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: 189695r
Business Number: […]
Dear [Client]:
Subject: GST/HST RULING
Supply of prepared meals by a charity
Thank you for your fax of [mm/dd/yyyy] concerning the application of the goods and services tax/harmonized sales tax (GST/HST) to your supplies of prepared meals to seniors. We apologize for the delay in our response.
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
1. […](the Charity) is a registered charity for income tax purposes, effective [mm/dd/yyyy], and is also a charity for GST/HST purposes.
2. The Charity is not registered for GST/HST purposes.
3. According to the Charity’s website, […][describes the Charity’s purpose].
4. In [yyyy], the Charity opened […][a café] located […][in a Facility]. According to the Charity’s website, […][describes the Charity’s purposes in operating the café].
5. The Facility is a building owned by […][the Corporation]. The Charity does not operate the Facility. The Facility’s website states, […][that the Facility is a residence for seniors].
6. Under the heading […], the Facility’s website states, […][that the café prepares and serves food to residents of the Facility for consideration].
7. On [mm/dd/yyyy], you sent a fax to the attention of […][an officer] of the Canada Revenue Agency regarding the first GST/HST Ruling you received on this fact situation. The fax contained the commercial lease between the Charity and [the Corporation]. The following statement was made on the covering sheet of that fax,
“Please note that the intention of the café is to provide food security to marginalized individuals (seniors who live in the building)”.
8. On [mm/dd/yyyy], you sent a fax to the attention of […][the CRA officer] that contained a copy of a letter dated [mm/dd/yyyy], from […][a municipal zoning official] to […][a representative of the Corporation]. The letter referred to the completion of […][a review] respecting zoning bylaw compliance of the Facility. The letter stated (in part): […][that the café caters almost exclusively to the residents of the Facility. It is a cafeteria permitted as an accessory use to the Facility. It is not a restaurant].
[…]
RULING REQUESTED
Is a supply of food or beverages by the Charity to the residents of the Facility exempt pursuant to section 4 of Part V.1 of Schedule V to the ETA?
RULING GIVEN
Based on the facts set out above, we rule that a supply of food or beverages by the Charity to residents of the Facility is an exempt supply pursuant to section 4 of Part V.1 of Schedule V to the ETA.
A supply of food and beverages made to the Charity by any supplier for the purpose of this program is also exempt.
EXPLANATION
The facts support that:
- the Charity is making supplies of food and beverages.
- the supplies are made to seniors in their place of residence.
- the supplies are made under a program established and operated for the purpose of providing prepared food to such individuals in their places of residence.
Therefore, a supply of food or beverages by the Charity to the residents of the Facility is exempt pursuant to section 4 of Part V.1 of Schedule V to the ETA.
A supply of food and beverages made by the Charity to a guest of a senior resident would not be exempt under section 4 of Part VI of Schedule V to the ETA, unless the supply is made to a senior, an underprivileged individual or an individual with a disability. Therefore, a supply of food and beverages made by the Charity to a guest of a resident who is not an individual described above would be a taxable supply for purposes of the GST/HST.
The Charity is not registered for the GST/HST and provided that the Charity is a small supplier and not required to be registered for the GST/HST, no tax is payable in respect of its taxable supplies. For more information on whether a charity has to register for the GST/HST, see GST/HST Guide RC4082, GST/HST Information for Charities.
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 given in this letter provided that: none of the issues discussed in the ruling 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 613-670-7941. 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,
Trent MacDonald
Charities and Non-profit Organization Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
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