Excise Tax Act

Marginal note:Definitions

• 178.6 (1) In this section,

  original supplier

  original supplier of tangible personal property or a service means a person who makes a taxable supply of the property or service to another person who, in turn, supplies the property or service by way of a pass-through supply; (fournisseur initial)

  pass-through supply

  pass-through supply means a taxable supply of tangible personal property or a service made by a person for consideration that is equal to the consideration paid or payable by the person to the supplier who supplied the property or service to the person; (fourniture intermédiaire)

  ultimate recipient

  ultimate recipient means a recipient of a pass-through supply. (dernier acquéreur)

• Marginal note:Application for buyer designation

  (2) Where

  • (a) all or substantially all of the supplies of property and services made by a particular person in the ordinary course of the particular person’s business are pass-through supplies,

  • (b) in respect of each pass-through supply of tangible personal property or a service made by the particular person, the original supplier of the property or service causes physical possession of the property to be transferred to, or renders the service to, the ultimate recipient, or to another person on behalf of the ultimate recipient, and not to the particular person, and

  • (c) in respect of each pass-through supply of tangible personal property or a service made by the particular person, the ultimate recipient pays, on behalf of the particular person, to the original supplier of the property or service, the amount payable by the particular person to the original supplier as consideration for the property or service,

  the particular person may apply to the Minister, in prescribed form containing prescribed information and filed in prescribed manner, to be designated as a buyer.

• Marginal note:Designation as buyer

  (3) Where the Minister receives an application of a person under subsection (2), the Minister may, subject to such conditions as the Minister may at any time impose, designate the person as a buyer and notify the person in writing of the designation and the day it becomes effective.

• Marginal note:Revocation of designation

  (4) The Minister may revoke a designation of a person made under subsection (3)

  • (a) on application of the person, or

  • (b) where the person fails to comply with any condition imposed in respect of the designation,

  and, where the designation is revoked, the Minister shall notify the person in writing of the day the designation ceases to be effective.

• Marginal note:Buying group method

  (5) Where a person makes a pass-through supply of tangible personal property or a service at a time when a designation of the person as a buyer under subsection (3) is in effect, for the purposes of this Part (other than section 148, this section and Subdivision E of Division V), the following rules apply:

  • (a) the supply of the property or service by the original supplier of the property or service shall be deemed to have been made to the ultimate recipient and not to the person;

  • (b) the person shall be deemed not to have received a supply of the property or service from the original supplier nor to have supplied the property or service to the ultimate recipient;

  • (c) the consideration payable for, and the tax payable in respect of, the supply by the original supplier of the property or service shall be deemed to be payable by the ultimate recipient and any amount paid in respect of the consideration or tax shall be deemed to have been paid by the ultimate recipient;

  • (d) despite paragraph (c), the person and the ultimate recipient are jointly and severally, or solidarily, liable for the payment of the tax in respect of the supply made by the original supplier; and

  • (e) if the amount charged or collected by the original supplier of the property or service as or on account of tax under Division II in respect of the supply exceeds the tax that was collectible under that Division in respect of the supply, or if the amount of tax collectible under that Division in respect of the supply is reduced because of a reduction in the consideration for the supply, and the original supplier issues to, or receives from, the person a credit note or a debit note in respect of the supply, the person shall be deemed to have received or issued the note on behalf of the ultimate recipient.