Changes to Excise Duty Rates on Manufactured Tobacco
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EDN33 - Changes to Excise Duty Rates on Manufactured Tobacco
March 2013
The information in this notice is for reference purposes only and does not replace the Act or its regulations. Should there be any discrepancy between the information in this notice and that contained in the Act or its regulations, the legislative provisions apply. As the information in this publication may not completely address your particular situation, you may wish to refer to the Act or appropriate regulation, 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.
On March 21, 2013, the Minister of Finance tabled a Notice of Ways and Means Motion, which proposes amendments to the Excise Act, 2001 to increase the rates of excise duty on manufactured tobacco other than cigarettes and tobacco sticks. Certain fines and penalties have also been changed. These rates take effect midnight March 21, 2013. The new rates are outlined in the following table.
| Previous rate | New rate | |
|---|---|---|
| Excise duty | ||
| Manufactured tobacco (Canadian or imported) for the regular domestic market, per 50 grams or fraction thereof. | $2.8925 | $5.3125 |
| Blackstock tobacco manufactured in Canada for delivery by the manufacturer to foreign or Canadian duty free shops, to customs bonded warehouses, or for use as foreign or Canadian ships stores, per 50 grams or fraction thereof. | $2.49915 | $4.685938 |
| Special duty | ||
| Canadian manufactured unstamped tobacco for delivery to export markets, per kilogram | $50.00 | $93.75 |
| Canadian manufactured stamped tobacco for delivery to export markets, per 50 grams or fraction thereof. | $2.3001 | $5.98275 |
| Imported manufactured tobacco delivered to a Canadian duty free shop, per 50 grams or fraction thereof. | $2.50 | $4.6875 |
| Manufactured tobacco imported as "traveller’s tobacco", per 50 grams or fraction thereof. | $2.50 | $4.6875 |
Contraventions
The minimum fine for a person convicted of the unlawful possession or sale of unstamped tobacco products is increased to the greater of $0.213 multiplied by the number of grams of manufactured tobacco other than cigarettes or tobacco sticks and $1,000 in the case of an indictable offence and $500 in the case of an offence punishable on summary conviction. The maximum fine is the greater of $0.319 multiplied by the number of grams of manufactured tobacco other than cigarettes or tobacco sticks and $2,000 in the case of an indictable offence and $1,000 in the case of an offence punishable on summary conviction.
The penalty for exceeding the threshold amount of manufactured tobacco other than cigarettes or tobacco sticks exported from an excise warehouse is $451.81 per kilogram.
Effective dates
The excise and special duty rates detailed above apply effective midnight, March, 21, 2013. The CRA will collect the increased duty on a voluntary basis until such time as the amendments become law (i.e., Royal Assent). Importers and licensees that do not remit the duty in accordance with the new rates as of the date cited above will be required to pay interest on unpaid amounts once Royal Assent is received.
Changes to the above contravention provisions will come into force on the date of Royal Assent of the enabling legislation.
All technical publications related to the Excise Act, 2001 and its regulations are available on the CRA Web site at www.cra.gc.ca/exciseduty, under the title "Excise Act, 2001 – Technical Information".
- Date modified:
- 2013-03-21