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
Attention: XXXXX
Case Number: 111575
Business Number: XXXXX
Subject:
GST/HST RULING
XXXXX
Dear XXXXX:
Thank you for your letter of XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to XXXXX (the Product).
HST applies at the rate of 13% in the participating provinces of Nova Scotia, New Brunswick and Newfoundland and Labrador. GST applies at the rate of 5% in the remaining provinces and territories.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
Statement of Facts
Our understanding of the facts is as follows:
1. The submission states that XXXXX producer of XXXXX processed meat and meal products. XXXXX.
2. XXXXX intends to capitalize on the increase in snacking amongst deli consumers by capturing a share in the ready to eat XXXXX segment with the launch of the Product. XXXXX states in the XXXXX used to promote the Product that convenience is replacing scratch preparation for meals and consumers are broadening their view of snacks beyond such items as chips, cookies, and crackers and are more likely to consider any small portion of food as a potential snacking candidate.
3. XXXXX.
4. The Product consists of a round plastic tray with a XXXXX which allows the contents to be seen. The contents are a variety of popular snacking items XXXXX. The XXXXX are pre-cut into bite-sized pieces and are ready to eat. XXXXX.
5. The specific items contained in the tray are XXXXX and XXXXX. The total net weight of the tray is XXXXXg and the labelling states that it serves XXXXX.
6. The Product ingredients are given for each item and are as follows:
• XXXXX
• XXXXX
• XXXXX
• XXXXX
• XXXXX
7. Each of the above items are XXXXX to ensure freshness and flavour. In the submission, XXXXX states: "XXXXX."
8. The product will be sold in large grocery chain stores and must be refrigerated. It is to be served fresh and not frozen. It is recommended that the Product be merchandised in the self-service deli counters.
9. The Product is not supplied under a contract for a catering service.
Ruling Requested
You would like to confirm the position that the Product is not a product which would be excluded from zero-rating by paragraph 1(o.3) of Part III of Schedule VI, but would be zero-rated under section 1 of that same Part and Schedule.
Ruling Given
Based on the facts set out above, we rule that supplies of the Product are taxable at 5% GST, or 13% HST pursuant to section 165.
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%. Taxable supplies that are zero-rated for GST/HST purposes are described 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.
In particular, paragraph 1(o.3) of Part III of Schedule VI excludes from zero-rating "platters of cheese, cold cuts, fruit or vegetables and other arrangements of prepared food". Consequently, supplies of such food arrangements are subject to GST at 5% or HST at 13%.
Platters of cheese, cold cuts and other prepared foods are discussed in paragraphs 114 to 119 of GST/HST Memorandum Series 4.3 Basic Groceries (MS 4.3). Paragraph 114 of this publication states the following:
"Supplies of platters or arrangements of cheese, cold cuts, (e.g., meat, fish, or poultry), fruit or vegetables and other arrangements of prepared foods and other food are taxable whether or not they are in a form suitable for immediate consumption. For example, frozen platters of prepared foods are taxable.
In the submission, the point is made that the Product requires some assembly by the consumer as each item is individually packaged to ensure freshness and flavour. This fact does not exclude the product from being included in paragraph 1(o.3), as such arrangements will be taxable whether or not they are in a form suitable for immediate consumption.
Paragraph 116 of MS 4.3 provides examples of platters which are subject to tax. These examples include trays of appetizers including cheese, fruit, canapés and pates. Thus, a product on a tray will satisfy the requirements of paragraph 1(o.3) of Part III of Schedule VI.
The above factors lead to the conclusion that the Product is a "platter of cheese, cold cuts, fruit or vegetables and other arrangements of prepared food" for purposes of paragraph 1(o.3) of Part III of Schedule VI. As such, the Product is excluded from section 1 of Part III of Schedule VI and is therefore, a taxable supply subject to the GST at 5% or HST at 13% as applicable.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at XXXXX. 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,
XXXXX
Goods Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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