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, 11th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 185869
Dear [Client]:
Subject: EXCISE INTERPRETATION
[Excise Stamp - Tobacco Products]
Thank you for your […][communication] regarding the application of the Excise Act, 2001 (Act) with the stamping requirements on imported […][packages of tobacco product] destined for the duty paid market in Canada.
All legislative references are to the Excise Act, 2001 and the regulations therein, unless otherwise specified.
We understand that you import [a] […][tobacco product] for sale in the Canadian duty-paid market. The imported […][packages of tobacco product] all bear the “Duty Paid Canada” excise stamp that have either the […][Jurisdiction A name and colour identifier], or the […][Jurisdiction B name and colour identifier].
INTERPRETATION REQUESTED
Does the Act allow [packages of tobacco product] to be imported into Canada onto which both a […][Jurisdiction B name and colour identifier] and a […][Jurisdiction A name and colour identifier] excise stamp are affixed? (With the goal to be able to sell […][tobacco product] in […][Jurisdiction A] and also in […][Jurisdiction B].)
Does the Act allow a […][Jurisdiction A name and colour identifier] excise stamp to be affixed (in Canada) to a […][package of tobacco product] that was previously imported as a stamped […][package of tobacco product] with a […][Jurisdiction B name and colour identifier] excise stamp affixed?
INTERPRETATION GIVEN
Based on the information provided, we confirm that the Act does not allow excise stamps of more than one jurisdiction on packages of tobacco products. A […][package of tobacco product] cannot be imported with [both a] [Jurisdiction B name and colour identifier] stamp and [a] [Jurisdiction A name and colour identifier] stamp. A second jurisdiction stamp cannot be applied to an imported [package of tobacco product].
The CRA currently allows the application of two stamps on a tobacco product representing the same jurisdiction to make up its denomination. For example, tobacco stamps are available in 50gm increments up to 250gms and then one stamp for 400gms to reflect general industry packaging amounts. Consequently, if a tobacco product is packaged in 300gm packages we have allowed a prescribed person to apply two stamps to indicate the 300gm amount.
This practice is acceptable and permissible within the provisions of the Act and its Regulations as it is an indication only that the federal duty has been paid. However, the placement of two stamps, one […][bearing the Jurisdiction B name and colour identifier] and one […][bearing the Jurisdiction A name and colour identifier], on [a package of tobacco product] would create confusion and would not respect the purpose of the stamp regime, nor meet the requirements of the Act and its Regulations.
A stamp affixed to a package must be placed in a manner that seals the package, and [the stamp must] remain affixed to the package after the package is opened and in a manner that does not interfere with the stamp’s security features. Therefore, affixing a stamp or removing [a] [Jurisdiction B] stamp and applying [a] [Jurisdiction A] stamp ([or] vice versa) on a [package of tobacco product] that was previously imported would contravene the Act and its Regulations and be subject to the applicable penalties.
Pursuant to section 35 of the Act, imported tobacco products, before they are released under the Customs Act for entry into the duty-paid market, must be packaged in a package that has printed on it prescribed information and be stamped. The exception to this requirement is when a tobacco licensee imports manufactured tobacco or cigars they manufactured in Canada for re-work or destruction.
A stamp may only be applied to a tobacco product under strict circumstances. Upon importation of the product, section 27 allows stamping by the importer or owner of the tobacco product in a sufferance warehouse before its release from Customs. In Canada, only a tobacco licensee may package and stamp a tobacco product they manufactured in Canada.
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 to the Act, regulations, or 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 613-670-7359.
Yours truly,
Matthieu Emery, CPA, CGA
Excise Duty Operations - Tobacco Unit
Excise Duties and Taxes Division
Excise and GST/HST Rulings Directorate
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