13 February 2008 GST/HST Interpretation 96408 - Application of GST/HST to charter vehicle trips

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

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

Effective January 1, 2008, the rate of the GST has been reduced from 6% to 5% and the rate of the HST from 14% to 13%. The new rates 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 .

You are requesting an interpretation in respect of paragraph 10 of the "GST/HST Memoranda Series 4.4, Agriculture and Fishing", which reads as follows:

"10. In consultation with the seed industry, the Canada Revenue Agency has developed guidelines to determine where seeds are supplied in a quantity larger than that ordinarily sold or offered to consumers. The guidelines are based on the size of the seed. Small seeds supplied in packages of a quantity exceeding 125 g and large seeds in quantities exceeding five kg are zero-rated. Large seeds include peas, corn and beans. When small seeds are supplied on a count basis, they are zero-rated when supplied in quantities exceeding 2500 seeds. When large seeds are supplied on a count basis, they are zero-rated when supplied in quantities exceeding 20,000 seeds."

Interpretation Requested

What is CRA's interpretation of the terms "large seeds" and "small seeds", as these terms are used in paragraph 10 of the "GST/HST Memoranda Series 4.4, Agriculture and Fishing".

Interpretation Given

"Large seeds" as the term is used in paragraph 10 of the "GST/HST Memoranda Series 4.4, Agriculture and Fishing" refer to seeds of peas, corn and beans only. Any other type of seed is considered a "small seed" for the purposes of that publication. XXXXX.

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.

Yours truly,

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

2008/02/12 — RITS 96726 — Paragraph 97 of GST/HST Memorandum 4.3, Basic Groceries