Grains, Seeds, Hay, Silage and Other Fodder and Plant Crops

GST/HST Info Sheet GI-107
July 2010

This info sheet describes the application of the goods and services tax/harmonized sales tax (GST/HST) to supplies of grains and seeds, hay, silage and other fodder and plant crops.

In this info sheet, "taxable" means subject to the GST at 5% or HST at 12%, 13% or 15%. "Zero-rated" means subject to the GST/HST at the rate of 0%.

For more information, refer to GST/HST Memoranda Series 4.4, Agriculture and Fishing, and Schedule I to the Seeds Regulations made under the Seeds Act.

Grains and seeds

A supply of grains and seeds (seeds) is zero-rated when the following conditions are met:

1. the seeds are supplied in their natural state, treated for seeding purposes, or irradiated for storage purposes,
2. the seeds are ordinarily used as, or to produce, food for human consumption or feed for farm livestock or poultry, and
3. the seeds are supplied in a quantity that is larger than the quantity that is ordinarily sold or offered for sale to consumers.

Condition 1: The seeds are supplied in their natural state, treated for seeding purposes, or irradiated for storage purposes

Seeds are supplied in their natural state if they are not further processed than being washed and cleaned. Seeds that are mechanically broken, crushed or pulverized are not considered to be in their natural state.

Seeds are treated for seeding purposes if they have been treated with pesticides or insecticides or if they have been palletized with an inert material to facilitate planting with seeding equipment.

When grains or seeds are irradiated to prolong storage, this process does not affect their tax status.

Condition 2: The seeds are ordinarily used as, or to produce, food for human consumption or feed for farm livestock or poultry

Refer to the seed lists below for seeds that are considered to be ordinarily used as or to produce food for human consumption or feed for farm livestock or poultry, as well as those that are not.

Mixtures of seeds that are packaged, prepared or sold for use as feed for wild birds or as pet food are excluded from zero-rating and are taxable.

Seeds for plants ordinarily grown for their fibres (such as cotton), and lawn or flower seeds are also taxable, as they are not used to produce food for human consumption, or livestock or poultry feed.

Condition 3: The seeds are supplied in a quantity that is larger than the quantity that is ordinarily sold or offered for sale to consumers

Seeds are conditionally zero-rated based on the quantity in which they are sold. Any seeds that meet the first two conditions remain taxable when they are not sold in commercial quantities. If the same seeds are sold in quantities equal to or lesser than a quantity that is ordinarily sold or offered to consumers, they are not considered as being sold in commercial quantities and are thus taxable. When the seeds are sold in commercial quantities, their supply is zero-rated.

The quantitative limits for considering that a supply of seed is made in a commercial quantity are based on the size of the seed. For small seeds, the supply must be greater than 125 grams to be considered as being made in a commercial quantity and thus, to be zero-rated. If the seeds are sold by seed count, the supply must be greater than 2,500 seeds to be considered as being made in a commercial quantity. For large seeds, the supply must be greater than 20,000 seeds or 5 kilograms to be considered as being made in a commercial quantity. Large seeds refer to peas, corn and beans only; any other type of seed is considered a small seed.

Hay, silage, and other fodder crops

Hay, silage, and other fodder crops that are ordinarily used as, or to produce, food for human consumption or feed for farm livestock or poultry, are zero-rated whenever they are supplied in quantities greater than the quantity ordinarily sold or offered for sale to consumers.

Hay is ordinarily sold in bales of various sizes and shapes. For a supply of hay to be zero-rated, the quantity sold must be more than one large round bale or its equivalent.

A single large round bale is one that weighs at least 750 kg. Accordingly, a sale exceeding this weight would be zero-rated. If the hay were sold in square bales, for example, each weighing 50 kg, the supply would have to be at least 16 bales to be zero-rated.

Other plant crops

The following products are unconditionally zero-rated regardless of the quantity sold or offered, to whom they are supplied, or the purpose or use for which they are acquired:

• hops
• flax seed
• sugar cane
• barley
• straw
• sugar beets

Hemp

Supplies of the grain, seeds, or the mature stalks having no leaves, flowers, seeds or branches, of industrial hemp plants are zero-rated when the following conditions are met:

• the supply is in accordance with the Controlled Drugs and Substances Act (CDSA), if applicable;
• the grains or seeds are not further processed than sterilized or treated for seeding purposes and are not packaged, prepared or sold for use as feed for wild birds or as pet food; and
• in the case of viable grain or seeds, they are included in the definition of "industrial hemp" in section 1 of the Industrial Hemp Regulations made under the CDSA.

Forage mixtures

Any seed mixture that is sold or labelled as a forage mixture (i.e. Canada Certified No. 1 Forage Mixture) in accordance with Table XIII of Schedule I to the Seeds Regulations made under the Seeds Act is zero-rated when sold in a commercial quantity. Forage mixtures may contain taxable seeds (i.e. creeping red fescue), but as long as they are properly labelled and are supplied in a commercial quantity, supplies of these forage mixtures are zero-rated. The term "commercial quantity" has the meaning described above under the subtitle "Condition 3".

Seed potatoes and onion sets

Seed potatoes and onion sets are not different from potatoes and onions sold for human consumption. Therefore, these products are zero-rated under Part III of Schedule VI.

Seed lists

The following seeds are considered to be ordinarily used as, or to produce food for human consumption or feed for farm livestock or poultry:

Agricultural seeds

• alfalfa
• barley
• bean, field
• bean, horse, tick and faba
• bean, mung
• beet, field
• bromegrass, meadow
• bromegrass, smooth
• bromegrass, sweet
• buckwheat, common
• buckwheat, tartarian
• canary grass, reed
• chickpea
• clover, alsike
• clover, red
• clover, white
• corn, field
• corn, pop
• corn, sweet
• cowpea
• fescue, meadow
• fescue, tall
• foxtail, creeping
• foxtail, meadow
• lentil
• lupine, field
• medick, black
• millet, foxtail
• millet, pearl
• mustard, black
• mustard, white
• oats
• oatgrass, tall
• orchardgrass
• pea, field
• peanut
• rapeseed, canola
• rape, forage
• rye
• ryegrass, annual
• safflower
• sainfoin
• sorghum
• soybean
• sundangrass
• sunflower
• timothy, common
• trefoil, bird's-foot
• triticale
• vetch, crown
• vetch, milk
• wheat, common
• wheat, durum
• wheatgrass, beardless
• wheatgrass, crested
• wheatgrass, intermediate
• wheatgrass, northern
• wheatgrass, pubescent
• wheatgrass, Siberian
• wheatgrass, slender
• wheatgrass, streambank
• wheatgrass, tall
• wheatgrass, western
• wildrye, Altai
• wildrye, Russian

Vegetable seeds

• artichoke
• asparagus
• basil
• bean, garden
• bean, lima
• bean, runner
• beet, sugar
• broccoli
• Brussels sprouts
• cabbage
• cabbage, Chinese
• cantaloupe
• carrot
• cauliflower
• celery
• chard, Swiss
• chicory
• chives
• citron
• collards
• coriander
• cress, garden
• cress, water
• cucumber
• dill
• eggplant
• endive
• fennel
• kale
• kale, Chinese
• kohlrabi
• leek
• lettuce
• mustard
• okra
• onion
• parsley
• parsnip
• pea
• pepper
• potato
• pumpkin
• radish
• rhubarb
• rosemary
• rutabaga
• sorrel
• spinach
• squash
• thyme
• tomato
• turnip
• watermelon

The following seeds are not considered to be ordinarily used as, or to produce food for human consumption or feed for farm livestock or poultry:

Lawn seeds

• bentgrass
• bluegrass, Canada
• bluegrass, Kentucky
• fescue, Chewing's
• fescue, fine-leaved
• fescue, hard
• fescue, red and creeping red
• fescue, sheep
• redtop
• ryegrass, perennial
• timothy, dwarf

Other seeds

• all flower seeds
• canary grass
• tobacco

Seeds graded under the following tables of the Seeds Regulations are considered to be ordinarily used as, or to produce food for human consumption or feed for farm livestock or poultry:

• Table I
• Table II
• Table III
• Table IV (all except (a) canary grass and (b) flax ^{Footnote 1}, oil and fibre)
• Table V
• Table VI
• Table VII
• Table VIII
• Table IX (all except timothy - dwarf)
• Table X
• Table XI (all except turf type varieties)
• Table XIII
• Table XVI
• Table XVII
• Table XVIII
• Table XIX
• Table XX
• Table XXI

Seeds graded under the following tables of the Seeds Regulations are not considered to be ordinarily used as, or to produce food for human consumption or feed for farm livestock and poultry:

• Table XII
• Table XIV
• Table XV