7.1.2 Tobacco Dealers

From: Canada Revenue Agency

June 2013

NOTE: This version replaces the one dated July 2003.

Under the Excise Act, 2001 (the Act), a person is required to obtain a tobacco dealer's licence in order to be authorized to perform certain activities that are restricted under the Act. This memorandum provides an overview of the obligations and entitlements of persons who may become licensed tobacco dealers.

The information in this memorandum does not replace the law found in the Act and its regulations. It is provided for your reference. As it may not completely address your situation, you may wish to refer to the Act or its regulations, 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.


1. The following terms are used in this memorandum, as per section 2Footnote 1 :

A tobacco dealer means a person, other than a tobacco licensee, who purchases for resale, sells or offers to sell raw leaf tobacco on which duty is not imposed under the Act.

Raw leaf tobacco means unmanufactured tobacco or the leaves and stems of a tobacco plant.

Manufacture, in respect of a tobacco product, includes any step in the preparation or working up of raw leaf tobacco into the tobacco product. It includes packing, stemming, reconstituting, converting or packaging the raw leaf tobacco or tobacco product.

Tobacco dealer's licence


2. As per paragraph 14(1)(e), any person who wishes to carry on activities as a tobacco dealer in Canada is required to obtain a tobacco dealer's licence. The tobacco dealer's licence is issued by the CRA.

3. Information relating to the requirements and procedures for obtaining a tobacco dealer's licence under the Act is provided in Excise Duty Memorandum EDM2.2.1, Obtaining and Renewing a Licence.

Activities of a tobacco dealer

4. A licensed tobacco dealer is engaged in purchasing raw leaf tobacco for resale, selling, import or export.

5. Under section 26, no person is allowed to carry on the activities of a tobacco dealer without obtaining a tobacco dealer's licence.

6. A tobacco dealer is not permitted to kiln dry, cut, stem or otherwise manufacture or work, raw leaf tobacco or to destroy raw leaf tobacco.

Possession and removal of raw leaf tobacco

7. Under paragraph 30(2)(a), licensed tobacco dealers are permitted to dispose of, sell, offer to sell, purchase or have in their possession raw leaf tobacco.

8. A licensed tobacco dealer may import raw leaf tobacco or may purchase raw leaf tobacco from:

  • a tobacco grower;
  • a body established under provincial law for the marketing of raw leaf tobacco grown in the province (i.e., a tobacco marketing board);
  • a tobacco licensee; or
  • another tobacco dealer.

9. Under section 46, raw leaf tobacco imported by a licensed tobacco dealer is relieved of excise duty.

10. Section 28.1 permits a licensed tobacco dealer to remove raw leaf tobacco from their premises only in the following circumstances:

  • for return to a tobacco grower;
  • for delivery to a tobacco licensee or another licensed tobacco dealer; or
  • for export.

Otherwise, as per section 46, it is prohibited to remove raw leaf tobacco from the premises of a licensed tobacco dealer.

11. Additional information concerning tobacco licensees is available in Excise Duty Memorandum EDM7.1.1, Manufacturers of Tobacco Products.

Maintaining records and filing returns

12. According to subsection 206(1), every person who possesses a licence under the Act is required to maintain all records that are necessary to determine whether they are in compliance with the Act.

13. Additional information on the requirement to maintain books and records is available in the following Excise Duty memoranda: EDM9.1.1, General Requirements for Books and Records and EDM9.3.1, Export Documentation.

14. Every licensed tobacco dealer is required, under section 160, to file Form B271, Excise Duty Return – Tobacco Dealer in respect of each reporting period.

15. According to subsection 189(4), if you have to file any returns under the Act, the Customs Act, the Excise Act, Excise Tax Act, the Income Tax Act or the Air Travellers Security Charge Act, but have not done so, any refund you are entitled to will be held until all required returns are filed.

16. Additional information with respect to the filing of monthly returns is available in Excise Duty Memorandum EDM10.1.1, Returns and Payments.

Offences and penalties

17. According to section 215, any person determined to be carrying on the activities of a tobacco dealer without holding a tobacco dealer's licence is in contravention of the Act and is guilty of an offence or subject to a penalty under the Act.

All of the excise duty memoranda are available on the CRA Web site at www.cra.gc.ca/exciseduty, under "Excise Act, 2001 – Technical Information".

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