25 July 2000 GST/HST Interpretation 25831 - The Application of the GST/HST to Phenylacetic Acid

Dear XXXXX:

Thank you for your facsimile of January 14, 2000, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to phenylacetic acid, classified under statistical suffix 2916.34.00.00 of the Customs Tariff.

Phenylacetic acid would not be considered a 'basic grocery' pursuant to Part III of Schedule VI to the Excise Tax Act. As such, supplies of phenylacetic acid would be taxable at 7% GST (or 15% HST where applicable).

Our research indicates that phenylacetic acid is not an approved additive for use in food for human consumption although it is permitted for limited use in feed for farm livestock.

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/HST Memoranda Series, do not bind the Canada Customs and Revenue Agency (CCRA) with respect to a particular situation.

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

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-9218.

Yours truly,

Kevin W. Smith
Goods Unit
Excise and GST/HST Rulings Directorate