Certain businesses carry on activities in the food services sector where those activities do not constitute their principal source of income. Examples of such businesses are:

• department-store lunch counters and snack bars
• hotel dining rooms and room service
• food concessions operated in arenas and movie theatres

Most foods and beverages sold in such establishments are taxable under the GST and QST systems. Furthermore, grocery stores, convenience stores, bakeries, delicatessens, doughnut shops and similar businesses that sell prepared foods and beverages are considered to be establishments that provide foods heated for consumption. Sales of these types of foods and beverages are taxable.

However, some foods and beverages sold as take-out items (other than items sold from vending machines) may be zero-rated under certain circumstances. For more information, click Sweetened Baked Goods and Similar Products.