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.
[Addressee]
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
Case Number: 137315
August 19, 2011
Dear [Client]:
Subject:
GST/HST RULING
Application of GST/HST to [...] [ABC's] [...] [Fruit] Juice
Thank you for your letter of June 6, 2011, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the supply of [...] [ABC's] [...]% [...] [Fruit] Juice (the Product).
HST applies at the rate of 15% in Nova Scotia, 13% in Ontario, New Brunswick, and Newfoundland and Labrador, and 12% in British Columbia. 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
We understand the facts to be as follows:
1. The Product is [...] [Fruit] juice.
2. The Product is sold in 500 ml [...] bottles and is non-carbonated.
3. The Product is marketed as a juice and as an ingredient.
4. The label states [...].
5. On the website[...] it is stated that:
a) [...] [quality, packaging and ingredients described]
b) [...] [suggested serving size, benefits and uses described]
Ruling Requested
You would like to know if the Product is zero-rated under section 1 of Part III of Schedule VI to the ETA.
Ruling Given
Based on the facts set out above, we rule that the supply of the Product is excluded from zero-rating pursuant to paragraph 1(n) of Part III of Schedule VI, and is therefore taxable at the HST rate of 15% in Nova Scotia, 13% in Ontario, New Brunswick, and Newfoundland and Labrador, and 12% in British Columbia, and GST applies at the rate of 5% in the remaining provinces and territories.
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 15% in Nova Scotia, 13% in Ontario, New Brunswick, and Newfoundland and Labrador, and 12% in British Columbia. GST applies at the rate of 5% in the remaining provinces and territories, unless the supply is zero-rated, pursuant to subsection 165(3). The tax rate in respect of a zero-rated supply is 0%, where 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.
Supplies of beverages (other than unflavoured milk), or pudding, including flavoured gelatine, mousse, flavoured whipped dessert product or any other products similar to pudding are excluded from zero-rating under paragraph 1(n) of Part III of Schedule VI, except
(i) when prepared and pre-packaged specially for consumption by babies,
(ii) when sold in multiples, pre-packaged by the manufacturer or producer, of single servings, or
(iii) when the cans, bottles or other primary containers in which the beverages or products are sold contain a quantity exceeding a single serving.
Under paragraph 1(n) of Part III of Schedule VI a beverage size is considered a single serving when the serving size is less than 600ml. The supply of a single serving beverage is excluded from zero-rating under paragraph 1(n) of Part III of Schedule VI. While we appreciate the fact that there is a recommended daily serving [...] to achieve maximum health benefits, it would not be unreasonable for a person to consume a 500 ml bottle of [...] [Fruit] juice in a single occasion. Further, we cannot distinguish this beverage sufficiently from similar beverages sold in quantities of less than 600 ml. Therefore, the supply of the Product in a 500ml bottle is considered a single serving and is subject to the HST at a rate of 15% in Nova Scotia, 13% in Ontario, New Brunswick, and Newfoundland and Labrador, and 12% in British Columbia. GST applies at the rate of 5% in the remaining provinces and territories.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-5124. 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,
Angela Stachowski
Goods Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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