Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
XXXXX
XXXXX
XXXXX
Case Number: 105562
Business Number: XXXXX
Attention: XXXXX
XXXXX
August 5, 2008
Subject:
GST/HST RULING
Application of GST/HST to XXXXX
Dear XXXXX:
Thank you for your letter XXXXX, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to XXXXX (Product 1) and XXXXX (Product 2).
All legislative references are to the Excise Tax Act (ETA) and the regulations thereunder, unless otherwise specified.
Statement of Facts
Our understanding of the facts is as follows:
1. Products 1 and 2 are packaged in XXXXX-gram cartons containing XXXXX.
2. The ingredients of Product 1 are: XXXXX.
3. The ingredients of Product 2 are: XXXXX.
4. The labelling on the Product 1 and Product 2 cartons states: "XXXXX."
5. Products 1 and 2 are not sold primarily as breakfast cereals.
Ruling Requested
You would like to know how the GST/HST applies to supplies of Product 1 and Product 2.
Ruling Given
Based on the facts set out above, we rule that supplies of Product 1 and Product 2 are zero-rated pursuant to section 1 of Part III of Schedule VI.
This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.
Explanation
Generally, every recipient of a taxable supply made in Canada shall pay tax calculated at the rate of 5% on the value of the consideration for the supply (13% in the participating provinces of Nova Scotia, New Brunswick, and Newfoundland and Labrador) unless the supply is zero-rated. The tax rate in respect of a zero-rated supply is 0%. A zero-rated supply is a supply that is included in Schedule VI.
Under Part III of Schedule VI, certain supplies of basic groceries are zero-rated. 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 mixed with or used in the preparation of such food or beverages, other than supplies included in paragraphs (a) to (r) of that section.
Under paragraph 1(m) of Part III of Schedule VI, supplies of cakes, muffins, pies, pastries, tarts, cookies, doughnuts, brownies, croissants with sweetened filling or coating, or similar products are excluded from zero-rating under where:
(i) they are prepackaged for sale to consumers in quantities of less than six items each of which is a single serving, or
(ii) they are not prepackaged for sale to consumers and are sold as single servings in quantities of less than six, but not including bread products, such as bagels, English muffins, croissants or bread rolls, without sweetened filling or coating.
Product 1 and Product 2 are considered to be "similar products" under paragraph 1(m). As a result of the application of subparagraph 1(m)(i) in conjunction with section 1 of Part III of Schedule VI, supplies of Product 1 and Product 2 are zero-rated.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-952-9585. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Yours truly,
Ben Boboski
Goods Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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