8 December 1999 GST/HST Ruling HQR0001982 - Tax Status of Dietary Food Supplements

Dear XXXXX

This is in reply to your facsimile of October 1, 1999 in which you inquired about the tax status of XXXXX dietary supplement. An enlarged photocopy of the label was included with your facsimile.

Statement of Facts

Our understanding of the facts is as follows:

1. The product's name is XXXXX;

2. The only ingredient is XXXXX[;]

3. The suggested use of XXXXX is: "As a dietary food supplement for adults, take one teaspoon (5 grams) up to three times daily mixed with 8 ounces of water";

4. XXXXX is in powdered form;

5. XXXXX has a warning on the label saying: "Keep out of reach of children".

Ruling Requested

You request a ruling to determine the tax status of XXXXX.

Ruling Given

Based on the facts set out above, we rule that supplies of XXXXX are taxable at the rate of 7% GST and 15% HST (where applicable).

This ruling is subject to the general limitations and qualifications outlined in section 1.4 of Chapter 1 of the GST/HST Memoranda Series. We are bound by this ruling provided that none of the above issues is currently under audit, objection, or appeal; that there are no relevant changes in the future to the Excise Tax Act, or to departmental interpretative policy; and that you have fully described all necessary facts and transaction(s) for which you requested a ruling.

Explanation

When mixed with water, XXXXX is taken to supplement nutritional intake, not drunk for enjoyment or to quench thirst. The fact that there is a suggested daily dosage, and that use of the product is restricted to adults further suggest that XXXXX is not an ingredient into a beverage.

Consequently, the supply of XXXXX is not considered the supply of an ingredient for beverages under Section 1 of Part III of Schedule VI to the Excise Tax Act and therefore, is taxable at the rate of 7% GST, and 15% HST (where applicable).

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at 613-952-9585.

Yours truly,

Roger Tessier, CA
Goods Unit
General Operations and Border Issues Division
GST/HST Rulings and Interpretations Directorate