Correcting a Canadian entry: section 32.2 corrections, refunds and the CARM deadlines

Which route fixes what the audit found?

A post-entry audit of Canadian entries produces two kinds of findings, and the Customs Act sends them down different routes. Underpayments in origin, tariff classification or value for duty are an obligation: section 32.2 requires a correction within 90 days. Overpayments are a right: section 74 allows a refund, and CBSA Memorandum D6-2-3 is explicit that refunds under section 74 "are voluntary". SIMA duties and decisions you disagree with take a third route.

Pick the route by finding:

Codes are examples of the format; the full list is Appendix A of Memorandum D17-2-1, and a reason code with the wrong legislative authority gets the request rejected.

When does the 90-day clock start?

The clock starts when you have "reason to believe" a declaration is wrong. Memorandum D11-6-6 defines that as specific information, and lists where it comes from:

• CBSA assessments, rulings and trade compliance verification reports addressed to you.
• Final decisions of the Canadian International Trade Tribunal or the courts involving you.
• Information from exporters or suppliers, such as a cancelled certificate of origin or a retroactive price increase.
• Legislative provisions that are "prima facie, evident, and transparent", such as a product that plainly belongs in another chapter.
• The final report of an audit you commissioned, if you had no earlier reason to believe, the CBSA has not started a verification, and the report identifies only corrections that are revenue neutral or owed to the CBSA.
• Knowledge that goods were diverted from the conditions of a relief tariff item.

Three rules follow from the memorandum. If the 90th day falls on a weekend or holiday, the filing is due the next business day. The 90 days cover not just the lines you found but the "same and similar goods" and goods affected by the same issue, so a finding on one product reaches every entry of it within four years. And the obligation applies only where the correction produces an amount owed to the CBSA or is revenue neutral.

If the specific information existed before your audit, the CBSA can treat the earlier date as the start of the clock. Memorandum D11-6-10 then requires corrections back to that date, up to four years.

What is the difference between a correction and an adjustment in CARM?

The words overlap, and the overlap causes mistakes.

In CARM, which became the CBSA's system of record on October 21, 2024, the Commercial Accounting Declaration (CAD/B3) replaced both the B3 coding form and the B2 adjustment request. Every change is a new version of the same CAD. CBSA Memorandum D17-1-5 uses "correction" for a change made between the CAD's acceptance and 11:59:59 pm on the payment due date, available only to importers with Release Prior to Payment (RPP) privileges and their broker. After the payment due date, the CAD is final and any change is an "adjustment" under D17-2-1.

A "section 32.2 correction" is the legal obligation, whatever CARM calls the filing. In practice, anything a post-entry audit finds is past the payment due date, so a section 32.2 correction is filed as a CAD adjustment carrying a section 32.2 reason code. A section 74 refund is also a CAD adjustment, with a section 74 reason code.

The billing cycle sets when the money moves. D17-1-5 sets the billing period as the 18th of one month to the 17th of the next, with payment due 10 weekdays after the 17th. D17-2-1 applies the same rule to adjustments: an adjustment posted between the 18th of month 1 and the 17th of month 2 is due 10 weekdays after the 17th of month 2.

How do you file a section 32.2 correction?

1. Fix the reason-to-believe date and the 90th day. Write it down with the evidence that set it.
2. Find every affected line. Search four years of CADs for the same and similar goods and the same issue, not just the lines in the original finding.
3. Recalculate each line: the corrected tariff item, value or tariff treatment, then duty, surtax and GST on the corrected value. Rates for any tariff item, origin and date are in the free duty calculator.
4. Submit a new version of each CAD through the CARM Client Portal, EDI or API with the section 32.2 reason code. Up to three reason codes may be used on one adjustment. Two or more CADs with the same legislative issue can go in one mass adjustment.
5. If a CAD is locked because the CBSA is already reviewing an earlier adjustment, file a Record of Intent. D17-2-1 says the date on it is used as the filing date for interest, and it protects your time limits until the CAD is unlocked.
6. Pay the amount owing and interest on the billing cycle. Interest on duties owing runs at the specified rate, which section 2 of the Customs Act defines as the prescribed rate plus 6% a year.
7. Keep the file: the audit report, the calculation and the Statement of Adjustment the CBSA issues for each CAD.

D11-6-6 says a correction counts as filed on the date the CAD is completed in CARM, or sent by registered mail or courier, or delivered by hand where paper filing applies.

How do you claim a refund under section 74?

Section 74(1) lists the grounds. The ones a post-entry audit usually finds are an origin, classification or value error (paragraph (e)), a preference that was available but not claimed (paragraphs (c.1) and (c.11)), a clerical or typographical error (paragraph (d)), a shortage (paragraph (b)) and a prescribed reason (paragraph (g)), which D17-2-1 uses for surtax paid in error.

Time limits. Section 74(3)(b) gives four years after accounting for every ground except (c.1), which covers goods from Chile with an unclaimed CCFTA preference and has one year or a longer prescribed period. CUSMA is not (c.1): the Act's schedule lists "CUSMA country" in Part 4, so an unclaimed CUSMA preference is a (c.11) refund with four years. The CBSA's CUSMA guidance confirms "a period of four years from the date the goods were accounted for". D6-2-3, which still says one year for NAFTA goods, predates CUSMA and carries a note that it is under review.

Documents, the same day. D17-2-1 requires supporting documents for every change that results in a refund, uploaded through the CARM Client Portal by 11:59:59 pm Eastern on the day the adjustment is submitted. A refund adjustment without them is rejected, and "legislative time limits will not be protected". For a mass adjustment that results in a refund across fewer than 25 CADs, documents are needed for each CAD.

GST comes back through the CRA. D17-2-1 says the CBSA decides GST refund requests but does not credit the GST to the importer's account. GST registrants recover it as an input tax credit; non-registrants apply to the Canada Revenue Agency with the CBSA's Statement of Adjustment.

A refund is a re-determination. Under section 74(1.1), a refund on origin, classification or value grounds is treated as a re-determination under section 59(1)(a). The CBSA can still review the CAD afterwards: section 59 lets an officer re-determine within four years of the determination.

What about SIMA and surtax errors?

SIMA does not go through the ordinary adjustment. D17-2-1 says issues involving SIMA are submitted as a request for re-determination through the CARM Client Portal, and Memorandum D14-1-3 sets 90 days from the designated officer's decision, after all duties on the goods are paid. A request can raise or lower the duty, and provisional duties cannot be the subject of one. Appeals go to the Canadian International Trade Tribunal within 90 days.

Surtaxes are corrected and refunded through CAD adjustments. CBSA Customs Notice 26-23, on the United States Surtax Order (2026), says commercial goods are adjusted through the CARM Client Portal or EDI/API under D17-2-1, re-determinations can be requested under section 60 within 90 days, and the surtax itself is not appealable. Surtax charged on goods outside an order, or of non-covered origin, is refunded under section 74(1)(g). Surtax that should have been charged and was not is self-adjusted: CBSA Memorandum D16-1-1 says an importer who identifies that surtax is payable "must submit a self-adjustment". [OWNER REVIEW: does that self-adjustment run on the 90-day clock in s.32.2, which names only origin, tariff classification and value for duty, when the origin and tariff item were declared correctly? D16-1-1 sets no deadline of its own, and D17-2-1 lists separate reason codes for assessing surtax. Counsel to confirm.]

How is interest calculated?

Interest runs both ways, at different rates:

• On amounts you owe: the specified rate under section 33.4 of the Customs Act, which is the prescribed rate plus 6% a year, from the day after the amount became payable until it is paid.
• On refunds: the prescribed rate under section 80, from the 91st day after the refund application is received until the refund is granted. D17-2-1 says CARM calculates this automatically when an adjustment is not processed within 90 days.
• On an accepted voluntary disclosure: Memorandum D11-6-4 reduces specified-rate interest to the prescribed rate and waives penalties.

The six-point gap is the cost of waiting. A correction filed on day 30 rather than in month 13 is cheaper even before penalties.

What if you missed the 90 days?

Correct anyway. The obligation runs until four years after accounting, and every day adds interest. Failing to correct within 90 days is a contravention under the Administrative Monetary Penalty System. Where the correction leaves duties owing, as an underpayment does, contraventions C350 to C353 apply; where it would not change the duties, C080 to C083 (C082). Both carry a first-level penalty of CAD 500, capped at CAD 5,000 per issue or CAD 25,000 per occurrence.

D11-6-4 offers a way out. The CBSA may accept a section 32.2 adjustment filed more than 90 days after reason to believe, and within the four years, as a voluntary disclosure, unless it falls within the reassessment period of a trade compliance verification. The application is made through a case number in the CARM Client Portal with a request letter and the supporting documents. It must be complete, covering every incidence of the issue within the four-year window. What changes once a verification starts is covered in CBSA trade compliance verifications.

How do the deadlines play out on one audit?

An importer audits four years of CADs. The final audit report lands on day 0 and contains three findings. The amounts and line counts are illustrative.

• Finding A: a part entered under a tariff item at 0% belongs under an item at 6.5%. Underpayment.
• Finding B: lines of a US-made component entered at the MFN rate, although the supplier had issued a CUSMA certification of origin before import. Overpayment.
• Finding C: surtax charged on goods whose origin is not covered by the order. Overpayment.

Lines older than four years from accounting drop out on both sides: the correction obligation has ended (s.32.2(4)) and the refund is out of time (s.74(3)(b)). That is why the audit window is four years, and why a refund finding left for later loses lines every month.

How does this compare with correcting a US entry?

The two systems answer the same question with different clocks. In Canada the decisive date for an underpayment is your reason-to-believe date, and the outer limit is four years from accounting for both corrections and most refunds. In the US the date that drives most decisions is the liquidation of each entry: routes before and after liquidation differ, and underpayments CBP has not found go to a prior disclosure. What to check on each US line is in the US post-entry audit guide. The US routes are set out in how to recover overpaid import duty, and the per-entry deadlines in how long you have to fix a past entry.

If you import into both countries, run both clocks from the same audit. TariffSense audits US and Canadian entries line by line against the measures in force on each entry date, and gives each finding its direction, the reason and the corrected value, so the correction or refund is worked out before it reaches your broker. Filing stays with your broker or your own filer. The post-entry audit page shows what goes in and what comes back.

What should you do next on your own entries?

Take your latest audit findings, or your broker's accounting export for the last four years, and sort every finding into the routes in the table above. Write the reason-to-believe date and the 90th day next to each underpayment, file the refunds with their documents attached on the same day, and confirm the route and deadline for your situation with a licensed customs broker or trade counsel before filing. If you have not audited yet, start with the line-by-line CAD audit guide.