Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
GST/HST Rulings Directorate
5th floor, Tower A, Place de Ville
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 246351
Business Number: […]
Dear [Client]:
Subject: GST/HST RULING
Application of GST/HST to pre-cut fresh fruit sold in containers
Thank you for your correspondence of [mm/dd/yyyy], concerning the application of the goods and services tax/harmonized sales tax (GST/HST) to a product referred to by […](the Company) as […] and packaged as […](the Product).
The HST applies in the participating provinces at the following rates: 13% in Ontario; and 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island. The GST applies in the rest of Canada at the rate of 5%.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
STATEMENT OF FACTS
We understand the following:
1. The Company is a Canadian corporation that is registered for GST/HST purposes. […].
2. The Product is prepared and packaged by […] and sold to the Company. The Company sells the Product at the retail level.
3. The Product consists of […][pre-cut fresh fruit].
4. The […][fruits] are peeled, cut into […][pieces] and placed in separate compartments within a clear plastic container.
5. The Product packaging consists of a ridged clear plastic container measuring approximately [#]” x [#]” x [#]” deep with two separate compartments. The lid of the packaging can be opened and closed as needed.
6. The package size is [#] grams […].
RULING REQUESTED
You would like to know whether the supply of the Product is zero-rated under section 1 of Part III of Schedule VI.
RULING GIVEN
Based on the facts set out above, we rule that the supply of the Product is zero-rated under section 1 of Part III of Schedule VI.
EXPLANATION
Generally, in accordance with section 165 of the ETA, every recipient of a taxable supply made in Canada is required to pay GST/HST on the value of the consideration for the supply, unless the supply is zero-rated (listed in Schedule VI to the ETA and subject to the GST/HST at the rate of 0%) or exempt (listed in Schedule V to the ETA and not subject to the GST/HST).
Section 1 of Part III of Schedule VI zero-rates supplies of food or beverages for human consumption (including sweetening agents, seasonings and other ingredients to be mixed with or used in the preparation of such food or beverages) unless an exclusion set out in paragraphs 1(a) through 1(r) applies.
Paragraph 1(o.1) excludes supplies of salads (including fruit salad) not canned or vacuum sealed from being zero-rated. The exclusion under paragraph 1(o.1) only applies if the Product constitutes a salad at the time it is supplied. It is our opinion that the Product does not constitute a salad.
Paragraph 1(o.3) excludes supplies of platters of cheese, cold cuts, fruit or vegetables and other arrangements of prepared food from zero-rating. It is our opinion that the Product is not deliberately configured to create a visual effect so that it appears likely to be served in the same form in which it is sold.
Therefore, as none of the exclusionary paragraphs to section 1 of Part III of Schedule VI apply, the supply of Product is zero-rated.
DISCLAIMER
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1-4, Excise and GST/HST Rulings and Interpretations Service, the Canada Revenue Agency (CRA) is bound by the ruling(s) given in this letter provided that: none of the issues discussed in the ruling(s) are currently under audit, objection, or appeal; no future changes to the ETA, regulations or the CRA’s interpretative policy affect its validity; and all relevant facts and transactions have been fully and accurately disclosed.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 306-914-3439.
Should you have additional questions on the interpretation and application of the GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287 or by fax to 1-418-566-0319.
Sincerely,
Cheryl South
Rulings Officer
Strategic and Emerging Issues Unit
General Operations and Border Issues Division
GST/HST Rulings Directorate
Email this Content