16 December 2004 GST/HST Ruling 52601 - GST/HST Treatment of Various Health-related Products

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.

Dear XXXXX:

Thank you for your letter XXXXX, with attachments, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the supply of various diet and anti-smoking products. As indicated in your conversation with Donna Harding, Manager of the Goods Unit, the status of XXXXX will be addressed in a separate letter.

Statement of Facts

Our understanding of the facts is as follows:

1. XXXXX (Product A).

•   Product A is available in caplet form and is packaged in boxes containing XXXXX caplets.

•   Each caplet contains: XXXXX.

•   The packaging includes the following statements: XXXXX.

•   The directions for use are: XXXXX

2. XXXXX (Product B).

•   Product B is available as a box containing one container of XXXXX caplets and one container of XXXXX caplets.

•   XXXXX and XXXXX are both multi-vitamins/minerals and they both have DIN numbers.

•   The outer packaging includes the following statements: XXXXX.

•   The directions for use are: XXXXX.

3. XXXXX (Product C).

•   Product C is a kit comprised of an XXXXX.

•   The XXXXX vitamin and mineral supplements are in tablet form XXXXX.

•   Product packaging includes the following statement: XXXXX.

Ruling Requested

You have requested a ruling concerning the application of the GST/HST to the supply of Products A, B and C.

Ruling Given

Based on the facts set out above, we rule that the supply of Products A, B and C is taxable at 7% GST or 15% HST, as applicable, pursuant to section 165 of the Excise Tax Act (ETA).

This ruling is subject to the general limitations and qualifications outlined in section 1.4 of Chapter 1 of the GST/HST Memoranda Series. We are bound by this ruling provided that none of the above issues is currently under audit, objection, or appeal; that there are no relevant changes in the future to the ETA, or to our interpretative policy; and that you have fully described all necessary facts and transaction(s) for which you requested a ruling.

Explanation

Taxable supplies of goods and services made in Canada are generally subject to tax at 7% GST or 15% HST, as applicable. However, "zero-rated" supplies of goods and services are subject to tax at 0%. A zero-rated supply is any supply included in Schedule VI to the ETA.

Section 1 of Part III of Schedule VI to the ETA zero-rates supplies of food or beverages for human consumption and sweetening agents, seasonings and other ingredients mixed with or used in the preparation of such food or beverages, unless one of the exclusions set out in paragraphs 1(a) through 1(r) applies.

Vitamins and minerals in pill, capsule and tablet form are not considered to be food, beverage or ingredients for human consumption and are therefore, not within the scope of section 1 of Part III of Schedule VI to the ETA. As a result, Products A and B are taxable at 7% GST or 15% HST, as applicable.

Product C is a kit containing XXXXX. As the kit does not fall under any zero-rating provisions it is taxable at 7% GST or 15% HST, as applicable.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-9585.

Yours truly,

Nicole Thomas, CMA
Goods Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate

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