ET/SL 55

December 7, 2005

Notice to all Licensed Jewellery Manufacturers and Wholesalers Under the Excise Tax Act, and to Importers

On November 25, 2005, Bill C-259, an Act to amend the Excise Tax Act (elimination of the excise tax on jewellery), received Royal Assent and became law.

Bill C-259 amended the wording of section 5 of Schedule I to the Excise Tax Act, and had the following immediate impacts on the administration of the excise tax:

• The excise tax on clocks adapted for household or personal use, except those specially designed for the use of the blind, increased to 10% of the amount by which the sale price or duty-paid value exceeds fifty dollars, effective November 25, 2005.
• The rate reduction schedule for clocks is eliminated.
• The excise tax on all watches is eliminated, effective November 25, 2005.
• The government will implement the provisions of Bill C-259, with the excise tax on clocks and watches applying, as described above.

The existing provisions of the Excise Tax Act contained in sections 5.1^{Footnote *} and 5.2^{Footnote *} of Schedule I remain in force, along with the previously announced rate reduction schedules (applying to articles made of semi-precious stones, jewellery, precious and semi-precious stones and goldsmiths' and silversmiths' products). The schedules and the rates are set out below:

Finally, as set out in the existing legislation, the excise tax on clocks, articles made of semi-precious stones, jewellery, precious and semi-precious stones and goldsmiths' and silversmiths' products will be eliminated on March 1, 2009. In this regard, all licensed manufacturers and wholesalers of jewellery will be provided with further information regarding the eventual cancellation of their excise tax licences early in 2009.

For further information, please go to the Canada Revenue Agency webpage or call 1-866-330-3304.