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: 58162r
Business Number: XXXXX
Attention: XXXXX
XXXXX
July 17, 2008
Subject:
GST/HST RULING
Application of the GST/HST to fungicides
Dear XXXXX:
XXXXX.
All legislative references are to the Excise Tax Act (ETA) and the regulations thereunder, unless otherwise specified.
XXXXX, you requested rulings regarding five fungicide products for which you provided product labels. These products were: XXXXX. You also requested clarification of the definition of "agricultural use" with respect to pesticides.
XXXXX.
XXXXX.
Statement of Facts
Our understanding of the facts is as follows:
1. XXXXX sells and imports the following fungicides. XXXXX, you provided the product labels and additional information for each of the product's registered use as follows:
• XXXXX - Registered under the Pest Control Products Act, Registration No. XXXXX. The product label shows a product class designation of XXXXX.
• XXXXX - Registered under the Pest Control Products Act, Registration No. XXXXX. The product label shows a product class designation of XXXXX.
• XXXXX - Registered under the Pest Control Products Act, Registration No. XXXXX. The product label shows a product class designation of XXXXX. The pamphlet for this product provides instruction for use on XXXXX.
• XXXXX - Registered under the Pest Control Products Act, Registration No. XXXXX. The product label shows a product class designation of XXXXX. XXXXX is a XXXXX concentrate for managing growth of XXXXX.
• XXXXX - Registered under the Pest Control Products Act, Registration No. XXXXX. The product label shows a product class designation of XXXXX.
2. The current product labels for these fungicide products state the same intended use, with the exception XXXXX. The current product label for XXXXX states that it is for control of XXXXX.
Ruling Requested
Are supplies of XXXXX taxable for GST/HST purposes?
Ruling Given
Based on the facts set out above, we rule that supplies of the products noted above are zero-rated.
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
Section 10 of Part IV of Schedule VI provides that a supply of prescribed property is zero-rated. Section 2 of the Agriculture and Fishing Property (GST/HST) Regulations (the Regulations) provides that property listed in the Schedule, when supplied by way of sale, is prescribed property for the purposes of section 10.
Subsection 1(4) of the Schedule to section 2 of the Regulations provides that pesticides labelled in accordance with the Pest Control Products Regulations as having a purpose that includes agricultural use and a product class designation other than "Domestic" are prescribed property and therefore zero-rated.
With respect to the phrase "that includes agricultural use", the term "agricultural" is not defined in the ETA. XXXXX, it is our current position that the common meaning of "agriculture" does include horticulture. Further, the provision indicates the use is to "include" agricultural use. Pesticides may be labelled as having a purpose that includes more than one use. Provided one of the uses is considered to be agricultural use, the pesticide will be considered to meet this criterion.
Therefore, the supply of pesticides labelled in accordance with the Pest Control Products Regulations as having a purpose that includes agricultural use (including horticulture) and a product class designation other than "Domestic" (e.g., Commercial) are zero-rated.
The CRA recently issued GST/HST Info Sheet GI-048, Fertilizer and Pesticides. This publication includes general information on the tax status of fertilizers and pesticides. A copy is enclosed.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly XXXXX. 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,
XXXXX
Goods Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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