1 November 1995 GST/HST Interpretation 11845-2[11] - The GST Status of the Supply of the Product

                                                                        11845-2(MB)
Doc 2497G
Ref: Ss 1(4) of Agri & Fish Regs.

Dear XXXXX

Thank you for your letter and attached information dated October 4, 1995, requesting a written ruling regarding the application of the Goods and Services Tax (GST) to a supply of the pesticide XXXXX[.]

In order for the supply of a pesticide to be zero-rated in accordance with subsection 1(4) of the Schedule of the Agriculture and Fishing Property (GST) Regulations of the Excise Tax Act, it must be labelled in accordance with the Pest Control Products Regulations (PCP) as having a purpose that includes agricultural use and having a product class designation other than "Domestic".

Prior to March 11, 1992, supplies of these pesticides, where the total consideration paid or payable on a single invoice was at least $500.00, were zero-rated. On March 10, 1992, the Minister of Finance announced a change to the Regulations as they apply to supplies of pesticides. Where supplies are delivered after March 10, 1992, the $500.00 criteria no longer applies. Supplies of qualifying pesticides are zero-rated after March 10, 1992 when supplied for any amount of consideration.

Based on the label information provided, XXXXX pest control product XXXXX has a class designation of "Commercial" and is labelled in accordance with the Pest Control Products Regulations. XXXXX is also labelled in accordance with the Pest Control Products Regulations (PCP) as having a purpose that includes: "Contents to be used in repackaging ONLY."

The term "pesticides" is not defined in the Excise Tax Act or the Agriculture and Fishing Property (GST) Regulations. However, for administrative purposes, Revenue Canada is regarding "pesticides" as being "control products", as defined in the Pest Control Products Act, and which are in a form or state that is identical to the product when acquired by the consumer or farmer for application purposes. Accordingly, products labelled as "contents to be used in repackaging ONLY" would normally not be marketed to the farmer in this state.

Revenue Canada, is not in a position to determine if the repackaged product would subsequently meet, when sold, the zero-rating provisions of the Agriculture and Fishing Property (GST) Regulations. These provisions require, in part, that the pesticide have a product class designation other than "Domestic" and that the registered product have a purpose that includes agricultural in its application.

Therefore, based on the above, the supply of XXXXX for purposes of "repackaging ONLY" will be taxable at the general rate of 7 per cent for purposes of the GST.

This ruling is given subject to the general limitations and qualifications outlined in GST Memoranda Series 1.4. 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 have fully described all necessary facts and transactions for which you requested a ruling.

We trust that the above information will be of assistance. If you have further questions on this matter, please contact Michèle Brûlé at (613) 952-9208.

Yours truly

J.A. Venne
Director
Special Sectors
GST Rulings and Interpretations