The Canada Revenue Agency (CRA) recently published GST/HST Notice 338, “Information Requirements for Basic Grocery Ruling Requests,” to provide guidance on the information to be supplied when GST/HST rulings are requested concerning food and beverage items. The intent of the publication is to encourage taxpayers and their advisors to provide the CRA with complete and clear information in a standard format, allowing it to issue a ruling on the tax status of a particular product in a timely manner.
Supplies of basic groceries, including most food and beverages marketed for human consumption, are generally zero-rated for GST/HST purposes. However, certain categories of food items (e.g., snack foods, candies, and carbonated beverages) are excluded from zero-rating and remain subject to tax. GST/HST Memorandum 4.3, “Basic Groceries,” provides detailed guidelines on what the CRA considers to be basic grocery products and items excluded from zero-rating.
Determining the GST/HST status of many food products can be challenging, particularly with new items. A ruling can remove uncertainty about a product’s tax status. Where a ruling is requested, the CRA suggests including a sample with the full product packaging for each item, where possible, unless the product is perishable or requires refrigeration. Alternatively, clear colour pictures showing all sides of the product packaging (and, ideally, the product both inside and outside the package) may be provided. In either case, the CRA is looking to ascertain the following information:
- Total weight or volume of the contents and number of units in the product package;
- Marketing claims, if any (e.g., purported health benefits);
- Product ingredients; and
- Nutritional information (e.g., nutrition or product facts table).
The CRA will also require details about placement of the product in a retail store (e.g., in which section and what products are found nearby) and/or the section in which an item is found in an online store and a link to the product, if applicable. Depending on the nature of the product, the CRA may ask for additional information or supporting documentation.
The CRA aims to provide rulings within 45 days once all information pertinent to a request has been received. Note that, in the absence of any required details, the CRA’s standard practice is to provide a non-binding interpretation instead.
