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
Business Number: XXXXX
Case Number: 114111
Attention: XXXXX
XXXXX
May 14, 2009
Subject:
GST/HST RULING
Importation of Freeze-Dried Fruit
Dear XXXXX:
Thank you for your XXXXX of XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the importation of freeze-dried fruit.
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
1. XXXXX is an importer of fresh fruit and vegetables and is registered for the GST/HST.
2. XXXXX is in the process of importing freeze-dried fruit (the Product) from XXXXX for human consumption.
3. The Product's ingredients contain 100% fruit with no additives. The fruit is sliced and subsequently freeze-dried. Freeze-drying or sublimation is a method of preserving food by extracting water from food while the food is still in a frozen state.
4. The Product is sealed in individual serving sized bags and labelled as "XXXXX". The Product will be imported in the following formats:
Name
IngredientsSize
XXXXX
XXXXX, no additivesXXXXX grams
XXXXX
XXXXX, no additivesXXXXX grams
XXXXX
XXXXX, no additivesXXXXX grams
XXXXX
XXXXX, no additivesXXXXX grams
XXXXX
XXXXX, no additivesXXXXX grams
XXXXX
XXXXX, no additivesXXXXX grams
XXXXX
XXXXX, XXXXX, no additivesXXXXX grams
Ruling Requested
You would like to know whether the GST/HST applies on the importation of the Product.
Ruling Given
The importation of the Product, in a single fruit format of XXXXX, XXXXX, XXXXX, XXXXX, XXXXX, or XXXXX, is a non-taxable importation for GST/HST purposes pursuant to section 213 and section 6 of Schedule VII. As such, GST/HST Status Code 59 may be used in the relevant Customs documentation to identify the importation as non-taxable for GST/HST purposes.
The importation of the Product in the XXXXX and XXXXX mixed format is a taxable importation for GST/HST purposes.
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, all goods imported into Canada are taxable for GST/HST purposes unless specifically relieved under section 213. Importations of goods relieved of tax under section 213 are set out in Schedule VII.
Section 6 of Schedule VII provides for the non-taxable importation of property that is zero-rated pursuant to section 1 of Part III of Schedule VI.
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 1(l) of Part III of Schedule VI excludes supplies of "fruit bars, rolls or drops or similar fruit-based snack foods" from zero-rating. A good consisting of fruit and at least one other ingredient (such as fruit flavouring), and that can be purchased as a snack, falls within paragraph 1(l).
The Product in a single fruit format of XXXXX, XXXXX, XXXXX, XXXXX, XXXXX, or XXXXX is not excluded by paragraph 1(l) of Part III of Schedule VI and is accordingly zero-rated since the Product does not consist of fruit with an additional ingredient.
Paragraph 1(i) of Part III of Schedule VI excludes from zero-rating snack mixtures that contain cereal, nuts, seeds, dried fruit or any other edible product, but not including any mixture that is sold primarily as a breakfast cereal.
A "snack mixture" is described in GST/HST Info Sheet GI-021, Snack Foods, as a mixture of two or more of the ingredients noted in paragraph 1(i) of Part III of Schedule VI. Further, two or more varieties of the same kind of ingredient, such as two or more varieties of freeze-dried fruit are considered to be snack mixtures.
The supply of the Product in a multiple fruit format is considered a snack mixture. As such, the supply of the Product in the XXXXX and XXXXX mixed format is excluded from zero-rating under paragraph 1(i) of Part III of Schedule VI and is taxable at 5% GST or 13% HST, as applicable. The Product in a single fruit is not considered a snack mixture.
For your convenience, find enclosed a copy of GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-4294. 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,
Donato Licursi
Border Issues Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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