30 March 2000 GST/HST Interpretation 30251 - Beverage Case #30251

I have reviewed the documents that were forwarded to the Goods Unit for comment concerning XXXXX beverage.

As discussed during our telephone conversation of March 29, 2000, XXXXX is a beverage made from a blend of fruit and vegetable juices. The fruit juice makes up approximately 7% by volume and the vegetable juice (mostly carrot) makes up approximately 19% by volume.

Pursuant to paragraph 1(d) of Part III of the ETA, non-carbonated fruit juice beverages are zero-rated only where they contain more than 25% by volume of a natural fruit juice or combination of natural fruit juices (in their original or reconstituted state).

XXXXX is considered a fruit juice beverage by virtue of the 7% fruit juice content. As such, XXXXX must meet the requirements of paragraph 1(d) in order to have zero-rated status under the ETA. As XXXXX does not meet the 25% fruit juice requirement of paragraph 1(d), all supplies of XXXXX are taxable at 7% (15% in harmonized provinces). The tax status of XXXXX does not change depending on the size of the serving nor if sold in multiple servings (caselots).

Although XXXXX contains both fruit and vegetable juice, only the fruit juice content is relevant for the purposes of paragraph 1(d).

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