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.
[Addressee]
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 20th floor
320 Queen Street
Ottawa ON K1A 0L5
Case Number: 121065
July 27, 2010
Dear [Client]:
Subject:
EXCISE INTERPRETATION
Application of Excise Act, 2001 to Trans-loading Cigarettes in a Sufferance Warehouse
Thank you for your emails concerning the application of the Excise Act, 2001 to trans-loading cigarettes in a sufferance warehouse. We apologize for the delay in responding to your enquiries.
All legislative references are to the Excise Act, 2001 and the regulations therein, unless otherwise specified.
We understand that [...] [the Company] is a "sufferance warehouse licensee" [that] operates a "sufferance warehouse", as those terms are defined in section 2 of the Excise Act, 2001. [The Company] has been approached by a cigarette importer who would like [the Company] to perform trans-loading services in its sufferance warehouse. The services would include unpacking imported cigarettes from shipping containers, storing the cigarettes for a short period of time, and repacking the cigarettes into other shipping containers for export. The imported cigarettes are not stamped in accordance with the Excise Act, 2001 and are not intended for entry into the duty paid market in Canada.
Interpretation Requested
You would like to know whether [the Company] may trans-load cigarettes in its sufferance warehouse in these circumstances.
Interpretation Given
Although most persons are prohibited from possessing tobacco products in Canada that have not been properly packaged and stamped for excise duty purposes, the Excise Act, 2001 permits a sufferance warehouse licensee to possess such products in its sufferance warehouse. Further, the Excise Act, 2001 does not prohibit the trans-loading of tobacco products (i.e., unpacking imported tobacco products from a shipping container, storing the tobacco products for a brief period of time, and repacking the tobacco products into other shipping containers for export) by a sufferance warehouse licensee in its sufferance warehouse.
We cannot comment on whether the trans-loading of tobacco products by a sufferance warehouse licensee in its sufferance warehouse is specifically permitted or prohibited under customs legislation, as the administration of customs legislation falls within the purview of the Canada Border Services Agency (CBSA). We understand that you have already been discussing this matter with the CBSA.
The Excise Act, 2001 imposes a number of restrictions and controls on imported tobacco products, and it imposes excise duty on most importations of tobacco products into Canada. Consequently, if you are considering handling imported tobacco products in circumstances other than those described above, we recommend that you contact us for additional information.
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. We have enclosed GST/HST Memorandum should you wish to obtain a ruling on this matter. 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
Excise Duties and Taxes Division
Excise and GST/HST Rulings Directorate
Enc.: GST/HST Memorandum 1.4, Goods and Services Tax Rulings
UNCLASSIFIED
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