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Excise Act, 2001 (S.C. 2002, c. 22)

Full Document:  

Act current to 2022-07-25 and last amended on 2022-06-30. Previous Versions

PART 3Tobacco (continued)

Duty on Tobacco (continued)

Marginal note:Definition of inflationary adjusted year

  •  (1) In this section, inflationary adjusted year means 2019 and every year after that year.

  • Marginal note:Annual adjustments

    (2) Each rate of duty set out in sections 1 to 4 of Schedule 1 and paragraph (a) of Schedule 2 in respect of a tobacco product is to be adjusted on April 1 of an inflationary adjusted year so that the rate is equal to the greater of

    • (a) the rate determined by the formula

      A × B

      where

      A
      is the rate of duty applicable to the tobacco product on March 31 of the inflationary adjusted year, and
      B
      is the amount, rounded to the nearest one-thousandth, or, if the amount is equidistant from two consecutive one-thousandths, rounded to the higher one-thousandth, determined by the formula

      C/D

      where

      C
      is the Consumer Price Index for the 12-month period ending on September 30 of the particular year preceding the inflationary adjusted year, and
      D
      is the Consumer Price Index for the 12-month period ending on September 30 of the year preceding the particular year; and
    • (b) the rate of duty referred to in the description of A in paragraph (a).

  • Marginal note:Rounding

    (3) The adjusted rate determined under subsection (2) is to be rounded to the nearest one-hundred-thousandth or, if the adjusted rate is equidistant from two consecutive one-hundred-thousandths, to the higher one-hundred-thousandth.

  • Marginal note:Consumer Price Index

    (4) In this section, the Consumer Price Index for any 12-month period is the result arrived at by

    • (a) aggregating the Consumer Price Index for Canada, as published by Statistics Canada under the authority of the Statistics Act, for each month in that period;

    • (b) dividing the aggregate obtained under paragraph (a) by 12; and

    • (c) rounding the result obtained under paragraph (b) to the nearest one-thousandth or, if the result obtained is equidistant from two consecutive one-thousandths, to the higher one-thousandth.

  • 2014, c. 20, s. 64
  • 2018, c. 12, s. 47

Marginal note:Application of Customs Act

 The duties imposed under sections 42 and 43 on imported raw leaf tobacco and tobacco products shall be paid and collected under the Customs Act, and interest and penalties shall be imposed, calculated, paid and collected under that Act, as if the duties were a duty levied under section 20 of the Customs Tariff, and, for those purposes, the Customs Act applies with any modifications that the circumstances require.

Marginal note:Duty relieved

  •  (1) The duties imposed under sections 42 and 43 are relieved on a tobacco product that is not stamped.

  • Marginal note:Tobacco imported by an individual for personal use

    (2) Subsection (1) does not apply to the importation of tobacco products by an individual for their personal use to the extent that the quantity of the products imported exceeds the quantity permitted under Chapter 98 of the List of Tariff Provisions set out in the schedule to the Customs Tariff to be imported without the payment of duties (as defined in Note 4 to that Chapter).

Marginal note:Duty relieved — raw leaf tobacco

 The duty imposed under section 42 is relieved on raw leaf tobacco that is imported by a tobacco licensee or a licensed tobacco dealer.

  • 2002, c. 22, s. 46
  • 2007, c. 18, s. 84

Marginal note:Duty relieved — stamped tobacco imported by individual

  •  (1) The duty imposed under section 42 is relieved on manufactured tobacco imported by an individual for their personal use if it was manufactured in Canada and is stamped.

  • Marginal note:Duty relieved — reimportation of stamped tobacco by individual

    (2) The duty imposed under section 42 is relieved on manufactured tobacco imported by an individual for their personal use if it was manufactured outside Canada, was previously imported into Canada and is stamped.

  • 2002, c. 22, s. 47
  • 2008, c. 28, s. 55

Marginal note:Duty relieved — importation for destruction

 The duty imposed under paragraph 42(1)(b) is relieved on stamped manufactured tobacco that was manufactured in Canada by a tobacco licensee and that is imported by the licensee for re-working or destruction in accordance with section 41.

Excise Warehouses

Marginal note:Restriction — entering tobacco

 No person shall enter into an excise warehouse

  • (a) a tobacco product that is stamped; or

  • (b) any other tobacco product except in accordance with this Act.

Marginal note:Definitions

  •  (1) The definitions in this subsection apply in this section.

    Canadian manufactured tobacco

    Canadian manufactured tobacco means manufactured tobacco that is manufactured in Canada but does not include partially manufactured tobacco or foreign brand tobacco. (tabac fabriqué canadien)

    foreign brand tobacco

    foreign brand tobacco means manufactured tobacco in respect of which the special duty imposed under section 56 is relieved because of section 58. (tabac de marque étrangère)

  • Marginal note:Categories of Canadian manufactured tobacco

    (2) For the purposes of subsection (5), each of the following constitutes a category of Canadian manufactured tobacco:

    • (a) cigarettes;

    • (b) tobacco sticks; and

    • (c) manufactured tobacco other than cigarettes and tobacco sticks.

  • Marginal note:Prohibition on removal

    (3) No person shall remove from an excise warehouse or a special excise warehouse manufactured tobacco or cigars manufactured in Canada.

  • Marginal note:Exception for Canadian manufactured tobacco

    (4) Subject to the regulations, Canadian manufactured tobacco may be removed from the excise warehouse of the tobacco licensee who manufactured it only if it is

    • (a) for export by the licensee in accordance with subsection (5) and not for delivery to a foreign duty free shop or as foreign ships’ stores;

    • (b) for delivery to the special excise warehouse of a special excise warehouse licensee, if the special excise warehouse licensee is permitted under this Act to distribute the Canadian manufactured tobacco; or

    • (c) for delivery to an accredited representative for their personal or official use.

  • Marginal note:Maximum quantity permitted to be exported from excise warehouse

    (5) A tobacco licensee shall not, at a particular time in a calendar year, remove a particular quantity of a category of Canadian manufactured tobacco from the licensee’s excise warehouse for export if the total quantity of that category removed in the year up to that time by the licensee from the warehouse for export, plus the particular quantity, exceeds 1.5% of the total quantity of that category manufactured by the licensee in the preceding calendar year.

  • Marginal note:Quantities to be excluded for the purposes of subsection (5)

    (6) In subsection (5), the total quantity of a category of Canadian manufactured tobacco manufactured by a licensee in the preceding calendar year does not include any quantity of that category that was exported by the licensee for delivery to a foreign duty free shop or as foreign ships’ stores.

  • Marginal note:Exception for cigars

    (7) Subject to the regulations, cigars manufactured in Canada may be removed from the excise warehouse of the tobacco licensee who manufactured them only if they are

    • (a) for export by the licensee in accordance with this Act;

    • (b) for delivery to the special excise warehouse of a special excise warehouse licensee, if the special excise warehouse licensee is permitted under this Act to distribute the cigars;

    • (c) for delivery to an accredited representative for their personal or official use;

    • (d) for delivery as ships’ stores in accordance with the Ships’ Stores Regulations;

    • (e) for delivery to another excise warehouse, if the excise warehouse licensee of the other excise warehouse certifies in the prescribed form to the tobacco licensee that the cigars are for delivery as ships’ stores in accordance with the Ships’ Stores Regulations; or

    • (f) for delivery to a duty free shop for sale or offer for sale in accordance with the Customs Act.

  • Marginal note:Exception for partially manufactured tobacco or foreign brand tobacco

    (8) Subject to the regulations, partially manufactured tobacco or foreign brand tobacco may be removed from the excise warehouse of the tobacco licensee who manufactured it only if it is exported by the licensee and not for delivery to a foreign duty free shop or as foreign ships’ stores.

  • Marginal note:Removal from warehouse — ships’ stores

    (9) Subject to the regulations, cigars manufactured in Canada may be removed from an excise warehouse referred to in paragraph (7)(e) for delivery as ships’ stores in accordance with the Ships’ Stores Regulations.

  • Marginal note:Removal from warehouse for re-working or destruction

    (10) Subject to the regulations, manufactured tobacco or cigars manufactured in Canada may be removed from the excise warehouse of the tobacco licensee who manufactured them if they are removed for re-working or destruction by the licensee in accordance with section 41.

  • Marginal note:Removal from special excise warehouse — accredited representatives

    (11) Subject to the regulations, Canadian manufactured tobacco and cigars may be removed from a special excise warehouse for delivery to an accredited representative for their personal or official use if the special excise warehouse licensee is permitted under this Act to distribute the tobacco or cigars.

  • 2002, c. 22, s. 50
  • 2007, c. 18, s. 85

Marginal note:Removal of imported tobacco

  •  (1) No person shall remove imported manufactured tobacco or cigars from an excise warehouse.

  • Marginal note:Exception

    (2) Subject to the regulations, imported manufactured tobacco or cigars may be removed from an excise warehouse

    • (a) for delivery to another excise warehouse;

    • (b) for delivery to an accredited representative for their personal or official use;

    • (c) for delivery as ships’ stores, in accordance with the Ships’ Stores Regulations;

    • (d) for delivery to a duty free shop for sale or offer for sale in accordance with the Customs Act; or

    • (e) for export in accordance with this Act by the excise warehouse licensee.

  • 2002, c. 22, s. 51
  • 2007, c. 18, s. 86

Marginal note:Restriction — special excise warehouse

 No special excise warehouse licensee shall store manufactured tobacco or cigars that are manufactured in Canada in their special excise warehouse for any purpose other than the sale and distribution of the tobacco or cigars to an accredited representative for the personal or official use of the representative.

  • 2002, c. 22, s. 52
  • 2007, c. 18, s. 87

Special Duties on Tobacco Products

Marginal note:Special duty on imported manufactured tobacco delivered to duty free shop

  •  (1) A special duty is imposed, at the rates set out in section 1 of Schedule 3, on imported manufactured tobacco that is delivered to a duty free shop and that is not stamped.

  • Marginal note:When and by whom duty is payable

    (2) The special duty is payable at the time of delivery and is payable by the duty free shop licensee.

  • 2002, c. 22, s. 53
  • 2008, c. 28, s. 56
  • 2014, c. 20, s. 65(F)

Meaning of traveller’s tobacco

  •  (1) In this section, traveller’s tobacco means manufactured tobacco that is imported by a person at any time and

    • (a) is classified under tariff item No. 9804.10.00, 9804.20.00, 9805.00.00 or 9807.00.00 in the List of Tariff Provisions set out in the schedule to the Customs Tariff; or

    • (b) would be classified under tariff item No. 9804.10.00 or 9804.20.00 in that List but for the fact that the total value for duty as determined under section 46 of the Customs Act of all goods imported by the person at that time exceeds the maximum value specified in that tariff item.

  • Marginal note:Special duty on traveller’s tobacco

    (2) A special duty is imposed on traveller’s tobacco at the time it is imported at the rates set out in section 2 of Schedule 3.

  • Marginal note:When and how duty is payable

    (3) The special duty shall be paid and collected under the Customs Act, and interest and penalties shall be imposed, calculated, paid and collected under that Act, as if the special duty were a duty levied under section 20 of the Customs Tariff, and for those purposes, the Customs Act applies with any modifications that the circumstances require.

  • Marginal note:Exception

    (4) The special duty is not imposed on traveller’s tobacco imported by an individual for their personal use if duty under section 42 was previously imposed on the tobacco and the tobacco is stamped.

  • 2002, c. 22, s. 54
  • 2008, c. 28, s. 57
  • 2014, c. 20, s. 66(F)

Definition of tobacco product

 In sections 56 to 58, tobacco product means manufactured tobacco other than partially manufactured tobacco.

Marginal note:Imposition

  •  (1) A special duty is imposed on a tobacco product that is manufactured in Canada and exported

    • (a) if the export is in accordance with paragraph 50(4)(a) by the tobacco licensee who manufactured it, at the rates set out in section 3 of Schedule 3; or

    • (b) in any other case, at the rates set out in section 4 of Schedule 3.

  • Marginal note:When and by whom duty is payable

    (2) Subject to sections 57 and 58, the special duty is payable, at the time the tobacco product is exported, by

    • (a) if paragraph (1)(a) applies, the tobacco licensee who manufactured it; or

    • (b) if paragraph (1)(b) applies, the person who exported it.

  • 2002, c. 22, s. 56
  • 2014, c. 20, s. 67(F)
 
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