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.
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Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
Case Number: 122503
Attention: XXXXX XXXXX
July 5, 2010
Dear XXXXX:
Subject:
GST/HST INTERPRETATION
Clarification of qualifying food and beverages for the point-of-sale rebate in Ontario
Thank you for your XXXXX, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the point-of-sale rebate in Ontario on qualifying prepared food and beverages (the Rebate) as outlined in Info Sheet GI-064, Harmonized Sales Tax for Ontario - Point-of-Sale Rebate on Prepared Food and Beverages (GI-064).
HST currently applies at the rate of 13% in Nova Scotia, New Brunswick, and Newfoundland and Labrador. Effective July 1, 2010, HST will apply at the rate of 15% in Nova Scotia, 13% in New Brunswick, Newfoundland and Labrador, and Ontario, and 12% in British Columbia. GST will continue to apply at the rate of 5% in the remaining provinces and territories.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
Interpretations Requested
1. You would like to know how the Rebate applies to prepackaged baked goods where there are less than six single servings of goods in the package which are not individually packaged.
2. You note that GI-064 indicates that a "single serving" of cakes, muffins, pies, pastries, tarts cookies, doughnuts, brownies, croissants with sweetened filling or coating, or similar products means a serving weighing less than 230 grams. However, paragraph 89 of GST/HST Memorandum 4.3, Basic Groceries, also includes as a single serving, "a portion or part of a good noted above when offered for sale as a single serving". Your question is: Is a slice of cake, or similar baked goods weighing 230 grams or more offered for sale as a single serving, considered to be a prepared food for purposes of the Rebate?
Interpretations Given
1. Per GI-064, certain items are qualifying prepared food and beverages only when sold with a qualifying food or beverage item for a single consideration. This includes, in part, "Cakes, muffins, pies, pastries, tarts, cookies, doughnuts, brownies, croissants with sweetened filling or coating, or similar products where they are prepackaged for sale to consumers in quantities of less than six items each of which is a single serving." As a result, where a prepackaged box of five or less doughnuts (each of which is a single serving) is sold with a qualifying food or beverage item, the prepackaged box of five or less doughnuts will be qualifying food items. Please note that in order for the Rebate to be available, these items must be sold for a single consideration, excluding HST, of not more than $4.
2. The term "single serving" is not defined in the ETA. As noted in paragraph 89 of GST/HST Memoranda 4.3, Basic Groceries, the Canada Revenue Agency's administrative definition for a single serving for the purposes of paragraph 1(m) of Part III of Schedule VI, is a good included in that paragraph that is less than 230 grams or a portion or part of a good under this paragraph when offered for sale as a single serving. Goods under this provision include: cakes, muffins, pies, pastries, tarts, cookies, doughnuts, brownies, croissants with sweetened filling or coating, or similar products.
In GI-064, the definition of a single serving of cakes, muffins, pies, pastries, tarts, cookies, doughnuts, brownies, croissants with sweetened filling or coating, or similar products previously indicated that a single serving of such a good equals an amount weighing less than 230 grams. This definition has been amended to include the phrase "or a portion or part of a good in this paragraph when offered for sale as a single serving". As a result, a slice of cake weighing 230 grams or more that is offered for sale as a single serving will not be zero-rated for GST/HST purposes and where the requirements for the Rebate are met it will be considered to be a prepared food for purposes of the Rebate. Please note that in order for the Rebate to be available, the total price, excluding HST, must not be more than $4 for all qualifying prepared food and beverages sold.
The foregoing comments represent our general views with respect to the subject matter of your request. These comments are not rulings and, in accordance with the guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, do not bind the Canada Revenue Agency with respect to a particular situation. Future changes to the ETA, regulations, or our interpretative policy could affect this interpretation.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-952-9585. 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,
Ben Boboski
Goods Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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