Dear XXXXX
Thank you for your letter of XXXXX. In that letter, you requested that the XXXXX brand of cigarettes be listed as a prescribed brand for the purposes of the export tax exemptions under the Excise Tax Act, and the exemption from the marking requirements under the Excise Act.
As you are aware, the relief you are requesting for XXXXX is regulated, and subject to approval by the Minister of National Revenue and Governor General in Council.
I understand from the information that you provided that XXXXX has not previously produced XXXXX in Canada, and that it is not commonly sold in Canada. Furthermore, it is not your intention to sell this brand in the Canadian market.
You are correct that a brand will not be treated as a prescribed brand until specifically identified in the appropriate schedules of the Excise Tax Act and the Excise Act. Requests for inclusion in Schedule I of the Export Tax Exemption Regulations (Tobacco Products) (brands exempted from export tax), and Schedule II of the Tobacco Regulations (brands exempted from tobacco markings) are not administratively pre-approved.
Therefore, while XXXXX has been recommended for inclusion to the above schedules, its production under the prescribed brand provisions can begin only after it is added to these schedules. It could, however, be produced in accordance with the regular provisions of the Excise Act and Excise Tax Act.
Date of Inclusion in Schedules
We have been advised that the earliest time the necessary regulatory changes can be made will be July 1, 2003, which is when the Excise Act 2001 will come into force. Therefore, the regulations and law set out in the Excise Act 2001, rather than the Excise Act or Excise Act will apply to the production, marking and export of the XXXXX brand.
The Excise Act 2001 provides exemptions for prescribed brands from special duty under subsection 58(1), and an exemption for prescribed brands from marking requirements under subsection 38(4). Prescribed brands must be listed in the schedule to the Regulations Exempting Certain Tobacco Products from Special Duty and the schedule to Regulations Respecting the Stamping and Marking of Tobacco Products.
Should XXXXX be offered for sale in the Canadian duty-paid market at any time in the future, except as provided for in subsection 58(1), the exemptions from special duty and tobacco markings requirements 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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