893.512 Liggett and Myers Tobacco Co./3
The Secretary of State to the Minister in China (Johnson)
Sir: The Department has received the Legation’s desptach No. 427 of August 27, 1930,46 relating to the attempt of the Consolidated Tobacco Tax Bureau at Tientsin to collect from an American firm an excise tax on cigarettes at a rate higher than that prescribed for this excise by the National Government of China, that is, thirty-two and one-half per cent.
The Department notes that the Legation, in its memorandum of August 26, 1930, to the Diplomatic Bureau, Peiping,47 refers to the fact that the National Tariff of the Republic of China prescribes that cigarettes shall be subject to certain import duties and that a note appended to the Tariff states that in addition to such customs duties, cigarettes shall be subject to an excise of thirty-two and one-half per cent. The Legation goes on to request that the cargo in question be released without payment of the increased excise, basing its request on the fact that business would become impossible if individual provinces were to impose excises at will.
The Department notes that in the present case the Consolidated Tobacco Tax Bureau endeavored to use the Maritime Customs as a means for compelling the payment of an excise at a rate higher than that prescribed by the National Government. The Department believes that the American importer had a right to expect that the rates of import duty and of excise set forth by the National Government would be the rates at which the merchandise in question would be taxed at the time of importation and the Legation’s memorandum of August 26, 1930, to the Diplomatic Bureau is approved.
Very truly yours,