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XXXXXXXXXX
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April 24, 200344886
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Dear XXXXX:
Thank you for your letter XXXXX concerning the production and export of prescribed tobacco brands.
I understand from your letter that XXXXX has not previously manufactured the listed brand and its brand extensions in Canada, and that they are not sold in Canada. Furthermore, it is not your intention to sell the XXXXX brand or its extensions in the Canadian market. The products will be exported to the United States with the marking "Product is Not For Sale in Canada".
We have previously agreed to recommend the XXXXX " brand extensions, as another manufacturer has previously requested XXXXX brand extensions be prescribed brands for the purposes of the exemption from the export tax and marking provisions. In this regard, we have recommended that the Governor General in Council approve the listed brand extensions as prescribed brands 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 new Excise Act, 2001, which is scheduled to come into force on July 1, 2003.
As a transitional measure pending the implementation of the new Act, we are prepared to allow the cigarette brand extensions appearing on the attached lists 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, the listed brand extensions 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 of the cigarettes sold under these brand extensions will be exported from Canada. Accordingly, they 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 brand extensions - 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 brand and brand extension 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
Acting Manager
Excise Duty Operations
Excise Duties and Taxes Div.
Attachment
XXXXX Appendix A
Tobacco products in your letter XXXXX for which administrative approval as "prescribed tobacco brands" has already been granted:
XXXXX
XXXXX
XXXXX
XXXXX
XXXXX
XXXXX
XXXXX
XXXXX
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