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, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 150564
June 12, 2013
Dear [Client]:
Subject: EXCISE INTERPRETATION
Stamping and Marking Requirements to Import Tobacco Twists to Clients in Canada
Thank you for your [correspondence] of January 24, 2013 concerning the application of the Excise Act, 2001 to importing tobacco twists to clients in Canada from the United States.
All legislative references are to the Excise Act, 2001 (The Act) and the regulations therein, unless otherwise specified.
We understand [...][the Company] [...]. [The Company] is a prescribed person per The Act for the purposes of purchasing, possessing and applying excise stamps on tobacco products. [...]. Tobacco "twists", according to information provided, are braided tobacco leaves which are dark air and/or dark fire cured. Tobacco twists are individually packaged and can be sold individually or in a box of [#].
Interpretation Requested
You would like to know the tobacco classification, excise duty rate as well as stamping and marking requirements for tobacco twists which are to be sold in Canada.
Interpretation Given
Based on the information provided, tobacco "twists" should be classified as manufactured tobacco. The Act defines manufactured tobacco to mean every article other than a cigar or packaged raw leaf tobacco that is manufactured in whole or part from raw leaf tobacco from any process.
The rate of duty for manufactured tobacco, as found in Schedule 1 of The Act, is $2.8925 per gram or fraction of 50 grams contained in any package.
When tobacco twist are imported but before they can be released into the duty paid market, The Act states they must be packaged in a package with prescribed information on it and be stamped.
[The Company], as a prescribed person under The Act, will be required to order from the Excise Stamp Order Desk excise stamps for manufactured tobacco to be affixed to the tobacco twist. The Stamping and Marking Regulations require an excise stamp to be affixed to the package in a conspicuous space, in a manner that seals the package and will remain affixed to the package after the package is open. The excise stamp must also be affixed in a manner that does not interfere with the stamp's security features and that does not obstruct any information required by or under an Act of Parliament. The Excise Stamp Order Desk will require an updated forecast to determine whether an adjustment to the amount of security is required.
A package for a tobacco product is defined by Excise Act, 2001 to be a prescribed package. The Stamping and Marking Regulations defines a prescribed package for a tobacco product to be when it is packaged in the smallest package, including any outer wrapping that is customarily displayed to the customer, in which it normally offered for sale to the general public. [...], tobacco twists may be marketed either as a single twist or in a box of [#]. If marketed as a single twist then the prescribed package as defined by the Stamping and Marking Regulations of Excise Act, 2001 would be the package containing the single twist. If marketed in the box of [#], the box would be the prescribed package as defined by the Regulations.
In the case of an imported tobacco product, the prescribed information required on each package is;
a) the name and address of the manufacturer who packaged the tobacco product;
b) if the tobacco product is imported by a tobacco licensee, the licensee's name and address or tobacco licence number; or
c) if the tobacco product was imported by a person other than a tobacco licensee, the person's name and address.
The Regulations also prescribe information for cases of manufactured tobacco. If, as in this situation, cases are packed with packages, the prescribed information for the case is the number of packages in the case and the weight of the tobacco product in each package.
The foregoing comments represent our general views with respect to the subject matter of your request. These comments are not rulings and, in accordance with the guidelines set out in GST/HST Memorandum 1.4, Goods and Services Tax Rulings, do not bind the Canada Revenue Agency with respect to a particular situation. Future changes to the Excise Act, 2001, regulations, or our interpretative policy could affect this interpretation.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-941-2348.
Yours truly,
David May
Excise Duty Operations - Tobacco Unit
Excise Duties & Taxes Division
Excise and GST/HST Rulings Directorate
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