Meal Replacements, Nutritional Supplements and Dietary Supplements
Under the GST and QST systems, the sale of basic groceries is zero-rated. In fact, most food and beverages sold for human consumption, including sweetening agents and spices, are zero-rated. Although meal replacements, nutritional supplements and dietary supplements may have certain similarities to basic groceries, they do not have the same tax status.
Meal replacements and nutritional supplements that meet the requirements of the Food and Drugs Act are considered zero-rated groceries.
Dietary supplements, however, are consumed for their therapeutic or preventative effects, or to achieve specific beneficial effects related to intellectual or physical performance. As such, dietary supplements are not considered basic groceries and are therefore taxable. Consequently, most sales of protein products, such as beverages, cookies and pudding ready for consumption, as well as beverages, meals and snacks in the form of powdered mixes, are taxable unless such products qualify as meal replacements or nutritional supplements under the Act.
Revenu Québec considers a number of factors including the labelling, packaging and marketing of a product to determine whether consumers would consider it a dietary supplement rather than food, a beverage or an ingredient (all three of which are zero-rated).
Note that all food and beverages are taxable when sold through vending machines.
For more information, refer to the GST/HST memorandum Basic Groceries (4.3).