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, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
Case Number: 109576R
Business Number: XXXXX
Attention: XXXXX
April 6, 2009
Subject:
GST/HST RULING
Dear XXXXX:
XXXXX
Thank you for your e-mail of XXXXX requesting that we re-consider our ruling of XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to sales of XXXXX (the Product). We had ruled that the Product was taxable at 5% GST or 13% HST.
In your e-mail you provided us with additional information on the nature of the Product, which is contained in paragraphs 8 and 9 of the Statement of Facts below. Upon further consideration, the previous ruling issued to you is hereby revoked and replaced with this ruling effective
XXXXX.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
Statement of Facts
We understand the facts to be as follows:
1. The Product is labelled as XXXXX.
2. The ingredients are XXXXX.
3. The Product is packaged in a XXXXX.
4. The Product label contains the descriptions "XXXXX".
5. The label states: XXXXX.
6. The Directions state: XXXXX
7. The label contains a caution that states: XXXXX
8. The Product is classified in the XXXXX as "Antacids & Antiflatulents". However, you have stated that the Product should be classified as a dietary aid for XXXXX intolerance, not as an antacid or anti-flatulent.
9. Pursuant to the Food and Drug Regulations, Part B, Division 16 - Food Additives; Table V - Food Additives That May Be Used as Food Enzymes, made under the authority of the Food and Drug Act, XXXXX is listed as a food additive permitted in or upon XXXXX reducing XXXXX preparations, milk and bread, at levels of good manufacturing practices.
10. We have also determined that the Product does not have a DIN, DIN-HM or NPN and is not currently classified as a drug or natural health product under the Food and Drug Act.
Ruling Requested
It is your view that supplies of the Product are zero-rated for purposes of the GST/HST.
Ruling Given
Based on the facts set out above, we rule that supplies of the Product are zero-rated.
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 to Her Majesty in right of Canada tax in respect of the supply calculated at the GST rate of 5% or the HST rate of 13% on the value of the consideration for the supply. Where a supply is a zero-rated supply, the tax rate in respect of that supply is 0%.
Section 1 of Part III of Schedule VI to the ETA zero-rates supplies of food or beverages for human consumption (including sweetening agents, seasonings and other ingredients to be mixed with or used in the preparation of such foods or beverages), unless one of the exceptions set out in paragraphs 1(a) through 1(r) applies. In this case, none of the exclusionary paragraphs applies.
The Product is XXXXX and is therefore an ingredient. As noted in the Statement of Facts, XXXXX is a permitted food additive under the Food and Drug Regulations. XXXXX is the active ingredient in the Product; the XXXXX serve as a medium to carry the XXXXX in liquid form. The Product XXXXX. Most supplies of milk and other liquid dairy products are zero-rated. The Product does not have a DIN, DIN-HM or NPN.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-957-8253. 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,
Gunar Ozols
Goods Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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