Section 257.1 — Excise Tax Act: Sale of personal property by non-registrant municipality

If a person that is a municipality, or is designated to be a municipality for the purposes of section 259, and that is not a registrant makes, at any time, a taxable supply by way of sale of personal property that is capital property of the person (other than property of a person designated to be a municipality for the purposes of section 259 that is not designated municipal property of the person), the Minister shall, subject to subsection (2), pay a rebate to the person equal to the lesser of the basic tax content of the property at that time, and the tax that is or would, in the absence of section 167, be payable in respect of the taxable supply. A rebate shall not be paid to a person under subsection (1) unless the person files an application for the rebate within two years after the day on which the consideration for the supply became due or was paid without having become due. If, for the purposes of satisfying in whole or in part a debt or obligation owing by a person (in this subsection referred to as the “debtor”), a creditor exercises a right under an Act of Parliament or the legislature of a province or an agreement relating to a debt security to cause the supply of personal property and the debtor has a right to redeem the property under the Act or the agreement, the following rules apply: the debtor is not entitled to claim a rebate under subsection (1) with respect to the property unless the time limit for redeeming the property has expired and the debtor has not redeemed the property;

and if the debtor is entitled to claim the rebate, consideration for the supply is deemed, for the purposes of subsection (2), to have become due on the day on which the time limit for redeeming the property expires.