Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.
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January 10, 2005
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Dear XXXXX:
Thank you for your letter XXXXX concerning the application of excise duties to the export of cigarettes to XXXXX. I apologize for the delay in responding.
The following interpretation is limited in its application by the completeness and accuracy of the information on which it is based. All legislative references contained in this letter are to the Excise Act, 2001, unless otherwise noted.
The facts, as I understand them, are that the member on whose behalf you are enquiring is contemplating purchasing cigarettes from a manufacturer XXXXX and transport the cigarettes to a warehouse XXXXX before being sold to another company who would then export the cigarettes.
Persons without a tobacco licence can export, but the exports must be stamped and domestic duty paid. In addition, special duty will apply per paragraph 56(1)(b) of the Excise Act, 2001 (the Act) payable by the exporter per paragraph 56(2)(a). The exporter will also have to file a return per section 161. No refund will be available to the exporter, as section 180 does not allow refunds for tobacco products that have been entered into the domestic duty paid market and then exported.
"Stamping" is defined in section 2 of the Act to mean that all prescribed information in a prescribed format is, in the prescribed manner, stamped, impressed, printed or marked on, indented into or affixed to the product or its container to indicate that duty, other than special duty, has been paid on the product.
Tobacco licensees must enter tobacco that is not stamped into their (own) excise warehouse per s. 37. Manufactured tobacco that is not entered into an excise warehouse must be stamped and therefore have domestic duty paid. Entry into an excise warehouse relieves the (domestic) duty imposed by subsection 42(1).
Removals from an excise warehouse for export by the licensee who manufactured the tobacco are allowed by paragraph 50(4)(a), or paragraph 50(8) in the case of prescribed brands. So only tobacco licensees can export unstamped manufactured tobacco, and it must be manufactured tobacco that they themselves have manufactured.
Under paragraph 56(1)(b) there is a special duty that applies to manufactured tobacco that is exported by someone other than the manufacturer, or by a manufacturer who exports more than 1.5 percent of their previous year's production of manufactured tobacco (other than foreign brand tobacco).
Rates
The rate of special duty currently set out for cigarettes in section 4 of Schedule 3 to the Excise Act, 2001 is $0.095724 per cigarette.
The rate of duty for cigarettes currently set out in section 1 of Schedule 1 to the Excise Act, 2001 is $0.396255 for each five cigarettes or fraction of five cigarettes contained in any package.
Should you require further information or have any questions with respect to this letter, please do not hesitate to contact me at (613) 954-5894 or Richard Crompton at (613) 957-4156.
Mark Hartigan
Acting Manager
Excise Duties and Taxes Division
Excise and GST/HST Rulings Directorate
2005/03/23 — RITS 59195 — Form B254: ATSC and GST/HST Refunds XXXXX
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