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.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 94207r
Business Number: […]
Subject: GST/HST INTERPRETATION – STEVIA BASED PRODUCTS
This letter provides further guidance with respect to the position taken in our ruling letter 94207, issued to you on [mm/dd/yyyy], concerning stevia based products, and provides the Canada Revenue Agency’s current position on the tax status of these products.
The HST applies in the participating provinces at the following rates: 13% in Ontario, New Brunswick and Newfoundland and Labrador, 14% in Prince Edward Island and 15% in Nova Scotia. 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.
INTERPRETATION
Generally, in accordance with section 165, every recipient of a taxable supply made in Canada is required to pay GST/HST on the value of the consideration for the supply. Zero-rated supplies (listed in Schedule VI to the ETA) are subject to the GST/HST at the rate of 0%. Exempt supplies (listed in Schedule V to the ETA) are not subject to the GST/HST.
Section 1 of Part III of Schedule VI to the ETA zero-rates supplies of food or beverages for human consumption, including sweetening agents, seasonings and other ingredients mixed with or used in the preparation of such food or beverages, other than supplies included in paragraphs (a) to (r) of that section.
The terms “food” and “beverage” are not defined in the ETA. As stated in paragraph 2 of GST/HST Memorandum 4.3, Basic Groceries, we consider a product to be a food or beverage if an average consumer would recognize and purchase the product as such in the ordinary course of buying basic groceries.
The term “ingredient” is also not defined in the ETA. Generally, our view is that an average consumer would consider a product to be an ingredient if the product added to the flavour, texture, or appearance of the final product; that is, if it was integral to the final product. Moreover, in order to be regarded as an ingredient to a food or beverage, the final product, in and of itself, must be a food or beverage.
A review of the tax status of stevia based products has recently been conducted in light of steviol glycosides being added as a table-top sweetener by way of a modification to the List of Permitted Sweeteners published by Health Canada. Prior to the inclusion of steviol glycosides as a table-top sweetener, we had ruled that stevia based products could not be classified as ingredients as the products were only made available in Canada by virtue of their use as dietary supplements. Factors supporting this position included the fact that stevia was not listed in Table IX of Division 16 of Part B of the Food and Drug Regulations of the Food and Drug Act as a permitted sweetener and the fact that Health Canada had issued specific guidelines regarding stevia and its use, including limits on its consumption. Given the regulatory restriction on the sale of stevia, supplies of stevia products were excluded from zero-rating.
As Health Canada now considers steviol glycosides a table-top sweetener, our policy on the tax status of stevia based products has been expanded and some of these products may now be zero-rated. With respect to stevia based products, where they are advertised as sweeteners, marketed as alternatives to sugar and artificial sweeteners, are not labelled as dietary supplements, employ labelling that do not contain any risk or dosage information, and are used, recognized, and commonly sold as ingredients to food, where the primary use of such products is to impart a sweet taste to food and drink to which they are added, we now consider a product falling under this category to be an ingredient that is zero-rated under section 1 of Part III of Schedule VI to the ETA.
Should you require certainty as to the tax status of a particular stevia based product, we advise you to request a ruling on the application of GST/HST to the supply of the product.
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 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 or the additional information provided herein.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 905-721-5220. 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.
Yours truly,
Zubair Patel
Basic Groceries and Point-of-Sale Rebates Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
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