17 November 2006 GST/HST Interpretation 78773 - PROPOSED LAW/REGULATION Supplies of Publications with CDs

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 XXXXX by your client XXXXX.

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

Statement of Facts

We understand that XXXXX is a non-resident company and is registered for GST/HST purposes. Its parent company has been involved in the research and development of XXXXX. The following products have been commercialized for use in XXXXX:

•   XXXXX

These products are sold in Canada and are feed-grade XXXXX. These products are registered under the Feeds Act in Canada. The sample labels included with your fax indicate that XXXXX is sold in a XXXXX kg bag and has a Canadian registration number XXXXX; XXXXX is sold in a XXXXX kg bag and has a Canadian registration number XXXXX; and XXXXX is sold in a XXXXX kg bag and has a Canadian registration number XXXXX.

XXXXX has been collecting GST on the sale of these products in Canada.

Ruling Requested

What is the appropriate application of GST to the above-noted products?

Ruling Given

Based on the facts set out above, we rule that supplies in Canada of XXXXX are taxable at 6% GST (or 14% HST as applicable) pursuant to section 165.

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, every recipient of a taxable supply made in Canada shall pay tax calculated at the rate of 6% on the value of the consideration for the supply (14% in the participating provinces of Nova Scotia, New Brunswick, and Newfoundland and Labrador) unless the supply is zero-rated. Zero-rated supplies are included in Schedule VI. The tax rate in respect of a zero-rated supply is 0%.

As you are aware, Part IV of Schedule VI provides that certain agriculture and fishing supplies are zero-rated. Section 10 of Part IV of Schedule VI, zero-rates supplies of prescribed property. Subsection 1(2) of the schedule to the Agriculture and Fishing Property (GST/HST) Regulations (the Regulations) prescribes:

Feed, when sold in bulk quantities of at least 20 kg (44 lbs) or in bags that contain at least 20 kg (44 lbs), that

(a) is a complete feed, supplement, macro-premix, micro-premix, or mineral feed (other than a trace mineral salt feed), all as defined in the Feeds Regulations, 1983,

(b) is labelled in accordance with those Regulations, and

(c) is designed for

(i) a single species or class of farm livestock, fish or poultry ordinarily raised or kept to produce, or to be used as, food for human consumption or to produce wool, or

(ii) rabbits.

The Feeds Act and Regulations, 1983 is administered by the Canadian Food Inspection Agency (CFIA). The determination of whether a particular product is a complete feed, supplement, macro-premix, micro-premix, or mineral feed for purposes of subsection 1(2) of the Regulations is made by the CFIA. The registration number assigned to a product by the CFIA indicates the type of species the product is for as well as the type of feed. Based on the registration numbers for each of the three products noted above, these products are multiple species single ingredient feeds. As such, subsection 1(2) of the Regulations is not applicable to supplies of XXXXX.

Since there are no other provisions in the Regulations to prescribe these three products and there are no other zero-rating provisions that apply to supplies of these products, supplies in Canada of XXXXX are taxable at 6% GST (or 14% HST as applicable) pursuant to section 165.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-5124.

Yours truly,

Cheryl McKenzie
Goods Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate

2006/11/09 — RITS 79926 — [Designation as Hospital Authority]