10.1.8 Completing an Excise Duty Return - Tobacco Licensee

September 2013

NOTE: This version replaces the one dated July 2003.

Disclaimer:
The information in this memorandum does not replace the law found in the Act and its regulations. It is provided for your reference. As it may not completely address your situation, you may wish to refer to the Act or its regulations, or contact any Canada Revenue Agency regional excise duty office for additional information. These offices are listed in Excise Duty Memorandum EDM1.1.2, Regional Excise Duty Offices.

General

1. Under paragraph 14(1)(d) ^{Footnote 1} , a person must apply to the CRA for a tobacco licence to be authorized to manufacture tobacco products in Canada. For more information on the obligations and entitlements of tobacco licensees, see Excise Duty Memorandum EDM7.1.1, Manufacturers of Tobacco Products.

2. Rates for excise duties are available in Excise Duty Memoranda EDM1.5.1, Rates of Excise Duty. This memorandum also includes historical rates.

3. You must only include, on the excise duty return, the information that applies to the fiscal month for which you are filing, and you must only complete the lines of the return that apply to you. Indicate NIL on the lines that do not apply to you.

Instructions for page 1

Identification of licensee

4. Pre-printed personalized returns are normally mailed to the licensees.

5. The top left portion of the return is used to identify the tobacco licensee. In this section, the licensee's legal name, trading name and mailing address are pre-printed. If you find that the identification information is incorrect, please provide the correct information on page 2 of the return.

Field 1 – Business Number

6. The business's 9-digit Business Number (BN), 2-letter (RD) program identifier and 4-digit program account number are pre-printed in field 1.

Field 2 – Period covered

7. The fiscal month covered by the return is pre-printed in field 2.

Field 3 – Due date of return

8. The due date for an excise duty return is the last day of the fiscal month following each fiscal month of a licensee. The due date of the fiscal month for which you are filing is pre-printed in field 3.

Domestic – add any missing descriptions

Line 4 – Cigarettes

9. Under the heading "Units", enter the total number of cigarettes, packaged and stamped. Calculate the amount of excise duty payable and enter the result under "Duty payable".

Line 5 – Tobacco sticks

10. Under the heading "Units", enter the total number of tobacco sticks, packaged and stamped. Calculate the amount of excise duty payable and enter the result under "Duty payable".

Line 6 – Other manufactured tobacco

11. Under the heading "Units", enter the number of packages containing 50 grams or fraction of 50 grams of other manufactured tobacco, packaged and stamped. Calculate the amount of excise duty payable and enter the result under "Duty payable".

Line 7 – Cigars

12. Under the heading "Units", enter the total number of cigars, packaged and stamped. The rate is based upon 1,000 cigar units. Calculate the amount of excise duty payable and enter the result under "Duty payable".

Lines 8 OR 9 – Additional excise duty on cigars

13. The calculation of additional duty on cigars is based either on a rate per cigar (line 8) or on a percentage rate based on the tobacco licensee's sale price (line 9). Only the greater result calculated for lines 8 and 9 should be entered on either line 8 or line 9, under "Duty payable".

14. For line 8, under the heading "Units", enter the total number of cigars that were packaged and stamped, and delivered to a purchaser, then multiply that number by the current rate per cigar.

15. For line 9, under the heading "Units", enter the total number of cigars that were packaged and stamped, and delivered to a purchaser, then determine the total sales value of the cigars delivered to all purchasers. Multiply that result by the current sale price percentage rate.

16. If the result for line 8 is greater than the result calculated on line 9, enter it under "Duty payable" on line 8. However, if the result for line 9 is greater than the result calculated on line 8, enter it under "Duty payable" on line 9. A result should only be entered on line 8 OR on line 9.

Line 10 – Raw leaf tobacco

17. Under the heading "Units", enter the total number of kilograms of raw leaf tobacco, packaged and stamped. Calculate the amount of excise duty payable and enter the result under "Duty payable".

Line 11 – Total (4 to 10)

18. Add the amounts from lines 4 to 10 under "Duty payable" and enter the total.

Duty free shops / ships' stores / customs bonded warehouses (reduced rate)

Line 12 – Cigarettes

19. Under the heading "Units", enter the total number of cigarettes, packaged and stamped, that were destined for duty free shops, for use as ships' stores, or for customs bonded warehouses. Using the reduced rate, calculate the amount of excise duty payable and enter the result under "Duty payable".

Line 13 – Tobacco sticks

20. Under the heading "Units", enter the total number of tobacco sticks, packaged and stamped, that were destined for duty free shops, for use as ships' stores, or for customs bonded warehouses. Using the reduced rate, calculate the amount of excise duty payable and enter the result under "Duty payable".

Line 14 – Other manufactured tobacco

21. Under the heading "Units", enter the total number of packages containing 50 grams or fraction of 50 grams of other manufactured tobacco, packaged and stamped, that were destined for duty free shops, for use as ships' stores, or for customs bonded warehouses. Using the reduced rate, calculate the amount of excise duty payable and enter the result under "Duty payable".

Line 15 – Total (12 to 14)

22. Add the amounts from lines 12 to 14 under "Duty payable" and enter the total.

Exports not exceeding 1.5% – Special duty

Line 16 – Cigarettes

23. Under the heading "Units", enter the number of unstamped cigarettes that were removed for export from your excise warehouse, which did not exceed 1.5% of your previous calendar year's total production of cigarettes. Calculate the amount of special duty payable and enter the result under "Duty payable".

Line 17 – Tobacco sticks

24. Under the heading "Units", enter the number of unstamped tobacco sticks that were removed for export from your excise warehouse, which did not exceed 1.5% of your previous calendar year's total production of tobacco sticks. Calculate the amount of special duty payable and enter the result under "Duty payable".

Line 18 – Other manufactured tobacco

25. Under the heading "Units", enter the number of packages containing 50 grams or fraction of 50 grams of unstamped other manufactured tobacco removed for export from your excise warehouse, which did not exceed 1.5% of your previous calendar year's total production of other manufactured tobacco. Calculate the amount of special duty payable and enter the result under "Duty payable".

Line 19 – Total (16 to 18)

26. Add the amounts from lines 16 to 18 under "Duty payable" and enter the total.

Exports exceeding 1.5% – Special duty

Line 20 – Cigarettes

27. Under the heading "Units", enter the number of cigarettes, packaged and stamped, that were exported and that exceeded 1.5% of your previous calendar year's total production of cigarettes. Calculate the amount of special duty payable and enter the result under "Duty payable".

Line 21 – Tobacco sticks

28. Under the heading "Units", enter the number of tobacco sticks, packaged and stamped, that were exported and that exceeded 1.5% of your previous calendar year's total production of tobacco sticks. Calculate the amount of special duty payable and enter the result under "Duty payable".

Line 22 – Other manufactured tobacco

29. Under the heading "Units", enter the number of packages containing 50 grams or fraction of 50 grams of other manufactured tobacco, packaged and stamped, that was exported and that exceeded 1.5% of your previous calendar year's total production of other manufactured tobacco. Calculate the amount of special duty payable and enter the result under "Duty payable".

Line 23 – Total (20 to 22)

30. Add the amounts from lines 20 to 22 under "Duty payable" and enter the total.

Authorized deduction/refund

Line 24 – Net payable

31. Add lines 11,15,19 and 23.

Line 25 – Refunds

32. As mentioned in Excise Duty Notice EDN13, Amendment to the Claiming of Deductions or Refunds, there is only one method to claim a refund or a deduction of excise duty. It is by completing and submitting Form B256, Excise Act, 2001 – Application for Refund/Deduction. For more information on refunds, see Excise Duty Memorandum EDM10.3.1, Refunds.

Line 26 – Amount due

33. Subtract line 25 from line 24.

Line 27 – Payment herewith/credit due

34. If the result on line 27 is a positive amount, circle "Payment herewith". Enclose a cheque or money order, in Canadian dollars, payable to the Receiver General.

35. If the result on line 27 is a negative amount, circle "Credit due".

Client contact name/telephone number

36. Enter the complete name and telephone number of a person who may be contacted concerning the excise duty return.

Certification

37. An authorized representative must print their name and title, sign and date the return, and provide a current telephone number.

Instructions for page 2

Change of name and/or address

Corrected or new name of licensee

38. Complete only if there is an error in the name or if the licensee changed their name since the last return was filed.

New mailing address

39. Complete only if there is a new mailing address since the last return was filed.

New address for books and records

40. Complete only if the address at which the books and records are located has changed since the last return was filed

New contact name and title

41. Complete only if there is a new contact person since the last return was filed. The title of the new contact person must be provided.

New telephone number

42. Complete only if the telephone number has changed since the last return was filed.

Language of future correspondence

43. Complete if the language of correspondence should be changed.

Effective date of above change(s)

44. Enter the effective date of the changes above.

Business closed as of

45. Complete if the business closed since the last return was filed. Dates should be entered in the order year/month/day. The reason why the business closed must be provided.

Additional material required

Remittance vouchers, return envelope and remittance envelope

46. Check the appropriate box if you require any additional remittance vouchers, pre-addressed return envelopes or remittance envelopes.

Instructions for page 3

47. Inventories are to be reported based on the physical possession of partially manufactured and raw leaf tobacco as opposed to ownership of the tobacco. There may be situations where a tobacco licensee owns the tobacco, but does not have it in their possession, or vice versa. The licensee's books and records should reflect these situations for verification during audit and compliance reviews.

Business name

48. The business name should be pre-printed in the top left portion.

Field 1 – Business Number

49. The business's 9-digit Business Number (BN), 2-letter (RD) program identifier and 4-digit program account number should be pre-printed.

Field 2 – Period covered

50. The reporting period covered by the return should be pre-printed.

TOTAL PRODUCTION – cigarettes, tobacco sticks, manufactured tobacco (other than cigarettes and tobacco sticks), cigars, packaged raw leaf

51. For each column, enter the total quantity, in units or kilograms, of tobacco products produced in each category.

PACKAGED, NOT STAMPED – To excise warehouse

52. For each column, enter the total quantity, in units, of packaged, not stamped manufactured tobacco and cigars placed into an excise warehouse. Packaged raw leaf tobacco is excluded.

OPENING BALANCE – partially manufactured tobacco, raw leaf tobacco – line A)

53. The opening balance of the return must equal the last fiscal month's closing balance. Enter amounts for "Opening balance" under the applicable columns on line A).

ADDITIONS TO INVENTORY

Total production

54. Enter the number of kilograms of partially manufactured tobacco produced. Raw leaf tobacco is excluded.

Domestic receipts

55. Enter, in the appropriate column, the amount in kilograms of partially manufactured tobacco and raw leaf tobacco received from all domestic sources.

Imported receipts

56. Enter, in the appropriate column, the amount in kilograms of imported partially manufactured tobacco and raw leaf tobacco.

TOTAL ADDITIONS – line B)

57. Add the quantities in each column (i.e., under "Additions to inventory") and enter the sums on line B).

REDUCTIONS TO INVENTORY

Taken for further manufacture

58. Enter the number of kilograms of partially manufactured and raw leaf tobacco taken for further manufacture.

Destroyed

59. Enter the number of kilograms of partially manufactured and raw leaf tobacco destroyed.

Domestic deliveries

60. Enter the number of kilograms of partially manufactured and raw leaf tobacco removed for domestic deliveries.

To excise warehouse

61. DO NOT USE THIS LINE.

Exported

62. Enter the number of kilograms of partially manufactured tobacco and raw leaf tobacco exported.

TOTAL REDUCTIONS – line C)

63. Add the quantities in each column amounts (i.e., under "Reductions to inventory") and enter the sums on line C).

INVENTORY ADJUSTMENTS – line D)

64. Adjustments may be necessary to balance the physical inventory with the book inventory. The closing or book inventory must agree with the physical inventory for the fiscal month. All adjusting entries are subject to audit and must be entered as "Inventory adjustments" on line D).

CLOSING BALANCE – line E)

65. The closing balance is the sum of lines A) and B), minus line C), plus or minus any adjustments on line D: (A+B) - C±D. This closing balance will become the opening balance for the following fiscal month.

Where to file your return

66. You must file your excise duty return by mailing it to the following address:

Canada Revenue Agency
Summerside Tax Centre
275 Pope Road, Suite 101
Summerside, PE C1N 6E7

Payments

67. The CRA must receive your payments of excise duty electronically, by regular mail or through an authorized financial institution with a personalized pre‑printed remittance voucher on or before the due date of the return.

68. Cheques and money orders must be made payable to the Receiver General. Please indicate your Business Number and program account number on the back of your cheque or money order.

Small amounts owing

69. The CRA does not charge or refund a balance of $2 or less. However, such an amount may be deducted from a balance owing by the licensee.

Large payment

70. Payments of $50,000 or more must be made at an authorized financial institution in Canada.

71. Additional information with respect to the filing of monthly returns, remitting excise duty, and paying the correct amount of excise duty is provided in Excise Duty Memorandum EDM10.1.1, Returns and Payments.

Interest charges

72. Failure to remit payments to an authorized financial institution or the CRA by the due date of a return will result in interest charges.

Retention of information

73. Under section 206, a copy of the return should be retained for your records, as the return and any other information used to prepare it are subject to audit and must be retained for verification purposes.

74. Additional information on the requirement to maintain books and records is available in Excise Duty Memorandum EDM9.1.1, General Requirements for Books and Records.

Footnotes

Footnote 1

All legislative references are to the Excise Act, 2001.

Return to footnote 1 referrer

Date modified:

2013-09-13