Dear XXXXX,
Thank you for your facsimile XXXXX concerning the production and export of XXXXX as a prescribed tobacco brand.
I understand from your facsimile that XXXXX has developed XXXXX specifically for the American market, and that it is not sold in Canada. Furthermore, it is not your intention to ever sell XXXXX in the Canadian market. The product you plan to produce is fine cut tobacco, sold in units of XXXXX grams in a poly pouch. Master cases contain XXXXX units and weigh XXXXX kilograms.
We agree to recommend XXXXX for the purposes of the exemption from the export tax and marking provisions. In this regard, we will recommend that the Governor General in Council approve XXXXX as a prescribed brand for the purposes of the proposed Regulations Relieving Special Duty on Certain Tobacco Products and of the proposed Stamping and Marking of Tobacco Products Regulations. Both of these regulations will be proposed under provisions of the Excise Act, 2001, which will come into force on July 1, 2003.
As a transitional measure pending the implementation of the new Act, we are prepared to allow XXXXX to be treated as "prescribed tobacco brands" for the purposes of exemption from the current excise tax and marking requirements that would normally be applicable to exports of tobacco products made in Canada.
Therefore, pending the approval of the above-noted regulations under the Excise Act, 2001, XXXXX will be regarded, on an administrative basis, as qualifying under section 23.3 of the current Excise Tax Act for exemption from the excise tax otherwise imposed under section 23.13 of that Act, on the understanding that all XXXXX production will be exported from Canada. XXXXX will also be treated, on an administrative basis, as qualifying under subsection 202(4) of the Excise Act for exemption from the marking requirements otherwise imposed under subsection 202(2) of the Act.
The CCRA will not grant any further administrative "pre-approvals" of prescribed tobacco brands and prescribed cigarette formulas for which requests are submitted for approval after March 31, 2003. Any tobacco brands submitted for approval after that date will have to be approved by the Governor General in Council before being eligible for relief from the special duty and the marking provisions of Excise Act, 2001.
Should any prescribed brand - whether included on the prescribed brand list or "pre-approved" - be offered for sale in the Canadian duty-paid market at any time, 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. Please note that these conditions apply to the brand extensions regardless of who makes them available for sale in the Canadian duty paid market.
We are requesting all manufacturers to submit samples of new brands and brand extensions to the CCRA's Laboratory and Scientific Services for testing. Samples should be submitted when the tobacco product is first manufactured, and if there is a change in formulation.
Should you require any further information, please contact me at (613) 957-8642 or Richard Crompton at (613) 957-4156.
Sincerely,
Ron Hagmann, CGA
Manager
Excise Duty Operations
Excise Duties and Taxes Div.
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