Used Returnable Containers

(2) Subsection (1) is deemed to have come into force on April 24, 1996.

1990, c. 45, s. 12(1)

25. (1) Subsection 176(1) of the Act is replaced by the following:

Acquisition of used returnable containers

176. (1) Subject to this Division, where

    (a) a registrant is the recipient of a supply made in Canada by way of sale of used tangible personal property that is a usual covering or container of a class of coverings or containers in which property (other than property the supply of which is a zero-rated supply) is delivered,

    (b) tax is not payable by the registrant in respect of the supply,

    (c ) the property is acquired for the purpose of consumption, use or supply in the course of commercial activities of the registrant, and

    (d) except where the property is a returnable container (within the meaning assigned by section 226) of a class that is not supplied by the registrant when filled and sealed, the registrant pays to the supplier consideration for the supply that is not less than the total of

      (i) the consideration that the registrant charges for supplies by the registrant of used coverings or containers of that class, and

      (ii) tax calculated on that consideration,

for the purposes of this Part, the registrant is deemed (except where section 167 applies to the supply) to have paid, at the time any amount is paid as consideration for the supply, tax in respect of the supply equal to the tax fraction of that amount.

(2) Subsections 176(2) and (3) of the Act are repealed, subsection 176(4) of the Act is renumbered as subsection 176(2) and sub section 176(4.1) of the Act is repealed.

(3) Subsections 176(5) to (7) of the Act are repealed.

(4) Subsection (1) applies to supplies made after April 23, 1996 other than

    (a) any supply made to a registrant by a person before July 1, 1996 of used tangi ble personal property that was not ac cepted by the registrant in full or partial consideration for a supply by the regis trant to the person of other tangible personal property; and

    (b) any supply by a person to a registrant of particular used tangible personal property that, under an agreement in writing entered into before July 1, 1996, the registrant accepted in full or partial consideration for a supply by the regis trant to the person of other tangible personal property in respect of which the registrant charged or collected tax calcu lated without reference to the amount credited by the registrant to the person in respect of the particular property.

(5) Subsection (2) applies to supplies made after April 23, 1996.

(6) Subsection (3) applies after April 23, 1996.

1993, c. 27, s. 42(1)

26. (1) Subsections 177(1) to (1.4) of the Act are replaced by the following:

Supply on behalf of person not required to collect tax

177. (1) Where

    (a) a person (in this subsection referred to as the ``principal'') makes a supply (other than an exempt or zero-rated supply) of tangible personal property to a recipient (otherwise than by auction),

    (b) the principal is not required to collect tax in respect of the supply except as provided in this subsection, and

    (c) a registrant (in this subsection referred to as the ``agent''), in the course of a commer cial activity of the agent, acts as agent in making the supply on behalf of the princi pal,

the following rules apply:

    (d) where the principal is a registrant and the property was last used, or acquired for consumption or use, by the principal in an endeavour of the principal, within the meaning of subsection 141.01(1), and the principal and agent jointly elect in writing, the supply of the property to the recipient is deemed to be a taxable supply for the following purposes:

      (i) all purposes of this Part, other than determining whether the principal may claim an input tax credit in respect of property or services acquired or imported by the principal for consumption or use in making the supply to the recipient, and

      (ii) the purpose of determining whether the principal may claim an input tax credit in respect of services supplied by the agent relating to the supply of the property to the recipient, and

    (e) in any other case, the supply of the property to the recipient is deemed, for the purposes of this Part, to be a taxable supply made by the agent and not by the principal and the agent is deemed, for the purposes of this Part other than section 180, not to have made a supply to the principal of services relating to the supply of the property to the recipient.

Election for agent to account for tax

(1.1) Where a registrant, in the course of a commercial activity of the registrant, acts as agent in making a supply (otherwise than by auction) on behalf of a person who is required to collect tax in respect of the supply other wise than as a consequence of the application of paragraph (1)(d) and the registrant and the person jointly elect in prescribed form con taining prescribed information,

    (a) the tax collectible in respect of the supply shall be included in determining the net tax of the registrant and not of the person as if the tax were collectible by the regis trant; and

    (b) the registrant and the person are jointly and severally liable for all obligations under this Part that arise upon or as a consequence of the tax becoming collectible.

Supply by auctioneer

(1.2) Where a registrant (in this subsection referred to as the ``auctioneer''), acting as auctioneer and agent for another person (in this subsection referred to as the ``principal'') in the course of a commercial activity of the auctioneer, makes on behalf of the principal a supply by auction of tangible personal proper ty to a recipient , the supply is deemed, for the purposes of this Part, to be a taxable supply made by the auctioneer and not by the principal and the auctioneer is deemed, for the purposes of this Part other than section 180, not to have made a supply to the principal of services relating to the supply of the property to the recipient.

(2) Subsection (1) applies to any supply made after April 23, 1996 by a registrant to a recipient on behalf of another person and to any supply made by the registrant to the other person of services relating to the supply to the recipient except that

    (a) subsection (1) does not apply to a supply of tangible personal property made on or before June 30, 1996 where

      (i) the supply is made by an agent otherwise than by auction on behalf of a principal who would not have been required to collect tax in respect of the supply if the principal had made the supply otherwise than through an agent and

        (A) if the agent disclosed in writing to the recipient of the supply that the agent was making the supply on behalf of another person who was not required to collect tax in respect of the supply, no amount on account of tax in respect of the supply was charged or collected, or

        (B) in any other case, the agent pays to, or credits in favour of, the princi pal the amount on account of the supply of the property determined by the formula in paragraph 177(1.1)(f) of the Act as it applied to supplies made before April 23, 1996, or

      (ii) the supply is made by auction on behalf of a principal and the auction eer pays to, or credits in favour of, the principal the amount on account of the supply of the property determined under subsection 177(1.3) of the Act with reference to subsection 177(1.2) of the Act, as those subsections applied to supplies made before April 23, 1996; and

    (b) with respect to supplies by auction of tangible personal property made before April 1997, section 177 of the Act, as amended by subsection (1), shall be read without reference to ``(otherwise than by auction)'' in subsections (1) and (1.1) thereof and without reference to subsec tion (1.2) thereof.

1990, c. 45, s. 12(1)

27. (1) Section 178 of the Act is repealed.

(2) Subsection (1) is deemed to have come into force on April 24, 1996.

1993, c. 27, s. 43(1)

28. (1) Subsection 178.3(3) of the Act is replaced by the following:

Adjustment to direct seller's net tax

(3) For the purposes of this Part, where a direct seller has made a supply of an exclusive product of the direct seller in circumstances in which an amount was required under para graph (1)(d) to be added in determining the net tax of the direct seller and an independent sales contractor of the direct seller subse quently supplies the product to the direct seller in a particular reporting period of the direct seller, the contractor is deemed not to have so supplied the product and the amount may be deducted, in determining the net tax of the direct seller for the particular reporting period or a subsequent reporting period, in a return under Division V filed by the direct seller within two years after the day on or before which the return under Division V for the particular reporting period is required to be filed.

1993, c. 27, s. 43(1)

(2) The portion of subsection 178.3(4) of the Act after paragraph (c) is replaced by the following:

the direct seller may deduct the amount deter mined under paragraph (c), in determining the net tax for the particular reporting period of the direct seller in which the payment or credit is given or a subsequent reporting period, in a return under Division V filed by the direct sell er within two years after the day on or before which the return under Division V for the par ticular reporting period is required to be filed.

(3) Subsections (1) and (2) apply to deductions in respect of supplies of exclu sive products made by independent sales contractors after June 1996.

1993, c. 27, s. 43(1)

29. (1) Subsection 178.4(3) of the Act is replaced by the following:

Adjustment to distributor's net tax

(3) For the purposes of this Part, where a distributor of a direct seller has made a supply of an exclusive product of the direct seller in circumstances in which an amount was re quired under paragraph (1)(d) to be added in determining the net tax of the distributor and another independent sales contractor of the direct seller subsequently supplies the product to the distributor in a particular reporting period of the distributor, the other contractor is deemed not to have so supplied the product and the amount may be deducted, in determin ing the net tax of the distributor for the particular reporting period or a subsequent reporting period, in a return under Division V filed by the distributor within two years after the day on or before which the return under Division V for the particular reporting period is required to be filed.

1993, c. 27, s. 43(1)

(2) The portion of subsection 178.4(4) of the Act after paragraph (c) is replaced by the following:

the distributor may deduct the amount deter mined under paragraph (c), in determining the net tax for the particular reporting period of the distributor in which the payment or credit is given or a subsequent reporting period, in a return under Division V filed by the distributor within two years after the day on or before which the return under Division V for the par ticular reporting period is required to be filed.

(3) Subsections (1) and (2) apply to deductions in respect of supplies of exclu sive products made by independent sales contractors after June 1996.

1993, c. 27, s. 44(1)

30. (1) Subparagraph 179(1)(a)(i) of the Act is replaced by the following:

      (i) makes a taxable supply in Canada of tangible personal property by way of sale, or a taxable supply in Canada of a service of manufacturing or producing tangible personal property, to the non- resident person, or acquires physical possession of tangible personal property (other than property of a person who is resident in Canada or is registered under Subdivision d of Division V ) for the purpose of making a taxable supply of a commercial service in respect of the property to the non-resident person, and

(2) Subparagraphs 179(1)(c)(i) to (iii) of the Act are replaced by the following:

      (i) where the registrant has caused physi cal possession of the property to be transferred to a consignee to whom the non-resident person has supplied the property for no consideration, nil, and

      (ii) in any other case, the fair market value of the property at that time, and

(3) Paragraph 179(1)(d) of the Act is replaced by the following:

    (d) where the registrant made a supply of a service referred to in subparagraph (a)(i) in respect of the property to the non-resident person, except in the case of a supply of a service of storing or shipping the property, the registrant is deemed not to have made that supply of the service.

(4) Subsection (1) is deemed to have come into force on December 17, 1990.

(5) Subsections (2) and (3) apply to supplies made after April 23, 1996.

31. (1) The Act is amended by adding the following after section 180:

International Travel

Definitions

180.1 (1) The definitions in this subsection apply in this section.

``internatio-
nal flight''
« vol internatio-
nal »

``international flight'' means any flight (other than a flight originating and terminating in Canada) of an aircraft that is operated by a person in the course of a business of supply ing passenger transportation services.

``internatio-
nal voyage''
« voyage internatio-
nal »

``international voyage'' means any voyage (other than a voyage originating and termi nating in Canada) of a vessel that is oper ated by a person in the course of a business of supplying passenger transportation ser vices.

Delivery while on international travel

(2) For the purposes of this Part, where a supply of tangible personal property or a service (other than a passenger transportation service) is made to an individual on board an aircraft on an international flight or a vessel on an international voyage and physical posses sion of the property is transferred to the individual, or the service is wholly performed, on board the aircraft or vessel, the supply is deemed to have been made outside Canada.

(2) Subsection (1) applies to supplies made after April 23, 1996.

1993, c. 27, s. 46(1)

32. (1) Subsections 182(1) and (2) of the Act are replaced by the following:

Forfeiture, extinguished debt, etc.

182. (1) For the purposes of this Part, where at any time, as a consequence of the breach, modification or termination after 1990 of an agreement for the making of a taxable supply (other than a zero-rated supply) of property or a service in Canada by a registrant to a person , an amount is paid or forfeited to the registrant otherwise than as consideration for the supply, or a debt or other obligation of the registrant is reduced or extinguished without payment on account of the debt or obligation,

    (a) the consideration fraction of the amount paid, forfeited or extinguished, or by which the debt or obligation was reduced, as the case may be, is deemed to be consideration for the supply paid, at that time, by the person ; and

    (b) the registrant is deemed to have col lected, and the person is deemed to have paid, at that time, tax in respect of the supply calculated on that consideration.

Transitional

(2) Paragraph (1)(b) does not apply in respect of amounts paid or forfeited, and debts or other obligations reduced or extinguished, as a consequence of a breach, modification or termination of an agreement where

    (a) the agreement was entered into in writing before 1991;

    (b) the amount is paid or forfeited, or the debt or other obligation is reduced or extinguished, as the case may be, after 1992; and

    (c) tax in respect of the amount paid, forfeited or extinguished, or by which the debt or obligation was reduced, as the case may be, was not contemplated in the agreement.

Application of Division IX

(2.1) Division IX does not apply for the purposes of subsection (1).

(2) Subsection (1) is deemed to have come into force on April 24, 1996.

1993, c. 27, s. 47(2)

33. (1) Paragraph 183(1)(d) of the Act is replaced by the following:

    (d) where the supply referred to in para graph (a) is a supply of real property included in section 9 of Part I of Schedule V, in section 1 of Part V.1 of that Schedule or in section 25 of Part VI of that Schedule , for the purposes of sections 193 and 257, the supply is deemed to be a taxable supply and the tax payable in respect of the supply is deemed to be equal to tax calculated on the fair market value of the property at that time.