16 September 2004 GST/HST Interpretation 51121 - Bad debts, Accounts Receivable, and Labour & Material Payment Bonds

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.

You have requested an interpretation on the application of the GST/HST to East Indian Sweets sold by XXXXX

Your client has provided you with a list of his most common products. These include khoa burfee, kalakand, milk cake, peda, gulab jamun, rasgulla, karela, bikenari burfee, dhoda, rasbhari, chhaina murgi, badam kali, pakeezah, kheer mohan, laddoo, jalebi, chum chum, kali goli, gulab phool, rasmalai, gajar halwa, kesar pak, baloo shahi, pinni, shakkarpara and pista burfee.

You explained that the products are displayed in a retail environment similar to that of a bakery, i.e. in refrigerated display units with a shelf life of one day. The products can be purchased by the piece or by the pound and are supplied in take out boxes.

Section 1 of Part III of Schedule VI to the ETA zero-rates supplies of food or beverages for human consumption and sweetening agents, seasonings and other ingredients mixed with or used in the preparation of such food or beverages, unless one of the exclusions set out in paragraphs 1(a) through 1(r) applies.

It is our position that the East Indian Sweet products listed above fall within paragraph 1(m) of Part III of Schedule VI to the ETA. As such, when supplied in quantities of six or more, these products are zero-rated. However, these products are taxable at 7% GST or 15% HST, as applicable, when sold in quantities of less than six.

Should you have any questions, or require further clarification, please do not hesitate to contact me at (613) 952-9585.

2004/09/28 — RITS 51177 — Tax Status of Amount Identified as Commission on Subcontractor's Settlement Statement