Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.
Excise and GST/HST Rulings
Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
XXXXX
XXXXX
XXXXX
Case Number: 108503
Business Number: XXXXX
Attention: XXXXX
November 13, 2008
Subject:
GST/HST RULING
XXXXX
Dear XXXXX:
Thank you for your letter XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) XXXXX (the Product).
HST applies at the rate of 13% in the participating provinces of Nova Scotia, New Brunswick and Newfoundland and Labrador. 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
Our understanding of the facts is as follows:
1. The Product is a XXXXX
2. The Product is currently available in XXXXX varieties: XXXXX.
3. Each package contains XXXXX individually wrapped bars, each weighing XXXXX grams. They are also available in a XXXXX club pack.
4. The Product is shelved in the freezer case of the supermarket. Consumers must either heat them in a toaster oven or defrost them in the refrigerator before eating.
5. The Products ingredients are as follows:
XXXXX.
6. An Information Sheet with the ruling request provides (in part) the following:
XXXXX.
XXXXX.
XXXXX.
7. XXXXX web site XXXXX) provides (in part) the following information on the Product:
XXXXX
8. The package containing XXXXX of the Product gives specific heating instructions for thawed and frozen Product. XXXXX. XXXXX.
Ruling Requested
You would like to know how the GST/HST applies to supplies of the Product?
Ruling Given
Based on the facts set out above, we rule that supplies of the Product are zero-rated (taxable at 0%) pursuant to section 1 of Part III of Schedule VI.
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
Generally, every recipient of a taxable supply made in Canada shall pay tax calculated at the rate of 5% on the value of the consideration for the supply (13% in the participating provinces of Nova Scotia, New Brunswick, and Newfoundland and Labrador) unless the supply is zero-rated, pursuant to subsection 165(3). The tax rate in respect of a zero-rated supply is 0%, where a zero-rated supply is a supply that is included in Schedule VI.
Under Part III of Schedule VI, certain supplies of basic groceries are zero-rated. 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 mixed with or used in the preparation of such food or beverages, other than supplies included in paragraphs (a) to (r) of that section.
Under paragraph 1(m) of Part III of Schedule VI, the following products are excluded 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) 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.
XXXXX is a bread product under paragraph 1(m) of Part III of Schedule VI. This paragraph allows bread products to remain a basic grocery product and thus be zero-rated, when it has no sweetened filling or coating.
The filling in the Product consists of XXXXX. However, the ingredients added to the XXXXX do not alter the XXXXX to the extent that it becomes a sweetened filling. As the Product is a bread product, such as bagels, English muffins, croissants or bread rolls without a sweetened filling or coating, it will not be excluded from zero-rating by paragraph 1(m).
Please note that the above ruling applies to the XXXXX flavours as described above. The application of the GST/HST to other flavours will be dependent on an analysis of the specific product and the result may differ from this ruling.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (613) 954-5124. 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,
Nancy Jardine
Goods Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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