The GST and the QST apply to sales of alcoholic beverages, carbonated beverages, and certain non-carbonated beverages.

Wines, beer and other beverages

Wines, spirits, beer and other alcoholic or de-alcoholized beverages are taxable. Beer-making kits containing more than just ingredients to make beer (such as kits that include equipment or apparatus required to manufacture beer) are subject to tax.

Application of the GST

Under the GST system, the sale of beer-making kits containing only the ingredients to make beer (yeast, hops, etc.), as well as the sale of grape juice concentrates used by consumers to make wine, is zero-rated.

Application of the QST

Under the QST system, the sale of grapes, grape juice, concentrated or non-concentrated grape must, malt, malt extract, and similar products used to make wine or beer is taxable. Cooking wine sold and represented as a condiment, and normally purchased in grocery stores, is also zero-rated, as are foods preserved in alcohol.

Carbonated beverages

All carbonated beverages, including carbonated mineral water, are taxable. Sometimes fountains are used to dispense the beverages. These fountains are operated with cylinders of pre-mix or post-mix. Pre-mix is a carbonated beverage supplied in a cylinder with all the syrups and CO₂ required; its sale is taxable. Post-mix contains all the ingredients for a carbonated beverage, but does not contain CO₂; its sale is zero-rated.

Fruit-juice beverages

Non-carbonated fruit-juice and fruit-flavoured beverages are taxable if they contain less than 25% by volume of:

• a natural fruit juice or combination of natural fruit juices;
• a reconstituted natural fruit juice or combination of reconstituted natural fruit juices.

The same is true with respect to products that, when added to water, produce beverages of the kind described in the previous paragraph. However, milk-based beverages and iced tea mixes, including fruit-flavoured iced tea mixes, are zero-rated if they are sold in other than single servings.