Federal Excise Stamp Mandatory on Tobacco Products as of July 1, 2012
The purpose of this notice is to provide clarification regarding the tobacco stamping requirements under the Stamping and Marking of Tobacco Products Regulations (SOR/2003-288).
The information in this notice is for reference purposes only and does not replace the Act or its regulations. Should there be any discrepancy between the information in this notice and that contained in the Act or its regulations, the legislative provisions apply. As the information in this publication may not completely address your particular situation, you may wish to refer to the Act or appropriate regulation, 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.
On May 1, 2012, the Canada Revenue Agency (CRA) announced in a news release that, effective July 1, 2012, all cigarettes, tobacco sticks and fine-cut tobacco products for sale anywhere in the Canadian duty-paid market must carry the federal excise stamp. No person shall sell, offer for sale, or possess these tobacco products unless they are stamped in accordance with the Excise Act, 2001. Any person who contravenes this requirement is liable to a fine, imprisonment, or both.
The excise stamp indicates that federal excise duty has been paid and that the product was manufactured legally. It has state-of-the-art visible and hidden identifiers and security features similar to those found on Canadian banknotes, such as unique colour-shift ink that changes from red to green when the stamp is tilted. The stamp also has hidden security features that only federal and provincial law enforcement agencies can detect.
These features allow law enforcement agencies, retailers, and consumers to more easily identify counterfeit and contraband tobacco products. The federal excise stamp is distributed through a secure process administered by the CRA.
Since April 1, 2011, the new excise tobacco stamp has been mandatory on all new tobacco products destined for the Canadian duty-paid market. However, for a limited transition period following that date, tobacco products in the market place were still allowed to have the former tear-tapes or paper stamps until inventories of the older products were depleted.
As of July 1, 2012, the transition period will be over, and cigarettes, tobacco sticks, and fine-cut tobacco products for sale in the Canadian duty-paid market must carry the federal excise stamp to be legal. To accommodate the longer shelf life of cigars, the former tear-tapes or paper stamps may continue to appear for a limited period of time.
Along with the new federal stamp, mandatory provincial tear-tape markings may continue to appear on tobacco product packages. However, Nova Scotia, Prince Edward Island, New Brunswick, Quebec, Manitoba and Alberta will participate in a combined tobacco stamping regime, which introduces stamps that display both federal and provincial requirements. Other provinces and/or territories may join as well. Information about provincial or territorial participation and implementation dates will be communicated by the relevant provincial or territorial authority.
For more details on the excise stamp, go to the Excise duty webpage.
For all technical publications related to the Excise Act, 2001 and its regulations, go to Excise Act, 2001 – Technical Information.
To request a ruling or interpretation or make a technical enquiry on excise duty, contact one of the regional excise duty offices listed in Excise Duty Memorandum EDM1-1-2, Regional Excise Duty Offices.
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