GST/HST Rulings and Interpretations
Directorate
Place Vanier, Tower C, 10th Floor
XXXXX 25 McArthur Avenue
XXXXX Vanier, ON K1A 0L5
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XXXXX
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Case: HQR0000902
Business Number: XXXXX
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September 29, 1998
Dear Mr[.] XXXXX
This is in reply to a memorandum written by XXXXX of your office (with attachments), concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the supply of seven varieties of XXXXX products. I will present our views in the format of a formal ruling on the products.
Statement of Facts
Our understanding of the facts, the transactions, and the purpose of the transactions is as follows:
1. In the course of their commercial activities XXXXX makes supplies in Canada of certain varieties of XXXXX as described in Statement of Fact 2.
2. The seven varieties at issue are as follows:
XXXXX makes supplies of XXXXX to grocery store retailers in XXXXX. The products are packaged by XXXXX for sale to consumers in XXXXX consist of three individual servings of the same type of XXXXX that are bound together. (A consumer who purchases one XXXXX receives XXXXX [i]ndividual servings of the same type of XXXXX[.]
2. XXXXX makes supplies of XXXXX to grocery store retailers in XXXXX are packaged by XXXXX for sale to consumers in boxes containing 25 individual servings of the same type of XXXXX (A consumer who purchases on XXXXX receives 25 individual servings of the same type o[f] XXXXX[.]
3. XXXXX makes supplies of XXXXX to institutional customers (e.g., hospitals, cafeterias, vending machine operators) in XXXXX contain 24 individual servings of the same type of XXXXX and are intended ultimately for sale to a consumer on an individual basis. XXXXX are not offered for sale to consumers.)
Ruling Given
Based on the facts set out above, we rule that:
1. Supplies made by XXXXX are zero-rated supplies.
2. Supplies made by XXXXX are zero-rated supplies.
3. Supplies made by XXXXX are zero-rated supplies.
On April 1, 1997, the harmonized sales tax (HST) replaced the goods and services tax (GST) and the provincial sales tax (PST) in the three participating provinces of Nova Scotia, New Brunswick and Newfoundland with a harmonized tax rate of 15%. Note that taxable supplies (other than zero-rated supplies) made in a participating province attract tax at the rate of 15%.
This ruling is subject to the general limitations and qualifications outlined in section 1.4 of Chapter 1 of the GST/HST Memoranda Series. We are bound by this ruling provided that none of the above issues is currently under audit, objection, or appeal; that there are no relevant changes in the future to the Excise Tax Act, or to departmental interpretative policy; and that you have fully described all necessary facts and transactions for which you requested a ruling.
Explanation
Section 1 of Part III of Schedule VI to the Excise Tax Act (the "Act") provides a zero-rated tax status for "(S)upplies 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)" other than supplies under paragraphs (a) through (r) of this section.
The Department considers that a supply made by XXXXX is a supply that does not fall within any of the excepting paragraphs (a) through (r) of section 1 of Part III of Schedule VI to the Act. Accordingly, supplies of XXXXX made by XXXXX are zero-rated supplies of food. Whether XXXXX are sold in XXXXX XXXXX is not relevant in determining the tax status of the supply.
Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 941-3971.
Yours truly,
Robert Smith
General Operations and Border Issues Division
GST/HST Rulings and Interpretations Directorate
c.c.:
| Legislative References: |
Schedule VI, Part III |
| NCS Subject Code(s): |
11850-05 |
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