1 October 1997 GST/HST Interpretation HQR0000252 - GST/HST Status of Game Bird Feed

                                                                        GST/HST Rulings and
 Interpretations Directorate
Place Vanier, Tower C, 10th Floor
25 McArthur Road
Vanier, Ontario
XXXXX                                                                                 K1A 0L5

Dear XXXXX

Thank you for your letter of June 28, 1996 addressed to Serge Bernier concerning whether or not the supply of feed for game birds is subject to the Goods and Services Tax (GST)/Harmonized Sales Tax (HST). Your letter has been forwarded to me for a reply. I apologize for the delay in responding to your letter.

Relevant Facts

A report produced by Agriculture Canada, XXXXX , mentions the following facts with respect to the game bird industry:

 XXXXX game bird chicks hatched on farms are raised for processing for the meat market

 XXXXX game bird chicks are raised for hunting preserves

•   the remaining XXXXX bird chicks are used for other purposes, such as breeding, hobbyists, and conservation

•   the estimated value of the Canadian game bird meat industry was approximately XXXXX

•   from XXXXX game bird slaughter increased by XXXXX , and exports of game bird meat increased XXXXX

Interpretation Requested

You wish know whether the sale of bulk feed for game birds, particularly pheasants, partridge (grouse) and quail, is zero-rated.

Interpretation Given

Subsection 1(3) of the schedule to the Agriculture and Fishing Property (GST/HST) Regulations zero-rates the supply of by-products of the food processing industry and plant or animal products that are ordinarily used as feed, provided the feed meets the following criteria:

a) it is sold in bulk quantities of at least 20 kg (44 lbs) or in bags which contain at least 20 kg (44 lb);

b) it is for farm livestock, or poultry; and

c) the farm livestock or poultry are ordinarily raised or kept to produce, or to be used as, food for human consumption or to produce wool.

Proposed amendments to the regulations would also zero-rate the supply of feed for fish which meet the above criteria, and for ostriches, rheas, emus and bees provided the feed is sold in sufficient quantities.

With respect to the last criterion, in determining whether farm livestock (or poultry) are ordinarily used to produce, or to be used as, food for human consumption, all "uses" of the livestock are considered (i.e. food production, wool production, research, pets, zoos, game farms, etc.). Where livestock is found to have significant other uses, the supply of feed for livestock is subject to GST/HST.

Pheasant and other game birds are considered to have other significant uses since XXXXX of game birds are raised for hunting preserves, and a further XXXXX are used for other, non-food, purposes. On a hunting preserve, an individual pays to have the right to access the property and shoot a bird. Although the individual may choose to use the bird for food, the supply to the hunting preserve of the bird by the farmer is for recreational purposes (i.e. hunting). Thus the supply of feed for pheasants and other game birds is subject to GST/HST.

The Department has been asked by several organizations and individual farmers to reconsider this position, and to zero-rate the supply of feed for game birds. We are currently in the process of reviewing our policy with respect to this matter. At the present time, however, we are bound by the limitations imposed by the Excise Tax Act and the Agriculture and Fishing Property (GST/HST) Regulations. It is within the purview of the Department of Finance to determine whether game bird feed will be zero-rated by adding it to the Agricultural and Fishing Property (GST/HST) Regulations. Finance is aware of your concerns.

I would also like to point out that in your letter, you state that the supply of game birds is zero-rated. This is not entirely correct. The supply of butchered or dressed game bird meat which is to be used as food for human consumption will be zero-rated pursuant to section 1 of Part III of Schedule VI to the Excise Tax Act. As well, the supply of game bird eggs produced for hatching purposes is zero-rated pursuant to section 4 of Part IV of Schedule VI to the Excise Tax Act. However, the supply of live game birds, including day-old chicks, poults and adult birds, is subject to GST/HST.

The foregoing comments represent our general views with respect to the subject matter of your letter. Proposed amendments to the Excise Tax Act, if enacted, could have an effect on the interpretation provided herein. These comments are not rulings and, in accordance with the guidelines set out in section 1.4 of Chapter 1 of the GST Memoranda Series, do not bind the Department with respect to a particular situation.

For your convenience, find enclosed a copy of section 1.4 of Chapter 1 of the GST Memoranda Series.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at 613 954-8253.

Yours truly,

Gregory Smart
A/Rulings Officer
Industries Unit
General Operations and Border Issues Division
GST/HST Rulings and Interpretations Directorate

Encl.

Legislative References: Agriculture and Fishing Property (GST/HST) Regulations, s. 1(3) of schedule

Casework Number: HQR0000252