3 June 2000 GST/HST Ruling 8091/HQR 0001697 - GST/HST Application to Trays of Sushi

Dear XXXXX

This letter is further to our letter of XXXXX, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to a number of products including sushi.

Statement of Facts

Our understanding of the facts is as follows:

1. You sent us two photographs of a product which consists of a flat (or nearly flat), black, rectangular polystyrene platter containing several pieces of a variety of sushi products.

2. The sushi products are grouped together on the tray according to the type of sushi. There are XXXXX types of sushi.

3. Included with the sushi products is a small plastic covered container of sauce, placed at or near the center of the tray.

4. The tray is covered with a transparent film.

5. Writing on the photographs indicates that the tray of sushi products is referenced by XXXXX.

Ruling Requested

You requested a ruling as to whether the sushi product falls within the scope of paragraph 1(o.3) of Part III of Schedule VI to the Excise Tax Act (ETA) as an arrangement of prepared food.

Previous Ruling

The previous ruling issued XXXXX, was that the sushi product was zero-rated as it did not fall within the scope of paragraph 1(o.3) of Part III of Schedule VI to the ETA. Having reviewed the facts of this case, we have concluded that the ruling dated XXXXX, as it pertains to sushi was incorrect.

Ruling Given

Based on the facts set out above, we rule that the tray of sushi products is an arrangement of prepared food pursuant to paragraph 1(o.3) of Part III of Schedule VI to the ETA.

The revocation of our previous ruling will be effective thirty (30) days from the date of this letter.

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 our interpretative policy; and that you have fully described all necessary facts and transaction(s) for which you requested a ruling.

Explanation

Paragraph 1(o.3) of Part III of Schedule VI excludes "platters of cheese, cold cuts, fruit or vegetables and other arrangements of prepared food". Consequently, supplies of such food arrangements are subject to tax at 7% (or 15% where the supply is made in a province participating in the HST).

The Department's position; as publicized in Policy Number P-232 - "Meaning of "Other Arrangements of Prepared Food" for Purposes of Paragraph 1(o.3) and Former Subparagraph 1(o) of Part III of Schedule VI to the Excise Tax Act" (issued June 24, 1999); is that the words, "other arrangements of prepared food", are intended to apply only to those arrangements with characteristics similar to (although not necessarily identical to) those of "platters of cheese, cold cuts, fruit or vegetables". In general, such arrangements should be reminiscent of arrangements a caterer might provide in the course of a catering service. In particular, they should:

f) be presented on a piece of servingware (i.e., something on which the prepared food is likely to be served such as, a dish, plate, platter or tray);

g) be deliberately configured to create a visual effect so that it appears likely to be served in the same form in which it is sold, and

h) require little or no additional preparation (e.g., "cooking" or "heating" would generally constitute additional preparation, whereas "thawing" generally would not).

The tray of sushi can be served in the same form in which it is sold, the product is arranged to achieve a desired visual effect and it requires little or no additional preparation. Supplies of trays of sushi clearly fall within the scope of paragraph 1(o.3) and are therefore subject to tax at 7% (or 15% in a province participating in the HST).

In Quebec, the GST is administered by the Ministère du Revenu du Québec (MRQ). For all future enquiries regarding the GST, please contact the MRQ toll-free at 1-800-465-3722 or written requests may be sent to the Ministère du Revenu du Québec, Directeur des Taxes à la consommation, Direction générale de la législation, 3800, rue de Marly, Sainte-Foy QC G1X 4A5.

Yours truly,

J.A. Venne
Director
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate