Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 11th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 189115R
Dear [Client]:
Subject: GST/HST RULING
Tax Status of Halva
[…].
The HST applies in the participating provinces at the following rates: 13% in Ontario; and 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island. The GST applies in the rest of Canada at the rate of 5%.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
STATEMENT OF FACTS
We understand the following:
1. The Product is categorized as confection in the Mediterranean and Middle Eastern regions.
2. The Product is a hard formed paste of ground seeds with sugar, vanilla, or cocoa flavouring. The Product is often referenced as “sweet meat”.
3. The Product is supplied in a […][greater than 230] gram loaf.
4. The following provides a list of ingredients for the various flavours available for the Product:
[…][the Product’s original flavour]: […].
[…][the Product’s original flavour with ingredient A]: […].
[…][the Product’s original flavour with ingredient B]: […].
[…][the Product’s original flavour with ingredient C]: […].
[…][the Product with ingredient D]: […].
[…][the Product with ingredient E]: […].
RULING REQUESTED
You would like to know whether the Product that is supplied in a serving of [greater than 230] grams is a zero-rated basic grocery product under Part III of Schedule VI.
RULING GIVEN
Based on the facts set out above, we rule that the Product that is supplied in a serving of 230 grams or more is a zero-rated basic grocery product under Part III of Schedule VI.
EXPLANATION
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 to be mixed with or used in the preparation of such food or beverages), unless an exclusion set out in paragraph 1(a) through 1(r) of that section applies.
Paragraph 1(m) excludes from zero-rating cakes, muffins, pies, pastries, tarts, cookies, doughnuts, brownies, croissants with sweetened filling or coating, or similar products (emphasis added) where: (i) they are pre-packaged for sale to consumers in quantities of less than six items each of which is a single serving, or (ii) they are not pre-packaged for sale to consumers and are sold as single servings in quantities of less than six.
Servings larger than a single serving are zero-rated. For the purposes of paragraph 1(m), a single serving is a serving of less than 230 grams.
The Product is considered to be a “similar product” for the purposes of paragraph 1(m) under Section 1 of Part III of Schedule VI. Where the Product is supplied in quantities of less than six single servings, the Product will be excluded from zero-rating under Part III of Schedule VI. However, where the Product is supplied in quantities of six or more single servings, or, as in this case, a serving of 230 grams or more, the Product is zero-rated under Part III of Schedule VI.
A supplier who collects an amount as or on account of GST/HST in error is required to include that amount in its net tax for the reporting period in which it was collected and to remit any net tax amount owing for the reporting period.
Where a supplier has charged or collected an excess amount as or on account of tax in error on a supply of a product or service that qualifies for zero-rating, the supplier may refund or credit the excess amount to the recipient in accordance with section 232. If the supplier refunds or credits the amount collected as GST/HST in error, the supplier must do so within two years after the day the amount was charged or collected and provide the recipient with a credit note (unless the recipient issues a debit note) containing prescribed information. Generally, the supplier may deduct the amount to the extent that it has been included in determining the net tax for the reporting period in which the credit note is issued or a preceding reporting period. For additional information, see GST/HST Memorandum 12-2 Refund, Adjustment, or Credit of the GST/HST under Section 232 of the Excise Tax Act.
Alternatively, persons who have paid an amount as GST/HST on supplies that qualify for zero-rating may make an application to the Canada Revenue Agency for a rebate of tax paid in error under section 261 using Form GST189, General Application for Rebate of GST/HST. The time limit to apply for this rebate is within two years after the day the amount was paid. An amount that has previously been refunded is not eligible for the rebate. Also, a rebate is not payable unless the amount of the rebate exceeds two dollars. For additional information, see the GST/HST Guide General Application for GST/HST Rebates.
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the Canada Revenue Agency (CRA) is bound by the ruling(s) given in this letter provided that: none of the issues discussed in the ruling(s) are currently under audit, objection, or appeal; no future changes to the ETA, regulations or the CRA’s interpretative policy affect its validity; and all relevant facts and transactions have been fully and accurately disclosed.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 905-721-5081. 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,
Peter Pushkarna
Basic Groceries & Recaptured Input Tax Credits Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
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