Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 16th floor
320 Queen Street
Ottawa ON K1A 0L5
XXXXX
XXXXX
XXXXX
Case Number: XXXXX
Business Number: XXXXX
XXXXX
XXXXX
December 5, 2008
Dear XXXXX:
Subject:
GST/HST RULING
XXXXX Rice Snacks XXXXX
Thank you for your XXXXX of XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to XXXXX Rice Snacks XXXXX (the Product).
HST applies at the rate of 13% in the participating provinces of Nova Scotia, New Brunswick and Newfoundland and Labrador. GST applies at the rate of 5% in the remaining provinces and territories.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
Statement of Facts
Our understanding of the facts is as follows:
1. The Product is manufactured by XXXXX. The following information was obtained from an actual Product label and from the XXXXX web site XXXXX
2. The Product is listed on the XXXXX web site under XXXXX, along with other products such as XXXXX. The Product is described as XXXXX rice.
3. The Product consists of XXXXX rice cakes which are approximately XXXXX The Product is packaged in XXXXX and has a net weight of XXXXX. The bag sampled contained XXXXX of the rice cakes.
4. The front of the package contains the following information:
XXXXX
5. The side panel contains the following information:
XXXXX
6. The back of the package contains the Ingredients and Nutrition Facts. The ingredients are XXXXX.
The back panel also states XXXXX.
Ruling Requested
You would like to know the GST/HST status of supplies of the Product.
Ruling Given
Based on the facts set out above, we rule that supplies of the Product are zero-rated supplies (taxable at 0%) pursuant to subsection 165(3) and section 1 of Part III of Schedule VI.
This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.
Explanation
Generally, every recipient of a taxable supply made in Canada shall pay tax calculated at the rate of 5% on the value of the consideration for the supply (or 13% in the participating provinces of Nova Scotia, New Brunswick, and Newfoundland and Labrador) unless the supply is zero-rated. Zero-rated supplies are included in Schedule VI. The tax rate in respect of a zero-rated supply is 0%.
Under Part III of Schedule VI, certain supplies of basic groceries are zero-rated. Section 1 of Part III of Schedule VI zero-rates supplies of food or beverages for human consumption, including sweetening agents, seasonings and other ingredients mixed with or used in the preparation of such food or beverages, other than supplies included in paragraphs (a) to (r) of that section.
Paragraph 1(m) of Part III of Schedule VI excludes from zero-rating:
"Cakes, muffins, pies, pastries, tarts, cookies, doughnuts, brownies, croissants with sweetened filling or coating, or similar products where
(i) they are prepackaged for sale to consumers in quantities of less than six items each of which is a single servingi, or
(ii) they are not prepackaged for sale to consumers and are sold as single servings in quantities of less than six,
but not including bread products, such as bagels, English muffins, croissants or bread rolls, without sweetened filling or coating;"
Additional information on sweetened goods and similar products are can be found in paragraphs 87 to 100 of GST/HST Memoranda Series 4.3, Basic Groceries. Goods that are zero-rated under paragraph 1(m) of Part III of Schedule VI, as they are not considered to be "sweetened goods", are listed in paragraph 94 of Memoranda Series 4.3 and include crackers. Unsweetened rice cakes are included in the list of products which are similar to crackers.
As the Product is an unsweetened rice cake, it will thus not be excluded from zero-rating by paragraph 1(m) of Part III of Schedule VI. As the Product is a food that is not included in any of paragraphs (a) to (r) of section 1 of Part III of Schedule VI, supplies of the Product are zero-rated under section 1 of the same Part and Schedule.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-5124. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Yours truly,
Nancy Jardine
Goods Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
i For GST/HST purposes, generally a single serving of cake, pie, muffin, pastry, tart, cookie doughnut, brownie, croissant with a sweetened filling or coating or a similar product, is a serving weighing less than 230g.
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