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.
GST/HST Rulings Directorate
5th floor, Tower A, Place de Ville
320 Queen Street
Ottawa ON K1A 0L5
[Client Address]
Case Number: 249609
Dear [Client]:
Subject: GST/HST ruling - Request for reconsideration of ruling […] - […][a cracker mixture]
Thank you for your correspondence of May 11, 2025, in which you requested a reconsideration of our ruling […] issued on [mm/dd/yyyy], concerning the application of the goods and services tax/harmonized sales tax (GST/HST) to […][a cracker mixture] (Product). […].
Your request has been forwarded to the Strategic and Emerging Issues Unit for response. The Strategic and Emerging Issues Unit is the Canada Revenue Agency’s (CRA) authority for interpretative issues concerning the basic grocery provisions in the Excise Tax Act (ETA).
The HST applies in the participating provinces at the following rates: 13% in Ontario; 14% in Nova Scotia; and 15% in New Brunswick, Newfoundland and Labrador and Prince Edward Island. The GST applies in the rest of Canada at the rate of 5%.
In September 2024, the CRA issued Notice 338, Information Requirements for Basic Grocery Ruling Requests (Notice 338). The requirements detailed in this publication are in addition to the documentation requirements found in GST/HST Memorandum 1-4, Excise and GST/HST Rulings and Interpretations Service. Please refer to Notice 338 for any future requests regarding basic groceries. These publications are available on our website.
All legislative references are to the ETA unless otherwise specified.
STATEMENT OF FACTS
[…]
[…], we understand the following:
1. You have purchased and/or observed the Product for sale at grocery stores in Ontario.
2. The Product is distributed by […][distributor name].
3. The Product’s ingredients are: […]
4. The front label of the Product’s packaging shows “[…][name of mixture]” and “[…][description of crackers]”. The front label of the packaging also shows the net weight of the Product as being [#] grams.
5. The front label of the Product’s packaging also shows the Product in a serving bowl, showing a mixture of the varieties of the elements of the Product.
6. The rear label of the Product’s packaging describes the contents of the package as follows: “[…] has [#] different bite size crackers. […].” This description is followed by images of the [#] different types of crackers and they are named as follows: […][various savoury flavours].
7. The rear label of the Product’s packaging also states, “[…][description of Product referenced to as a snack].”
8. The elements in the Product are packaged loosely in a bag. That is, they are separate and independent from one another and not bound together.
RULING REQUESTED
You have asked us to reconsider:
* the ruling given in our letter of [mm/dd/yyyy] […]
RULING GIVEN
Based on the facts set out above, we confirm that the Product is a snack mixture and is excluded from zero-rating under paragraph 1(i) of Part III of Schedule VI, and therefore, when purchased in Ontario, is subject to the 13% HST. We confirm the ruling given in our letter of [mm/dd/yyyy], […] and our response remains unchanged.
EXPLANATION
Snack mixtures that contain cereals, nuts, seeds, dried fruit or any other edible product are excluded from zero-rating under paragraph 1(i) of Part III of Schedule VI unless the mixture is sold primarily as a breakfast cereal. Snack mixtures may consist of a mixture of foods, that if supplied individually, may be zero-rated or may be excluded from zero-rating based on the application of section 1 of Part III of Schedule VI. When the foods are combined and supplied as a snack mixture, paragraph 1(i) of Part III of Schedule VI applies to exclude the supply of the snack mixture from zero-rating. The Product contains a mixture of various types of crackers.
Paragraph 67 of Memorandum 4.3 further highlights that snack mixtures usually have the following characteristics:
* Consumers commonly view them as snacks.
* Their ingredients are ready to eat; no further processing is required.
* The ingredients have been combined before the product is sold.
* The main ingredients remain separate and distinct from each other and are not bound into one whole.
* The main ingredients are often coated with a savoury seasoning such as salt or barbecue flavouring.
* They are eaten by the handful or as individual bite-sized pieces without utensils.
* They are usually sold in pouch packs or bags, from bulk bins or in clear plastic containers.
The Product demonstrates those characteristics.
DISCLAIMER
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1-4, Excise and GST/HST Rulings and Interpretations Service, the CRA is bound by the ruling(s) given in this letter provided that: none of the issues discussed in the ruling(s) are currently under audit, objection, or appeal; no future changes to the ETA, regulations or the CRA’s interpretative policy affect its validity; and all relevant facts and transactions have been fully and accurately disclosed.
CONTACT
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 778-952-5178.
Should you have additional questions on the interpretation and application of the GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Sincerely,
Ben Lui
Industry Sector Specialist
Strategic and Emerging Issues Unit
General Operations and Border Issues Division
GST/HST Rulings Directorate
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