Section 176 — Excise Tax Act: Acquisition of used returnable containers

Subject to this Division, if a registrant is the recipient of a supply made in Canada by way of sale of used tangible personal property (other than a returnable container as defined in subsection 226(1)) 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, tax is not payable by the registrant in respect of the supply, the property is acquired for the purpose of consumption, use or supply in the course of commercial activities of the registrant, and the registrant pays consideration for the supply that is not less than the total of the consideration that the registrant charges for supplies by the registrant of used coverings or containers of that class, and all 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 amount determined by the formula (A/B) × C where A is if the supply is made in a participating province, the total of the rate set out in subsection 165(1) and the tax rate for that province, and in any other case, the rate set out in subsection 165(1), B is the total of 100% and the percentage determined for A, and C is the amount paid as consideration for the supply. For the purposes of subsection (1), where a person makes a supply of used tangible personal property to a registrant with whom the person is not dealing at arm’s length for consideration that exceeds the fair market value of the property at the time ownership of the property is transferred to the registrant, the value of the consideration for the supply shall be deemed to be equal to the fair market value of the property at that time. [Repealed, 1997, c. 10, s. 25]