Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 11th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 190794
Business Number: […]
Dear [Client]:
Subject: EXCISE DUTY INTERPRETATION
TOBACCO MARKING FOR CIGARS DESTINED FOR EXPORT
Thank you for your [correspondence] of [mm/dd/yyyy] to […], concerning questions related to tobacco markings for cigars destined for export.
All legislative references contained in this letter are to the Excise Act, 2001 (Act) and the Stamping and Marking of Tobacco Products Regulations (Regulations), unless otherwise noted and relate to the delivery of Canadian manufactured cigars destined for export and not for delivery to a duty free shop or as ships` stores.
Enclosed for your reference is a copy of the Regulations.
INTERPRETATION REQUESTED
[…][You submitted] 5 questions relating to the marking of cigars destined for export and not for delivery to a duty free shop or as ships’ stores.
INTERPRETATION GIVEN
Section 37 and subsection 38(1) of the Act requires that packaged unstamped Canadian manufactured cigars be immediately placed in the tobacco licensee’s excise warehouse, and its containers display the appropriate tobacco marking and prescribed information. Paragraph 50(7)(a) of the Act then allows for the cigars to be removed from the excise warehouse for export.
With respect to the prescribed information and marking requirements for containers of cigars destined for export, I also refer you to sections 3, 3.3 and 3.4 of the Regulations.
These sections relate to the prescribed information required to be printed or affixed to containers (packages, cartons, cases) of cigars. Prescribed information is in addition to tobacco markings.
The following are responses to your questions:
Question 1. The Regulation describes for cases a text font of Helvetica 36 point and an actual size of the marking of 7cm x 19cm. For containers, the regulation lists a text font size of Helvetica 8 point, however the regulation does not indicate an actual size. Therefore, please confirm that […][a tobacco licensee] may use the smallest actual size possible, as long as all the words are legible and is done in Helvetica 8 point.
The term ‘Container’ is defined in section 2 of the Act as, in respect of a tobacco product, a wrapper, package, carton, box, crate or other container that contains the tobacco product.
The term ‘Case’ is defined in section 1 of the Regulations and means a corrugated cardboard box in which packages or cartons of tobacco products are packed, primarily for the purpose of transport and protection against damage.
The tobacco marking is required to appear on each package, carton, and case and must meet the minimum specifications as set out in Schedule 7. The text font size specifications for the tobacco markings applicable to packages and cartons may be modified, but may not be smaller than Helvetica, 8 point.
Question 2. With regards to this regulation, […][does the] “Not for Sale in Canada” marking regulation […][apply] to the retail size package of 20 per pack, in addition to the carton which contains 10 packages of 20 filtered cigars each and also applies to the master corrugated cardboard case which contains either 30 or 50 cartons.
Paragraph 6(1)(a) of the Regulations requires that the container of Canadian manufactured cigars display the tobacco marking as set out in Schedule 7 to the Regulations. For purposes of Schedule 7, the bilingual tobacco marking for containers of cigars manufactured in Canada is as follows:
NOT FOR SALE
VENTE INTERDITE
IN/AU CANADA
Tobacco markings are to be printed on or affixed to "containers" of manufactured tobacco and cigars manufactured in Canada. The text font size specification for the markings applicable to packages and cartons may be modified, but may not be smaller than Helvetica, 8 point. The Light Blue background colour applies only to the tobacco marking printed on or affixed to cartons.
The specifications that apply to markings to be affixed to packages and to cartons are:
- Text Colour: Process Black 100%
- Text Font: Helvetica, minimum 8 point
- Background Colour for cartons: Light Blue
The specifications that apply to markings to be affixed to cases are:
- Text Colour: Process Black 100%
- Text Font: Helvetica, minimum 36 point font
- Size: 7cm x 19 cm
Please note, pursuant to subsection 6(2) of the Regulations, the required tobacco markings for containers of cigars manufactured in Canada and intended for delivery to a duty free shop or as ships’ stores is the marking set out in Schedule 8 to the Regulations.
Question 3. With regards to the marking that is to appear on individual packs of 20 filtered cigars which is “Not for Sale in Canada”, in order to comply with the regulations, […][is a tobacco licensee] permitted to apply either by hand or machine a self-adhesive sticker to the outside of the package on top of the overwrap/shrink wrap, rather than printing the marking directly onto the pack/container itself?
[…][Tobacco licensees] are permitted to apply either by hand or by machine a self-adhesive sticker of the required tobacco marking, set out in Schedule 7 to the Regulations, to the package of cigars as long as the tobacco marking meets the criteria set out in subsection 6(3) of the Regulations.
Subsection 6(3) of the Regulations requires that the tobacco marking set out in Schedule 7 be printed on or affixed to the container in a conspicuous manner and in accordance with that Schedule’s specifications. A tobacco marking affixed to the outside of the package, on top of the overwrap/shrink wrap does not comply with the requirements set out in the Regulations.
Question 4. With regards to the marking that appears on individual cartons (10 packs of 20 filtered cigars each) “Not For Sale in Canada”, in order to comply with the regulations, […][can a tobacco licensee] apply either by hand or by machine a self-adhesive sticker directly to the outside of the carton?
[Tobacco licensees] are permitted to apply either by hand or by machine a self-adhesive sticker of the required tobacco marking, set out in Schedule 7 to the Regulations, to the individual carton as long as the tobacco marking meets the criteria set out in subsection 6(3) of the Regulations. The tobacco marking is required to be printed on or affixed to each package, carton, and case. The marking must be applied or affixed directly to the carton and not to any outer wrapper.
Question 5. With regard to the marking that appears on master cases containing 30-50 cartons of filtered cigars, “Not For Sale in Canada”, in order to comply with the regulations, […][can a tobacco licensee] apply either by hand or machine, a self-adhesive sticker to the master corrugated cardboard case?
[Tobacco licensees] are permitted to apply either by hand or by machine a self-adhesive sticker of the required tobacco marking, set out in Schedule 7 to the Regulations, to the individual master case as long as the tobacco marking meets the criteria set out in subsection 6(3) of the Regulations. The tobacco marking is required to be printed on or affixed to each package, carton, and case. The marking must be applied or affixed directly to the master case (corrugated cardboard case) and not to any outer wrapper.
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the interpretation(s) given in this letter, including any additional information, is not a ruling and does not bind the Canada Revenue Agency (CRA) with respect to a particular situation. Future changes to the Act, regulations, or the CRA’s interpretative policy could affect the interpretation(s) or the additional information provided herein.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-670-7356.
Yours truly,
Faye Chen
Rulings Officer
Tobacco Operations Unit
Excise Duties & Taxes Division
Excise and GST/HST Rulings Directorate
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