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
Attention: XXXXX
XXXXX XXXXX
Case Number: 116223
July 22, 2009
Subject:
_GST/HST Interpretation
Importation of XXXXX
Dear XXXXX:
Thank you for your XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to importation of XXXXX.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
Statement of Facts
XXXXX is XXXXX snack and baked goods manufacturer and distributor headquartered XXXXX. XXXXX is the manufacturer of XXXXX (The Product).
The Product is a baked salty crunchy snack made from pita bread and is available in XXXXX flavours. The Product is packaged in an XXXXX gram bag for retail sale.
The sample of the Product received by your office is XXXXX flavoured. According to the sample's label, the Product's ingredients are wheat flour, vegetable oil, salt, XXXXX XXXXX, 1% yeast.
The results of a laboratory analysis show that the composition of the Product consists of a crisp, beige-coloured, triangular-shaped pita with a greasy feel. The Product contains over 25% wheat by weight and is leavened by yeast.
According to XXXXX website XXXXX the Product's marketing message is:
XXXXX
The Product has been imported into Canada and your office is processing an Adjustment Request related to the Product's tariff classification. The Product is classified under tariff item 1905.90.43. Tariff item 1905.90.43 is described "other biscuits" containing 25% or more by weight of wheat, in packages of a weight not exceeding 1.36 kg each.
Ruling Requested
You would like to know whether the GST/HST applies on the importation of the Product.
Ruling Given
Based on the facts set out above, we rule that the importation of the Product 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(f) of Part III of Schedule VI excludes supplies of "(f) chips, crisps, puffs, curls or sticks (such as potato chips, corn chips, cheese puffs, potato sticks, bacon crisps and cheese curls), other similar snack foods or popcorn and brittle pretzels, but not including any product that is sold primarily as a breakfast cereal;" from zero-rating
GST/HST Memoranda Series 4.3, Basic Groceries outlines factors that are used to determine if a particular product is similar to a chip, crisp, puff, curl or stick as described under paragraph 1(f) of Part III of Schedule VI. These factors include the properties of the product (ingredients, flavours, texture, cooking process and appearance), its labelling, its packaging, and its marketing.
The Product in this case is considered to be a "similar snack food" for purposes of paragraph 1(f) of Part III of Schedule VI. The Product is comprised of thin, crispy triangular shaped bite-size pieces of pita bread with an oily surface which is available in some flavours similar to products enumerated in paragraph 1(f). The Product is packaged loosely in a plastic bag and is marketed as a snack. All of these factors combined lead to the conclusion that the Product is considered to be a "similar snack food" for purposes of paragraph 1(f) of Part III of Schedule VI. As such, the Product is excluded from section 1 of Part III of Schedule VI and is therefore, a taxable supply subject to the GST at 5% or HST at 13% as applicable.
It should be noted that no one factor is determinative of the tax status of a product and changes in the labelling, packaging and/or marketing (e.g., a change in the product name or varieties offered) would not necessarily result in a different tax status. All factors must be considered in determining whether a product falls within paragraph 1(f) of Part III of Schedule VI.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-952-4294.
Yours truly,
Donato Licursi
Border Issues Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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