10 December 2007 GST/HST Ruling 98191 - XXXXX Crackers

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 concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the supply of XXXXX Crackers.

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

Effective January 1, 2008, the rate of the GST will be reduced from 6% to 5% and the rate of the HST from 14% to 13%. The new rates will apply to supplies for which the GST/HST is paid on or after January 1, 2008, without having become payable before that date. Specific transitional rules will apply to certain supplies, for example, real property. For more information on the transitional rules for the reduction of the GST/HST rate, please refer to GST/HST Notice 226, Proposed GST/HST Rate Reduction in 2008 on the CRA Web site at www.cra-arc.gc.ca/E/pub/gi/notice226/README.html.

Statement of Facts

Our understanding of the facts is as follows:

1. XXXXX in the line of products known as XXXXX. This product line has products sold in boxes of XXXXX – XXXXX. Currently, this product line has a number of cookies marketed in this format.

2. The subject of this ruling request is XXXXX Crackers (the Product).

3. The Product is a baked, XXXXX flavoured, XXXXX cracker.

4. The Product ingredients include: XXXXX.

5. Each box of the Product will contain XXXXX bags. The Product is substantially the same product as the base XXXXX product that is sold in a XXXXX gram box.

6. The Web site for XXXXX promotes the original XXXXX

7. XXXXX believes the Product should be shelved in the cracker section of a supermarket, XXXXX

Ruling Requested

XXXXX believes that, as the crackers in this Product are substantially the same as in the base XXXXX product, the Product should be zero-rated. You have asked that we confirm this.

Ruling Given

Based on the facts set out above, we rule that supplies of the Product are zero-rated under section 1 of Part III of Schedule VI.

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.

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

Yours truly,

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

2007/12/10 — RITS 97535 — Application of GST/HST to Products Sold by XXXXX