Dear XXXXX
This letter is further to our previous correspondence to you of XXXXX, concerning your request to have the XXXXX brand XXXXX of cigarettes prescribed as a tobacco brand for the purposes of the export tax and tobacco marking provisions of the Excise Act and Excise Tax Act.
In our letter of XXXXX, we advised that the XXXXX would be recommended for approval as a prescribed tobacco brand. The letter stated that XXXXX would be eligible for exemption from excise tax and tobacco marking provisions that normally apply to exported tobacco products only after amendments to the appropriate regulations are approved. We also advised you the required regulatory changes would be effective on July 1, 2003, at the earliest, when Excise Act, 2001 comes into force. At that time we expect new prescribed tobacco brands will be included in the schedules to the Regulations Exempting Certain Tobacco Products from Special Duty and the Regulations Respecting the Stamping and Marking of Tobacco Products.
However, upon further consideration of the delay in obtaining regulatory approval for new tobacco brands, we are prepared to immediately permit XXXXX to be treated as eligible for exemption from the normal excise tax and marking requirements. This permission is based upon the understanding set out in our letter of XXXXX, that XXXXX has not previously been produced in Canada and will not be sold in this country.
Therefore, pending the approval of the above-noted regulations under the Excise Act, 2001, XXXXX will be considered on an administrative basis, as a prescribed brand. Prescribed brands are exempt, under the provisions of subsection 23.3(1) of the current Excise Tax Act, from the excise tax imposed under section 23.13 of that Act. XXXXX will also be administratively treated as qualifying under subsection 202(4) of the Excise Act for exemption from the marking requirements otherwise imposed under subsection 202(2) of that Act.
We will not grant any further administrative "pre-approvals" of prescribed tobacco brands and prescribed cigarette formulas after March 31, 2003. If you anticipate a need to have additional tobacco brands or cigarette formulas recommended for inclusion in the lists of prescribed tobacco brands or prescribed cigarettes, please advise this office as soon as possible so that the necessary changes can be made to the proposed new regulations in time for the implementation of the Excise Act, 2001.
Should XXXXX be offered for sale in the Canadian duty-paid market at any time in the future, except as provided for in subsection 23.3(1) of the Excise Tax Act and subsection 202(4) of the current Excise Act, or under subsections 38(3) and 58(1) of the Excise Act, 2001 once that Act is implemented, the exemptions from the tobacco marking requirements and the payment of excise tax or special duty would no longer apply.
Should you require any further information, please contact me at (613) 954-4208 or Richard Crompton at (613) 957-4156.
Sincerely,
Preston Gallant, CGA
Manager
Excise Duty Operations
Excise Duties and Taxes Div.
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