Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 20th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 179027
Dear [Client]:
Subject: EXCISE INTERPRETATION
Stamping of Tobacco Products for Importation by a Prescribed Person holding no other licences and for Sale to Canadian Duty Free Shops
Thank you for your [correspondence] of [mm/dd/yyyy], concerning the federal stamping requirements for tobacco products imported by a prescribed person and intended for sale to duty free shops in Canada.
All legislative references are to the Excise Act, 2001 (Act) and its regulations, unless otherwise specified.
We understand […][ACo] is a prescribed person for purposes of subsection 25.1(1) of the Act. [ACo] does not hold any licences issued under the Act (for example, an excise warehouse licence issued under subsection 19(1) or a duty free shop licence issued under section 22) or licences issued under the Customs Act or Customs Tariff. As per your [mm/dd/yyyy] telephone conversation with rulings officer David May, [ACo] intends to import […] cigarettes […] and sell them to duty free shops located in […][Canada].
INTERPRETATION REQUESTED
You would like to know the federal stamping requirements for imported […] cigarettes intended for sale, in Canada, to Canadian duty free shop operators. In your [correspondence], you provided a list of duty free shops you intend to sell imported cigarettes to, and you asked about the purpose of “Peach Tear Tape.”
INTERPRETATION GIVEN
Subsection 32(1) of the Act prohibits the sale, offering for sale and possession of tobacco products that are not stamped (Footnote 1) . Subsections 32(2) and 32(3) provide exceptions to this prohibition that apply in specific circumstances.
There are no exceptions to the prohibition in subsection 32(1) that allow [ACo] to sell, offer for sale, or possess unstamped tobacco products. Therefore, […] cigarettes imported by [ACo] must be stamped prior to importation or be placed in a sufferance warehouse upon importation for the purpose of being stamped.
[…]
Please note that if the cigarettes were imported by a Duty Free Shop (DFS) operator, who also has a valid Duty Free Shop licence issued under the Excise Act, 2001 (Act), or imported by an excise warehouse licensee or customs bonded warehouse licensee, the cigarettes could be imported non-duty-paid and not stamped. The DFS operator would be required to report and remit on Form B261 a special duty imposed on the cigarettes. Containers of unstamped, imported, manufactured tobacco delivered to a DFS for sale in accordance with the Customs Act must contain tobacco markings and other prescribed information.
There are provisions that allow the duty free shop licensee to apply for a refund of the special duty paid under section 53 on limited quantities of unstamped cigarettes when they are sold to an individual who is not a resident of Canada and who is departing Canada.
Before implementation of the excise stamping regime on September 1, 2010, and subject to its transition periods, tear tape was used to indicate cigarettes’ duty paid status. Peach tear tape indicated the tobacco was black stock. (Footnote 2) The peach excise stamp replaced the peach tear tape and serves to indicate that the federal excise duty has been paid. Peach tear tape no longer serves a legal purpose, but is sometimes used for packaging purposes.
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the interpretation(s) given in this letter, including any additional information, is not a ruling and does not bind the Canada Revenue Agency (CRA) with respect to a particular situation. Future changes or amendments to the Act, if enacted, or to the CRA’s interpretative policy could affect the interpretation(s) or the additional information provided herein.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-3282.
Yours truly,
Chris White
Excise Duty Operations - Tobacco Unit
Excise Duties and Taxes Division
Excise and GST/HST Rulings Directorate
FOOTNOTES
1 According to section 2 of the Act, “stamped”, in respect of a tobacco product, means that an excise stamp, and all prescribed information in a prescribed format, are stamped, impressed, printed or marked on, indented into or affixed to the product or its container in the prescribed manner to indicate that duty, other than special duty, has been paid on the product.
2 According to section 2 of the Act, “black stock,” in respect of manufactured tobacco, means that the tobacco is stamped but not marked in accordance with any statute of a province to indicate that it is intended for retail sale in a particular province or in particular provinces.
Email this Content