26 April 2000 GST/HST Interpretation 30628 - Supplies of

Thank you for the additional information provided at our March 15th, 2000 meeting concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to supplies of XXXXX[.]

Interpretation Requested

Are supplies of XXXXX in their natural state or treated for seeding purposes taxable at 7% (15% in harmonized provinces) or are they zero-rated under Part IV of Schedule VI of the Excise Tax Act (ETA).

Interpretation Given

Generally, every recipient of a taxable supply made in Canada shall pay to Her Majesty in right of Canada, tax in respect of the supply calculated at the GST rate of 7% (or the HST rate of 15%) on the value of the consideration for the supply (subsections 165(1) and (2) of the ETA). Where however, a supply is a zero-rated supply, the tax rate in respect of that supply is 0% (subsection 165(3) of the ETA).

In accordance with section 2 of Part IV of Schedule VI of the ETA, agricultural quantities of seeds used for planting are zero-rated if they are ordinarily used as, or to produce, food for human consumption or feed for farm livestock or poultry.

XXXXX XXXXX

Based upon the great diversity of uses for XXXXX, we believe that XXXXX seed is not ordinarily used as, or to produce, food for human consumption or feed for farm livestock. Therefore, supplies of XXXXX seeds are taxable at 7% (15% where applicable).

The foregoing comments represent our general views with respect to the subject. These comments are not a ruling 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 952-9218.

Yours truly,

Kevin W. Smith
Goods Unit
General Operations and Border Issues Division
Excise & GST/HST Rulings Directorate