18 May 2005 GST/HST Interpretation 60096 - Proof of delivery to a reserve

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 fax XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to supplies of glycerine.

All legislative references are to the Excise Tax Act (ETA) and the regulations therein, unless otherwise specified.

Statement of Facts

Our understanding of the facts is as follows:

1. XXXXX.

2. XXXXX.

3. The Product is sold in the Health and Body Care Department of the Company's retail store. In mainstream retail stores, it is sold in the Vitamins and Supplements or Cosmetic sections.

4. The Company's vendor charges GST on the Product, and the Company has been charging GST on the Product.

5. The Product can be used in food as an ingredient (e.g. low calorie baking), in cosmetics as a moisturizer, and in personal care preparations (e.g. soaps).

Ruling Requested

You would like to know whether GST/HST applies to the sale of the Product.

Ruling Given

Based on the facts set out above, we rule that supplies of the Product will be subject to GST/HST at 7%/15%.

This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Goods and Services Tax Rulings. We are bound by this ruling provided that none of the above issues is 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, a taxable supply made in Canada is subject to tax at 7% (or 15% if the supply is made in one of the participating provinces of Nova Scotia, New Brunswick, and Newfoundland and Labrador), pursuant to section 165 of the ETA, unless the supply is zero-rated. Zero-rated supplies are included in Schedule VI to the ETA.

Glycerine, also called glycerol, is an alcohol that is used in cosmetics, personal care products, pharmaceutical products, dietary supplements and foods.

Alcohols, including glycerine, are not zero-rated as ingredients for basic groceries under section 1 of Part III of Schedule VI to the ETA.

Therefore, supplies of glycerine are subject to tax at 7% (15% in a participating province).

For your convenience, find enclosed a copy of GST/HST Memorandum 1.4, Goods and Services Tax Rulings.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (613) 957-8253.

Yours truly,

Jacqueline Russell
Goods Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate

2005/04/21 — RITS 49665 — Application of GST/HST to Charity's Operations