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, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 147264
Business Number: [...]
June 13, 2013
Dear [Client]:
Subject: GST/HST RULING
Application of the GST/HST to [...] Bars
Thank you for your letter of September 4th, 2012, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to [...]([...] [Bars]).
The HST applies in the participating provinces at the following rates: 13% in Ontario, New Brunswick and Newfoundland and Labrador, 14% in Prince Edward Island (effective April 1, 2013) and 15% in Nova Scotia. The GST applies in the rest of Canada at the rate of 5%.
Effective April 1, 2013, the 12% HST in British Columbia will be replaced by the 5% GST and a provincial sales tax.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
Statement of Facts
We understand from telephone conversations, the product labelling, and web content that:
1) [The Bars] lists its ingredients as: [...]
2) In addition to the listed elements, the [Bars] also contains elements of milk.
3) Each container of the [Bars] contains approximately [#] bars.
4) The bars are approximately [...] inches wide and [...] to [...] inches long and are packaged in a [...] container. The bars are not individually wrapped.
5) The bars are soft and pliable in nature with fruits, nuts, and seeds, intermixed with oats and flours. The bars have a muffin or cookie-type consistency or texture.
6) The bars are sold in the baked goods area of the store.
Ruling Requested
You would like to know if the GST/HST applies to a supply of [Bars].
Ruling Given
Based on the facts set out above, we rule that a supply of [Bars] is zero-rated for GST/HST purposes pursuant to section 1 of Part III of Schedule VI to the ETA.
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
Paragraph 1(h) of Part III of Schedule VI to the ETA excludes from zero-rating granola products, but not including any product that is sold primarily as a breakfast cereal. Given its characteristics, we do not consider the [Bars] to be a granola product; therefore, it is not excluded from zero-rating under paragraph 1(h) of Part III of Schedule VI to the ETA.
Paragraph 1(m) of Part III of Schedule VI to the ETA excludes from zero-rating cakes, muffins, pies, pastries, tarts, cookies, doughnuts, brownies, croissants with sweetened filling or coating, or similar products where, (i) they are prepackaged for sale to consumers in quantities of less than six items each of which is a single serving, or (ii) where they are not prepackaged for sale to consumers and are sold as single servings in quantities of less than six, but not including bread products, such as bagels, English muffins, croissants or bread rolls, without sweetened filling or coating.
[The Bar] is a cookie/muffin like product that has many of its ingredients processed to the extent that they are no longer identifiable within the product as a whole. It is our position that [the Bar] [is] considered to be [a] similar [product] for the purpose of paragraph 1(m). As [...] [the Bars] are sold in containers that hold approximately [#] unwrapped bars, the exclusionary provisions of paragraph 1(m) do not apply.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 905-721-5222. 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,
David Nichol
Basic Groceries and POS Rebates Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
Email this Content