Canada Excise Tax Elimination

[griffey]

Hello all,

Can someone please explain to me how eliminating excise tax in Canada changes prices?
Does that affect only when you bring jewelery from the US?
How does it benefit customers?

Thanks.
Griffey.

 

[hlmr]

The elimination of the 10% excise/luxury tax means that jewellers in Canada no longer have to add an extra 10% to the price of the jewellery they sell to consumers, and send that 10% off to Ottawa each month/quarter.

I don''t know if it will make that much of a difference for the average customer, as most people are unaware it even existed in the first place and with the rising gold prices driving up the cost of jewellery, I don''t see much net gain for consumers.

When purchasing jewellery from the U.S., Canadians will now pay the GST and PST, but not the 10% luxury tax.

 

[holepunch]

I love this news ... coupled with the GST reduction to 6%, it makes buying online from the US even more attractive ...

But does anyone have an idea when the reduction is effective / when will the Canada Revenue Agency stop charging the excise tax?

 

[holepunch]

Date: 5/6/2006 1:08:58 PM
Author: holepunch
I love this news ... coupled with the GST reduction to 6%, it makes buying online from the US even more attractive ...

But does anyone have an idea when the reduction is effective / when will the Canada Revenue Agency stop charging the excise tax?

Well, found the answer to my own question.

Thanks to a special type of "Notice of Ways and Means Motion", they''re eliminating the excise tax as of May 2 (i.e. they''ve already stopped charging it in stores and on imports).

Excise Tax on Jewellery
An excise tax is imposed under the Excise Tax Act on jewellery manufactured and sold in, or imported into, Canada. The tax is payable by manufacturers on the sale price of domestically produced jewellery at the time of delivery to the purchaser, and by importers on the duty-paid value of imported jewellery in accordance with the provisions of the Customs Act. Jewellery exported from Canada is exempt from the tax. In addition to jewellery, whether real or imitation, the tax also applies to clocks (with a value greater than $50) and articles made of semi-precious stones.


The proposed repeal of the excise tax applies to deliveries or importation of jewellery, clocks and articles made of semi-precious stones, on or after May 2, 2006, in accordance with the provisions of the Excise Tax Act that govern by whom and when the tax is payable.

The GST reduction, by comparison, is only effective 1 July.

Here''s the finance ministry document with all the details

 

[TheDoctor]

Date: 5/6/2006 1:08:58 PM
Author: holepunch
I love this news ... coupled with the GST reduction to 6%, it makes buying online from the US even more attractive ...

But does anyone have an idea when the reduction is effective / when will the Canada Revenue Agency stop charging the excise tax?

Ahem...please explain why buying from the U.S. for Canadians will become even more attractive.

The elimination of the tax was intended to make Canadian manufacturer''s goods MORE attractive to Canadians, some of whom have evaded taxes through online purchases of jewellery and gemstones originating in the U.S. Canadian prices have always been higher because of the hidden 10% Excise tax. Some American websites have participated in smuggling by deliberately mis-labeling stones as "mineral samples" and grossly under-valuing the contents of FedEx packages that have crossed our border.
Now, we can finally compete on a level playing field.

Hopefully, I''ve cleared up this little misunderstanding.

 

[canuk-gal]

HI:

Another document at www.canadianjewellers.com/html/excisetax.htm

I thought the elimination of the tax would be done in stages, but has been eliminated outright.

cheers--Sharon

 

[feathers]

TheDoctor,

Eliminating the excise tax certainly makes puchasing diamond/jewellery from US more attractive for tax-paying Canadians. When I made my purchase in February this year, I paid 8% excise tax + 15% tax on top of the purchase price. If I were to purchase another item now, I would only have to pay 15% on top of the purchase price. Some of us do declare our purchases when crossing the border

It would be nice if the Canadian jewellers pass the excise tax cut benefits to the customers. Hmmm....perhaps it is time to do some shopping and check if the prices have come down.....

 

[griffey]

So does that mean that if you buy from Bluenile, GoodoldGold, Whiteflash, USAcerted etc the price should be cheaper than a few weeks ago?

I didn't know most prices in Canada included an excise tax. I know most places that I've been will cut the 15% tax (gst/pst) if you pay cash. Should their prices, in theory, go down as well because of the elimination of excise tax?

If so, this is the opportune time for Canadians to buy!

Thanks for the replies.
Griffey.

 

[canuk-gal]

Date: 5/6/2006 7:54:03 PM
Author: griffey
If so, this is the opportune time for Canadians to buy!

HI:

The Canadian/US $ exchange is excellent now; compared to the last well, decade and a half......and now no excise tax.....to say the least it is opportune....

cheers--Sharon

 

[feathers]

Griffey,

With the elimination of the excise tax, the prices at the Canadian stores should, in theory, go down. We will see about that

The prices at Bluenile, GoodoldGold, Whiteflash, USAcerted etc will stay the same. But the tax charged at the Canadian custom will go down so you will end up paying less compared to a purchase made a few weeks ago.

 

[griffey]

Thanks. I think I understand now.

So that means that theoredically...

Birks, Tiffany''s, Mappins should all have a reduction in the prices of their diamonds starting a few days ago.

Theoredically, even the diamond guys that offer the ''cash for no tax'' policy in those ''diamond buildings'' at dundas square and queen street should have reduced prices.

The internet companies - Blue Nile et al. will have the same prices, but instead of paying excise, GST, PST, when their diamonds are FedExed over the border, they''ll only be paying GST and PST. But I''m not sure that it''ll change much as from what I''ve heard, some people avoid paying excise/gst/pst altogether by driving and picking up the ''package'' from the US.

Is that pretty much it???

Thanks for the clarification.

Griffey

 

[JulieN]

you can drive things across the border, but they may ask for receipt, appraisal, any proof