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: 111589Business Number: XXXXX
Attention: XXXXX
March 2, 2009
Subject:
GST/HST RULING
XXXXX
Dear XXXXX:
Thank you for your letter of XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the 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 currently is available in the following varieties:
• XXXXX
• XXXXX
• XXXXX
2. The Product is a fresh, chilled prepared XXXXX salad. Each unit is XXXXXg and comes in a XXXXX with XXXXX sealed components comprised of XXXXX and XXXXXg XXXXX, as well as dressing and toppings. The Product arrives and is sold to the consumer fresh. The consumer simply needs to mix and consume.
3. The Product is called a XXXXX. The marketing information in the submission and on the web site XXXXX refers to the Product as XXXXX salad.
4. The submission came with directions for consumption, XXXXX. XXXXX.
5. The ingredients for the XXXXX are as follows: XXXXX.
7. The ingredients for the XXXXX are as follows: XXXXX.
8. The ingredients for the XXXXX are as follows: XXXXX.
9. The product will be sold in large grocery chain stores and must be refrigerated. The recommended merchandising location of the Product is near the deli section.
10. The submission contained information regarding marketing of the Product, which was as follows:
XXXXX
XXXXX
11. A sample Product was purchased for examination. All Product information was printed on the XXXXX The front of the XXXXX contained the Product name, a picture of the Product, as well as the following information:
• XXXXX
• XXXXX
• XXXXX
• XXXXX
• XXXXX
• XXXXX
• XXXXX
12. One of the end panels contained the ingredients and the following wording: XXXXX
13. The back of the XXXXX contained the Nutrition Facts and Preparation Instructions as given above in bullet number.
14. You are of the opinion that the Product is similar to lunch and snack combinations which are discussed in paragraphs 165 to 176 of GST/HST Memoranda Series 4.3 Basic Groceries. These products generally do not fall within any of the exclusionary paragraphs 1(a) through (r) of Part III of Schedule VI and are thus zero-rated.
Ruling Requested
You would like to confirm the position that the Product is not a product which would be excluded from zero-rating by any of paragraphs (a) to (r) of section 1 of Part III of Schedule VI, but would be zero-rated under section 1 of that same Part and Schedule.
Ruling Given
Based on the facts set out above, we rule that supplies of the Product are zero-rated supplies (taxable at 0%) pursuant to subsection 165(3) and 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.
The tax rate in respect of a zero-rated supply is 0%. Taxable supplies that are zero-rated for GST/HST purposes are described 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. Paragraph (o.1) excludes supplies of salads not canned or vacuum sealed from zero-rating.
The Canada Revenue Agency's position on basic groceries is set out in GST/HST Memoranda Series 4.3 Basic Groceries. Paragraphs 104 to 109 of this publication outline how the GST/HST applies to salads. Paragraph 105 explains the meaning of salad. Salads are considered to include ingredients such as chopped, shredded, diced, sliced, or pureed vegetables, meat, fish, egg, or other food supplied with a dressing and/or seasoning(s), whether or not the dressing is mixed with the other ingredients. A combination of one ingredient mixed with a dressing or seasoning(s) that is sold or represented as a salad is also considered to be a salad. Fruit salads and gelatine salads generally do not need a dressing to be considered a salad.
The Product is called a XXXXX in English and XXXXX in French. The marketing information in the submission and on the web site refers to the Product as XXXXX. As the Product is comprised of a number of ingredients that are either diced, chopped or bite size in shape and, as it comes with a dressing that is to be mixed with these ingredients, the Product is a salad. As provided in the facts, the Product is vacuum sealed. As the Product is a salad which is vacuumed sealed, it will not be excluded by paragraph 1(o.1) of Part III of Schedule VI.
As the Product is a food that is not included in any of paragraphs (a) to (r) of section 1 of Part III of Schedule VI, supplies of the Product are zero-rated under section 1 of the same Part and Schedule.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 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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