EDN29 – Tobacco Stamping Regime – Excise Stamp Order Process
The information in this notice does not replace the law found in the Excise Act, 2001 and its regulations and is provided for your reference and convenience only. As the information in this publication may not completely address your particular operation, you may wish to refer to the Act or its regulations, or you may contact the Excise Stamp Order Desk or your regional excise duty office for additional information. A list of all regional excise duty offices is available in Excise Duty Memorandum 1.1.2, Regional Excise Duty Offices, on the Canada Revenue Agency (CRA) Web site.
The purpose of this notice is to provide guidance to tobacco licensees and prescribed persons seeking to acquire excise stamps under the new tobacco stamping regime in accordance with the Excise Act, 2001 (Act).
On July 12, 2010, the Jobs and Economic Growth Act received Royal Assent. This act contains the legislative amendments to the Excise Act, 2001 required to implement the new stamping regime for tobacco products.
Some of the legislative amendments are summarized below:
- the Minister of National Revenue has sole authority to authorize a stamp provider to supply excise stamps to persons approved by the CRA;
- the possession of excise stamps is restricted to tobacco licensees and prescribed persons who import tobacco products into the duty-paid market;
- prior to obtaining excise stamps, tobacco licensees and prescribed persons must post security in the amount and form satisfactory to the Minister;
- persons who are issued excise stamps must maintain proper records and account for those stamps.
In accordance with the legislative amendments to the Excise Act, 2001, the new excise stamp became available on September 1, 2010. Effective April 1, 2011, all tobacco products to be entered into the duty-paid market or to be released under the Customs Act for entry into the duty-paid market must be stamped with the new excise stamp. For a limited transition period following April 1, 2011, both the new excise stamps and/or the current tear-tape or paper stamps may appear on tobacco products that were entered into the duty-paid market prior to that date. Further, provincially marked tear tape may continue to be present on duty-paid tobacco products.
Who may produce or use excise stamps?
The Act restricts the production of excise stamps to a CRA authorized stamp provider and restricts their distribution to tobacco licensees and prescribed persons who import tobacco products.
Instructions for obtaining a tobacco licence can be found in the Regulations Respecting Excise Licences and Registrations and Excise Duty Memorandum EDM2.2.1, Obtaining and Renewing a Licence.
Instructions on becoming a prescribed person can be found in Excise Duty Notice EDN28, Becoming a Prescribed Person under the New Tobacco Stamping Regime.
Supply of excise stamps – Overview
The Minister is responsible for approving the design of the new excise stamp and its production. The actual supply of the excise stamp will be through an authorized stamp provider. This supply will be made under commercial practices, while the price of the stamp is governed by the public tendering process.
To facilitate the timely distribution of excise stamps, it is strongly recommended that parties interested in purchasing excise stamps communicate their intentions in a timely manner to the CRA Excise Stamp Order Desk. The CRA will then provide contact information in order to facilitate discussions between the stamp provider and parties interested in developing a supply arrangement.
Excise stamp ordering process
Tobacco licensees and prescribed persons interested in purchasing excise stamps must first register with the CRA by submitting a completed registration form to the Excise Stamp Order Desk and posting security in the amount and form satisfactory to the Minister. To obtain the application form, Registration for the Tobacco Stamping Regime, contact the Excise Stamp Order Desk at the following address and numbers:
Excise Stamp Order Desk
Excise Duties and Taxes Division
Excise and GST/HST Rulings Directorate
Canada Revenue Agency
Place de Ville Tower A 11th floor
320 Queen St
Ottawa ON K1A 0L5
The CRA will review the eligibility of each application and the amount of security posted or to be posted. More details on the security requirements may be found in the Regulations Amending the Stamping and Marking Regulations (2011) or from the Excise Stamp Order Desk.
Approved applications will be confirmed by the CRA. Each registered stamp user will be provided with a user name and temporary password to access the on-line stamp ordering system.
Any denial of an application or limitations placed on stamp orders will be communicated to the applicant.
Users can log on to the on-line stamp ordering system and place an order for excise stamps by entering the assigned user name and temporary password. For security purposes, it is recommended that the purchaser change this password upon first login to the system.
Once an order is placed, the user may track the status of their orders on-line.
The CRA will review orders received on each business day, and
- verify the eligibility of the purchaser;
- verify the details of the stamp order;
- ensure that the security amount provided by the purchaser is sufficient; and
- periodically perform reconciliations of stamps to determine the level of compliance with the Act and its regulations, and confirm that the security amount posted is appropriate and that all stamps issued to the purchaser are accounted for.
Orders received by noon Eastern Time each business day will be reviewed that business day. If received after noon, the order will be reviewed on the following business day.
Once reviewed, the CRA will either
- approve and release the order to the stamp provider for processing; or
- reject the order and provide justification to the user.
Users may select the option of receiving an e-mail notice of approval at the time of registration.
When the stamp provider receives the CRA approved order, it will process the order according to the delivery standards set out in the supply arrangement between the stamp provider and the purchaser. Where there is no supply arrangement, the standards set out in the public tendering contract for stamps will be applied. These standards require delivery in Canada within two business days and within five business days for deliveries outside of Canada.
Excise stamps will be delivered as dry (non-adhesive) individual stamps wrapped in bundles of 500. The stamps are available in the following denominations:
- Cigarettes – 20 units
- Cigarettes – 25 units
- Cigarettes – 200 units
- Tobacco – 50 grams
- Tobacco – 100 grams
- Tobacco – 150 grams
- Tobacco – 200 grams
- Tobacco – 250 grams
- Tobacco – 400 grams
- Raw leaf
Note: Tobacco sticks will also require the above cigarette stamp denominations.
Upon receipt of the excise stamps, the purchaser’s authorized shipping site must acknowledge receipt of the stamps. It is the purchaser’s responsibility to maintain appropriate records to determine the receipt, retention, location, use or disposition of the stamps ordered.
The stamp provider will issue an invoice for the excise stamps delivered at pre-established prices plus applicable taxes and delivery charges.
In accordance with the publicly awarded contract to design, manufacture and distribute the excise stamp, the firm unit price of the excise stamp is as follows:
- September 1, 2010 to March 31, 2014 – $0.00592
- April 1, 2014 to March 31, 2015 – $0.00622
- April 1, 2015 to March 31, 2016 – $0.00641
- April 1, 2016 to March 31, 2017 – $0.00660
- April 1, 2017 to March 31, 2018 – $0.00680
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