GST/HST Rulings and Interpretations
Directorate
Place Vanier, Tower C, 10th Floor
25 McArthur Avenue
Vanier, ON K1A 0L5
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XXXXX
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Case: HQR 0000902
XXXXX
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Subject:
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GST/HST APPLICATION RULING
Basic Groceries
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Dear XXXXX
Thank you for your letter concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the transactions described below. Please accept our sincere apologies for the delay in responding.
You confirmed that, to the best of your knowledge, none of the issues described herein is being considered by a Revenue Canada Office in connection with a GST/HST return already filed and none of the issues are under objection or appeal.
Statement of Facts
Our understanding of the facts, the proposed transactions, and the purpose of the proposed transactions is as follows:
XXXXX produces the following XXXXX products that are offered for sale to consumers in XXXXX[.] The Department is of the view that XXXXX consist of XXXXX. Each XXXXX g consists of the following:
XXXXX
XXXXX
XXXXX
XXXXX
XXXXX
XXXXX
XXXXX
XXXXX are sold to consumers in a package containing x three individual servings. There is one UPC code and one list of ingredients for XXXXX[.] The XXXXX s are not labeled in XXXXX also offers these products to consumers in XXXXX[.] These are known as XXXXX[.] A XXXXX format of packaging has been created for the individual sales market. These packages are labeled in accordance with regulations that permit their individual sale. These are called XXXXX and are offered for sale to retailers in a box containing XXXXX[.]
Ruling Requested
1. The supply of a XXXXX is zero-rated.
2. The supply of a XXXXX is zero-rated.
3. The supply of XXXXX is zero-rated.
Ruling Given
Provided that the preceding statements constitute a complete and accurate disclosure of all the facts, the proposed transactions, and the purpose of the proposed transactions, and provided that the proposed transactions are completed as described above, our ruling is as follows:
The following supplies of XXXXX are zero-rated:
XXXXX
XXXXX
XXXXX[.]
The following supplies of XXXXX are taxable when sold in the XXXXX
XXXXX
XXXXX
XXXXX[.]
When sold in XXXXX, all varieties of XXXXX are zero-rated supplies.
Analysis
The supply of basic groceries, which includes the majority of supplies of food and beverages marketed for human consumption (including sweetening agents, seasonings and other ingredients to be mixed with or used in the preparation of such food or beverages), is zero-rated. Certain categories of foodstuffs, for example, carbonated beverages, candies and confections, and snack foods are, however, taxable at 7% or 15%. Pursuant to paragraph 1(m) of Part 1 of Schedule VI to the Excise Tax Act (the Act), supplies of cookies and products similar to cookies are taxable where they are prepackaged for sale to consumers in quantities of less than six items each of which is a single serving. The Department considers XXXXX to be products that are similar to cookies, and, as mentioned above, XXXXX consist of XXXXX[.] Therefore, paragraph M of part 1 provides that products similar to cookies are taxable where they are prepackaged for sale to consumers in quantities of less than 6 items, each of which is a single serving. As such, supplies of XXXXX are taxable whereas supplies of XXXXX are zero-rated.
These rulings are given subject to the general limitations and qualifications outlined in section 1.4 of Chapter 1 of the GST/HST Memoranda Series issued by Revenue Canada.
These rulings are based on the Excise Tax Act in its present form and does not take into account any proposed amendments to the Excise Tax Act or to departmental interpretative policy, which, if enacted, could have an effect on the ruling provided herein.
Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-9585.
Yours truly,
Tony Hahn
Services and Intangibles Unit
General Operations and Border Issues Division
GST/HST Rulings and Interpretations Directorate
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