1 March 1995 GST/HST Interpretation 11845-1[2] - The Application of the Goods and Services Tax to Animal Feeds and Animal Feed Ingredients

Dear XXXXX

This is in response to your letter of March 10, 1995 in which you requested confirmation of the application of the Goods and Services Tax to animal feeds and animal feed ingredients.

Section 10 of Part IV of Schedule VI of the Excise Tax Act provides a tax free status for a supply of prescribed property. The Agriculture and Fishing Property (GST) Regulations lists the prescribed property for purposes of Section 10. Subsection 1(3) of these regulations zero-rates:

"by products of the food processing industry and plant or animal products, when sold in bulk quantities of at least 20 kg (44 lbs) or in bags that contain at least 20 kg (44 lbs) and ordinarily used as feed, or as ingredients in feed, for farm livestock, or poultry described in paragraph (2)(c)".

Paragraph 1(2)(c) zero-rates "feed, when sold in bluk quantities of at least 20 kg (44 lbs) or in bags that contain at least 20 kg (44 lbs), that

(c) is designed

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

(ii) for rabbits.

It is my understanding that "guar gum" is a gum consisting of the ground endosperm of guar seed. Guar is a drought-tolerant legume grown for forage and for its seed that produces a gum used as a thickening agent. I also understand that "gelatin" is animal jelly, a glutinous material obtained from animal tissue by prolonged boiling. Agriculture and Agri-Food Canada have confirmed that both these goods have been cleared as livestock feed.

On the basis of this information, it is the Department's position that "gar gum" and "gelatin" qualify as by-products of plant or animal products and are ordinarily used as feed, or as ingredients in feed and are therefore zero-rated under subsection 1(3) of the Schedule to the Agriculture and Fishing Property (GST) Regulations.

This ruling is given subject to the general limitations and qualifications outlined in the GST Memorandum 100-3. We are bound by this ruling provided that none of the above issues are presently under audit, objection or appeal, there are no relevant changes in the future to the Excise Tax Act, and provided that you fully described all necessary facts and transactions for which you requested a ruling.

Additional information or assistance regarding this matter may be obtained by contacting your District Excise/GST office at:

XXXXX XXXXX
XXXXX
XXXXX
Telephone: XXXXX
Facsimile: XXXXX

Yours truly,

J. A. Venne
Director
Tax Policy - Special Sectors
GST Rulings and Interpretations