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: 135640
Business Number: […]
June 26, 2012
Dear [Client]:
Subject: GST/HST RULING
[…][University] meal plans
Thank you for your letter of [mm/dd/yyyy], concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to meals, food and beverages sold at […] (the University). We apologize for the delay in responding to this enquiry.
HST applies at the rate of 15% in Nova Scotia, 13% in Ontario, New Brunswick, and Newfoundland and Labrador, and 12% in British Columbia. GST applies at the rate of 5% in the remaining provinces and territories.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
STATEMENT OF FACTS
From your letter, our telephone conversations and the University’s Web site ([…]) we understand the following
1. The University was created under […]. It offers […]. It is therefore a “university” as that term is defined in the ETA.
2. The University is registered for purposes of the GST/HST effective [mm/dd/yyyy] with GST/HST account number […].
3. The University currently has a student body of [#] undergraduate students, with a capacity of [#] students.
4. […][Direct quote]
5. […][Direct quote].
6. For the [yyyy-yyyy] academic year you expect that the University’s meal plan will cover 228 days of meals for residential students. […].
7. The average cost of a meal at the University is $[…].
8. The University charges $[…] for a […][meal plan A]. The [meal plan A] is for a period of 228 days (or 32.5 weeks). The student is able to acquire three meals per day for seven days a week with the [meal plan A].
9. The University also offers a […][meal plan B] for $[…] and is considering offering a […][meal plan C] for $[…]. The [meal plan B] is for a period of 228 days (or 32.5 weeks) and allows the student to have 11 meals a week. The [meal plan C] would also be for a period of 228 days (or 32.5 weeks) and would allow the student to have 16 meals a week.
10. […]
11. […] [in] the cafeteria there is what you refer to as a “general store”. Food and beverages included in the general store are items that are not allowed to be purchased on the meal plan card.
12. A student is unable to use the meal plan to make any purchases off campus or to purchase any non-food, confectionary or vending machine items.
13. The general store is operated by the same person that operates the cafeteria. The general store does not have a dedicated cash register. However, sales from the general store are coded differently in the cash register from the sales in the cafeteria food line. The University is able to separate the sales from the general store from the sales in the cafeteria food line. All items sold in the general store are stored on site.
14. Many of the University’s students need or prefer to prepare their own meals, for reasons such as food allergies, vegetarian and vegan diets, or specialized diets.
15. Many of the University’s students have to, by necessity, eat meals outside of the hours of the cafeteria. […].
16. You have provided us with the following list of food and beverages that are sold in the general store: […]
RULING REQUESTED
You would like to know
1. If the University’s meal plans are HST exempt, and
2. If the University allows students to use their meal plan to purchase the food and beverages listed in fact #16 at the cafeteria’s general store will this have any impact on the GST/HST status of the meals under the meal plans?
RULING GIVEN
Based on the facts set out above, we rule that the [meal plan A], [meal plan B] and the [meal plan C] met all the conditions outlined in section 13 of Part III of Schedule V, and therefore supplies of meals under these meal plans are exempt.
We further rule that a meal plan that allows students to make purchases from the general store would not meet the requirements of section 13 of Part III of Schedule V and therefore meals supplied under this type of plan would not be exempt of the HST.
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
[meal plan A], [meal plan B], and the [meal plan B]
Section 13 of Part III of Schedule V exempts the following supply:
A supply of a meal to a student enrolled at a university or public college where the meal is provided under a plan that is for a period of not less than one month and under which the student purchases from the supplier for a single consideration only the right to receive at a restaurant or cafeteria at the university or college not less than 10 meals weekly throughout the period.
Therefore, meals provided to a student under a meal plan that meets all of the following conditions (herein after referred to as a “qualifying meal plan”) are exempt under section 13 of Part III of Schedule V to the ETA:
* The meals are provided to a student enrolled at the university or public college who lives either on-campus or off-campus.
* The student pays a single consideration for the plan.
* The single consideration is sufficient for the student to receive at least 10 meals each week for the period of the plan.
* The plan is for a period of at least one month.
* The meals are served only at an on-campus restaurant or cafeteria (i.e., on the property of the university or public college). A private operator may own or operate the restaurant or cafeteria where the meals are served provided it is on campus.
* The meal plan does not allow purchases at any off-campus eating establishment (e.g., restaurant or fast-food outlet).
* The meal plan does not allow purchases at a mini-mart or convenience store (located on or off-campus).
* The meal plan does not allow purchases of non-food or vending machine items.
Based on the information you have provided, the [meal plan A], [meal plan B] and the [meal plan C] meet all the conditions in section 13 of Part III of Schedule V. Therefore they are qualifying meal plans and meals supplied under these meal plans are exempt.
General Store
Meals provided under a meal plan that does not meet all of the conditions in section 13 of Part III of Schedule V are generally taxable. One of the conditions of a qualifying meal plan is that it does not allow purchases at a mini-mart or convenience store, including a general store such as you have described. Therefore, a meal plan that allows students to make purchases from the general store would not meet the requirements of section 13 of Part III of Schedule V and meals supplied under this type of plan would not be exempt of the HST.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-4206. 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,
Carol A Gaudet
Charities, Non-Profit Organizations and Educational Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
Email this Content