Who this is for
Small food producers, home-based and commissary-kitchen businesses, caterers, tiffin services, farmers’ market sellers and small cafes in BC. BC has GST only, at 5%, with no provincial sales tax on most food.
The five rules
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Basic groceries are zero-rated, which is not the same as exempt. Zero-rated means you charge 0% GST on the sale but can still claim back the GST you paid on your own purchases, once registered. Flour, rice, lentils, fresh produce, meat, dairy, bread and most packaged ingredients fall here. If everything you sell is zero-rated, registering can still make sense to recover GST on equipment and kitchen rent.
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Snacks, candy and carbonated drinks are taxable. Chips, puffs and similar snack foods, salted nuts and seeds, candies and confectionery, and carbonated beverages are taxable at 5%. A sweet that the CRA would class as candy is taxable even if it is made from traditional ingredients. This is where many Indian sweets and namkeen products need a careful look.
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Sweetened baked goods: count to six. Cookies, muffins, cakes, pastries, doughnuts and similar items are zero-rated when pre-packaged by the maker in six or more single servings. They are taxable when sold in quantities of fewer than six. Single-serving ice cream and frozen desserts are taxable too.
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Heated food, food for eating on the spot, and catering are taxable. Food or drink heated for consumption is taxable. So is food sold at a place where it is meant to be eaten, and all food and drink supplied under a catering contract. A frozen meal sold cold is usually zero-rated. The same meal served hot at an event is taxable.
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Packaging, labelling and marketing decide borderline cases. The CRA says it considers how a product is displayed, labelled, packaged, invoiced and advertised. A product sold as a snack is treated as a snack. Keep your labels and marketing consistent with the status you apply, and keep a written note of why each product is where it is.
Registration is a separate question
Whether you must register depends on taxable sales: $30,000 over four calendar quarters or in one quarter. Zero-rated sales count toward that threshold, because they are taxable supplies at a zero rate. If you cross it, you register, charge GST on the taxable items, charge nothing on the zero-rated ones, and file returns on schedule.
One thing most people do not realize
The number six matters. Sweetened baked goods such as cookies, muffins, pastries and cakes are zero-rated when sold in a package of six or more single servings. They are taxable when sold as single servings in quantities of fewer than six. The same muffin can be zero-rated in a box of six and taxable when sold on its own.
What to bring if you want help
- Your product list with pack sizes, serving counts and whether sold hot or cold
- Photos of labels and packaging
- Where and how each product is sold: retail, wholesale, market, catering, delivery
- Sales by quarter so far, so we can check the registration threshold
- Any ruling or letter you have already received from the CRA
What this guide does not cover
Products that mix categories, dietary supplements and products sold through a restaurant have further rules, and a formal CRA ruling exists for unclear cases. We tell you when a ruling is the safer route.
From the Rex Tax desk
The products that cause the most back-and-forth are the ones that sit on a line. A sweet that could be candy or a baked good. A drink that is or is not carbonated. A sauce sold warm. Settle the status of each product before the first sale, in writing, and keep that note with your GST records. Changing a price list later is easy. Explaining an unfiled GST liability is not.
Official sources
- CRA GST/HST Memorandum 4.3: Basic groceries
- CRA GST/HST Info Sheet GI-021: Snack foods
- CRA GST/HST Info Sheet GI-036: Beverages
- CRA: When to register for and start charging the GST/HST
This guide is general information, not advice about your situation. It reflects the rules for the 2026 tax year. It has not yet been reviewed by a practitioner. The information was checked against the official sources listed above on the date shown. Rules change. Check the official sources above or ask us. How we prepare these guides.