Remission Order provides relief of customs duties for eligible PPE goods
On May 6, 2020, the CBSA issued Customs Notice 20-19 (the “Customs Notice”), which includes information on the Certain Goods Remission Order (COVID-19), SOR-2020-101 (the “Order”) under the Customs Tariff. The Order provides for the relief of customs duties for eligible COVID-related goods that are imported on or after May 5, 2020. Relief under the Order can be claimed at the time of importation, or within two years of the date of importation.
Specifically, relief of customs duties is granted on the following COVID-related goods:
- Various plastic and textile face masks without mechanical parts;
- Various gloves, including plastic, rubber, textile, and surgical gloves;
- Various protective garments, including plastic, rubber, and textile clothing, and hair nets;
- Disinfectant and sterilization products, including hand sanitizer;
- Wipes, including industrial shop towels, and dish-cloths;
- Medical consumables, including swabs, and plastic urine bags;
- “Other” products, including soaps, sanitary wares (including toilet paper), and medical and surgical furniture.
Importers must note that certain other medical supplies, such as diagnostic test kits, various medical equipment and medical devices (including specified goods similar to those on the remission list), are not included in or covered by the Order. However, this is because those goods are already eligible for Most-Favoured Nation (“MFN”) duty-free tariff treatment, and therefore there would be no duties to remit at the time of importation. The Customs Notice sets out a full list of all goods covered by the remission, and all goods similar to those covered but which qualify for MFN duty-free tariff treatment.
As there is a degree of cross-over in categories of goods that are eligible and non-eligible for duty relief under the Order, it is essential to use the correct tariff classification code on customs coding forms. For example, cellulose or paper based masks imported under tariff item No. 4818.90.00 are ordinarily MFN duty-free, and therefore not included in the Order. However, textile masks, imported under tariff item 6307.90.99 are included under the remission.
In many of these cases, the Order will result in significant cost savings from a duties perspective. To carry forward the above example, textile material masks imported under tariff item No. 6307.90. are subject to 18% duties under the MFN tariff, but relieved from duty under the Order.
To be eligible for remission, the following conditions apply:
- The good must appear on the list of eligible goods;
- No other claim for relief under the Customs Tariff is applicable;
- The good must be imported on or after May 5, 2020 (and subject to custom duties); and
- The importer must retain and supply any requested supporting evidence to substantiate the remission claim where required, such as in the case of an examination or verification.
To obtain customs duties relief at the time of commercial goods’ importation, importers must insert code 20-304 in field 26 of Form B3 (Canada Customs Coding Form). For casual goods, usual accounting procedures apply, without the collection of duty. The CBSA also provides for importers to make corrections to imports for which remission is available, and seek re-determinations and refunds from the CBSA.