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: 247930
Dear [Client]:
Subject: GST/HST interpretation
Single servings of ice cream and similar products
Thank you for your correspondence of[mm/dd/yyyy], concerning the application of the goods and services tax/harmonized sales tax (GST/HST) to ice cream and similar products.
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.
We understand […] you would like information on the application of GST/HST to ice cream and similar products.
INTERPRETATION REQUESTED
You would like to know how a “single serving” is determined for the zero-rating provision pertaining to ice cream and similar products. As an example, you have provided a photograph of a […] mL container of a frozen dessert that is similar to ice cream. You wish to know whether quantity is the only factor used to determine whether ice cream is taxable or if a “packaged, marketed and promoted” test also applies. You have also enquired whether the CRA considers the per serving reference amount indicated on the Nutrition Facts table of a product’s label in determining whether ice cream or a similar product is packaged or sold in a single serving. In the example you provided, the nutrition facts are provided per […] mL of the product.
INTERPRETATION GIVEN
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(k) of Part III of Schedule VI excludes from zero-rating:
“ice cream, ice milk, sherbet, frozen yoghurt or frozen pudding, non-dairy substitutes for any of the foregoing, or any product that contains any of the foregoing, when packaged or sold in single servings”.
The CRA’s administrative policy on single servings for ice cream and similar products is set out in paragraph 74 to 84 of GST/HST Memorandum 4-3, Basic Groceries.
For products listed in paragraph 1(k) of Part III of Schedule VI that are measured by volume, a single serving is a package or unit of less than 500 mL. For products measured by weight, a package or unit less than 500 grams is a single serving. There is no connection to serving sizes listed on the Nutrition Facts label on the packaging for the purposes of Health Canada labelling requirements.
Ice cream and similar products are considered to be “packaged in single servings” when each serving is packaged in its own right. They are considered to be “sold in single servings” when they are designed and marketed for sale in single servings. Where an ice cream manufacturer sells a tub of ice cream containing [...] mL of ice cream, the tub of ice cream is in a package of less than 500 mL and it is designed for sale in a single serving. The sale of the ice cream would be excluded from zero-rating under paragraph 1(k) of Part III of Schedule VI and would be subject to the GST/HST at the applicable rate.
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 interpretation(s) given in this letter, including any additional information, is not a ruling and does not bind the Canada Revenue Agency (CRA) with respect to a particular situation. Future changes to the ETA, regulations, or the CRA’s interpretative policy could affect the interpretation(s) or the additional information provided herein.
CONTACT
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 778-952-5178.
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.
Sincerely,
Ben Lui
Industry Sector Specialist
Strategic and Emerging Issues Unit
General Operations and Border Issues Division
GST/HST Rulings Directorate
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