20 August 2002 GST/HST Interpretation 41590 - Effective Date of Ruling of Snack Food

Dear XXXXX:

Thank you for your letter of XXXXX, concerning the effective date of application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to supplies of XXXXX manufactured by XXXXX.

On XXXXX the CCRA revoked its original ruling and indicated that the XXXXX product would be subject to the GST/HST at a rate of 7 per cent (or 15% HST as applicable) effective XXXXX because it is similar to snack foods described under paragraph 1(f) of Part III of Schedule VI to the Excise Tax Act (ETA). At your request, a second letter was issued by the CCRA on XXXXX postponing the effective date of the ruling on the tax status of XXXXX to XXXXX.

The later effective date was to allow your company to communicate the change to their sales personnel and customers and to update your accounting systems. This date would also allow the retailers of XXXXX to update their systems and make any appropriate changes to their shelf pricing and/or bar coding systems.

Therefore, notwithstanding that the CCRA clarified the tax treatment of such snack foods in Policy Statement P-241: Meaning of "Other Similar Snack Food" Under Paragraph 1(f) of Part III of Schedule VI to the Excise Tax Act (ETA), issued subsequent to our correspondence to you on XXXXX, it is our view that the effective date of XXXXX, communicated in our response issued XXXXX provided sufficient time to implement the system changes required.

We would also advise that any determination of the tax status of another product and any effective date with respect to that determination do not have a bearing on the tax status of XXXXX. The confidentiality provisions of the ETA prevent me from disclosing information about specific cases.

As previously agreed to by all parties involved, the effective date that supplies of XXXXX are taxable at 7% GST (or 15% HST as applicable) on the value of consideration is XXXXX.

I appreciate the opportunity to address your concerns.

Yours truly,

J. Sitka
Director
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate