26, 1997.
Treatment under the GST/HST
All goods being imported are taxable unless relieved under Section 213 and Schedule VII - Non-Taxable Importations. Since no provision has been made in this schedule for aircraft, such goods are taxable at time of importation on the value as determined for customs purposes.
For registrants importing goods for use in their commercial activity, tax payable at time of importation is claimable as an input tax credit. However, when the value of the goods being imported is on a large scale, there is significant concern about the cash flow costs especially when the goods are being imported for a short period of time.
Provision was made in the Value of Imported Goods (GST/HST) Regulations to allow a proportionate relief from GST/HST for conveyances which qualify for relief from customs duty under other measures (e.g., the Temporary Importation Regulations and the Vessel Duties Reduction or Removal Regulations).
Impact of the Finance Initiative:
To address perceived inequities in the area of temporarily imported conveyances, Finance announced a proposal in the November 5, 1991 press release that would provide GST relief in cases of temporary importations of qualified buses and aircraft.
The Value of Imported Goods (GST/HST) Regulations will be amended to implement this proposal to allow for the partial relief of GST on temporary importations of buses and aircraft. While the proposed relief is primarily intended to address importations of commercial jets and large touring buses, no restriction is placed on the interpretation of what is considered a qualified bus or aircraft. It can apply to single engine aircraft or to smaller tour buses which could be considered as minibuses.
For purposes of interpretation, the following should be noted. Relief under these rules is intended to be restricted to conveyances that will be in Canada under lease for less than two years at a time. In order to obtain relief as a temporary importation, the total period of time the conveyance is in Canada can be no more than 24 months over any period of time. This would mean, for example, that a ten year lease where the conveyance is in Canada for two months each year (e.g. 20 months) would be acceptable, but a five year lease where the conveyance is in Canada for six months each year (e.g. 30 months) would not be acceptable.
Current Administration for Other Modes of Transport
Customs determines eligibility for the temporary importation provisions applicable to other modes of transport (other than leased aircraft and buses) and has the appropriate mechanisms in place to administer those provisions. Importers qualifying for partial duty and GST/HST relief under these provisions are required to request the appropriate authority in advance. Customs will issue a letter of authority which the importer will attach to the import accounting documents covering the importation. Customs is responsible for extensions of the authorized period of temporary entry in Canada and for ensuring compliance with the regulations.
The proposed provisions for buses and aircraft, however, differ from the existing provisions for the other modes of transport in that there are certain conditions which must be met before GST/HST relief will be authorized for the conveyance, e.g. the lease requirement. GST/HST Rulings and Interpretations- is responsible for the interpretation of these new provisions and authorization of GST/HST relief, while Customs would include these temporary importations within the administrative mechanisms already in place.
Method of Administration of the Finance Initiative
Importers qualifying for partial relief from GST/HST for buses or aircraft are required to request authorization in advance from Tax Interpretation Services (TIS) Units in the TIS Centres. The TIS Units will consider the applications and be responsible for authorizing the use of this relief measure. That is, the TIS Unit will evaluate each application to determine whether it meets all the necessary conditions as to lease conditions, length of importation, etc. to qualify for the provision.
When the application is reviewed, a letter will be issued to the applicant informing the applicant whether the application has been approved and any conditions attached to the approval - period of time, renewals, etc. Once the letter is issued, the importer would attach the letter to the customs documents when the goods are presented for clearance. A copy of the letter of authorization is to be sent to the Customs region in which the applicant intends to import the conveyance to advise of the authorization.
In cases where the application is not approved, the applicant will be advised by letter of the reason for rejecting the application. The customs office will also be sent a copy in these instances. The applicant can request that Headquarters review the decision made by the TIS Centre.
Where the importer requests an extension to the original period of importation, approval from the TIS Centre which issued the original authorization will be required. Extensions must be requested prior to the expiry date of the original authorization. A copy of the letter approving the extension will be sent to the customs office. Customs will continue to be responsible for collection of the additional GST applicable and also the administration of the BF system of controls. If the importer fails to export the goods within the authorized period of importation or in any other way fails to comply with the terms of the temporary importation, Customs will take the necessary steps to administer the default.
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