School Cafeterias, University and Public College Meal Plans, and Food Service Providers
GST/HST Memorandum 20-5
This memorandum explains, for GST/HST purposes, the provisions of the Excise Tax Act that pertain to the supply of food, beverages or meals made by or to school authorities, universities and public colleges.
In this publication, all legislative references to the “Act” are to the Excise Tax Act unless otherwise specified. The information in this publication does not replace the law found in the Act and its regulations.
If this information does not completely address your particular situation, you may wish to refer to the Act or relevant regulation, or call GST/HST Rulings at 1-800-959-8287 for additional information. If you require certainty with respect to any particular GST/HST matter, you may request a ruling. GST/HST Memorandum 1-4, Excise and GST/HST Rulings and Interpretations Service, explains how to obtain a ruling or an interpretation and lists the GST/HST rulings centres.
If you are located in Quebec and wish to request a ruling related to the GST/HST, please call Revenu Québec at 1‑800‑567‑4692. You may also visit the Revenu Québec website at revenuquebec.ca to obtain general information.
For listed financial institutions that are selected listed financial institutions (SLFIs) for GST/HST or Quebec sales tax (QST) purposes or both, whether or not they are located in Quebec, the CRA administers the GST/HST and the QST. If you wish to make a technical GST/HST or QST enquiry related to SLFIs, please call 1‑855‑666‑5166.
Reference in this publication is made to supplies that are subject to the GST or the HST. The HST applies in the participating provinces at the following rates: 13% in Ontario and 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island. The GST applies in the rest of Canada at the rate of 5%. If you are uncertain as to whether a supply is made in a participating province, see GST/HST Technical Information Bulletin B‑103, Harmonized Sales Tax – Place of Supply Rules for Determining Whether a Supply is Made in a Province.
Table of Contents
1. Certain supplies of food, beverages, and meals made by or to school authorities, universities or public colleges are exempt from the GST/HST. Additionally, in certain circumstances catering services may also be exempt. These exemptions are listed in Part III of Schedule V.
2. Section 12 of Part III of Schedule V exempts “a supply of food or beverages (other than prescribed food or beverages or food or beverages supplied through a vending machine) where the supply is made in an elementary or secondary school cafeteria primarily to students of the school, except where the supply is for a private party, reception, meeting or similar private event”.
3. The phrase “primarily to students” means that where a school cafeteria supplies food and beverages (other than supplies of prescribed food or beverages or food or beverages supplied through a vending machine) to both students and non‑students, more than 50% of the supplies must be to students of the particular school in order for the exemption to apply. If the supply of food and beverages in the cafeteria is made primarily to students of the school, all supplies of food and beverages made in the cafeteria are exempt except for food or beverages that are prescribed, supplied through a vending machine or supplied for a private party, reception, meeting or similar private event.
4. In elementary or secondary schools that do not have cafeterias, food and beverages may be provided to the students in classrooms, gymnasiums or other designated areas. For the purposes of section 12 of Part III of Schedule V, such spaces are considered to be cafeterias.
An elementary school cafeteria supplies food and beverages to the students of the school (75% of supplies), as well as to teachers, other school staff and visitors, such as guest lecturers (25% of supplies). As more than 50% of the supplies of food and beverages are made to the students, all supplies of food and beverages, other than the exceptions noted in paragraphs 2 and 3 of this memorandum, are exempt from the GST/HST, including those made to the teachers, other school staff and visitors.
A secondary school’s parent association holds monthly meetings at the school to discuss various school-related topics. The company that supplies lunches to the students of the school also makes lunches available to those attending the parent association’s meetings, which are private meetings. Private meetings are excluded from the exemption provided under section 12 of Part III of Schedule V. Therefore, the supply of the lunches at the parent association’s meetings is not exempt under section 12 of Part III of Schedule V.
5. At some elementary and secondary schools, a supplier, such as a fast‑food chain or a private company, supplies lunches directly to students within the school. The exemption under section 12 of Part III of Schedule V applies to the supplies of such lunches, provided that the supplies are made primarily to students in a location determined to be a school cafeteria. There are no conditions placed on who may make exempt supplies to the students under section 12 of Part III of Schedule V. The basic requirements for the exemption are that the supplies be made in an elementary or secondary school cafeteria and that they be made primarily to students of the school.
6. Section 12 of Part III of Schedule V does not exempt food or beverages that are supplied through a vending machine or that are prescribed.
7. All food and beverages supplied through a vending machine are taxable, even if the vending machine is in the cafeteria serving area.
8. The School Cafeteria Food and Beverage (GST/HST) Regulations list the following prescribed food and beverages, which are not exempt under section 12 of Part III of Schedule V when sold in school cafeterias:
- carbonated beverages
- beverages included in paragraph 1(d) of Part III of Schedule VI, when sold in cans, cartons or bottles
- foods included in any of paragraphs 1(e) to 1(l) of Part III of Schedule VI, when prepackaged for sale to consumers
9. Supplies of carbonated beverages are not exempt under section 12 of Part III of Schedule V, regardless of whether they are sold in cans, cartons or bottles, or are dispensed in a school cafeteria.
10. Examples of beverages that are included in paragraph 1(d) of Part III of Schedule VI that are not exempt under section 12 of Part III of Schedule V when sold in an elementary or secondary school cafeteria in cans, cartons or bottles include non‑carbonated fruit juice beverages or fruit flavoured beverages containing less than 25% juice. However, supplies of such beverages are exempt when they are dispensed and sold in an elementary or secondary school cafeteria provided the other conditions of section 12 of Part III of Schedule V are met.
11. Examples of foods that are included in paragraphs 1(e) to 1(1) of Part III of Schedule VI that are not exempt under section 12 of Part III of Schedule V when prepackaged for sale to consumers include, but are not limited to, candies, chewing gum, chips, popcorn, pretzels, salted nuts, single servings of ice cream or frozen yoghurt products, and fruit bars (refer to Part III of Schedule VI for the full list). However, supplies of foods included in paragraphs 1(e) to 1(l) that are not prepackaged are exempt when sold in an elementary or secondary school cafeteria provided the other conditions of section 12 of Part III of Schedule V are met. For example, a prepackaged single serving tub of ice cream would not be exempt under section 12 of Part III of Schedule V, whereas a single scoop of ice cream dispensed by the cafeteria could be exempt.
12. For additional information on beverages included in paragraph 1(d) and foods that are included in paragraphs 1(e) to 1(l) of Part III of Schedule VI, refer to GST/HST Memorandum 4-3, Basic Groceries.
University and public college meal plans
Meals provided under a meal plan
13. Section 13 of Part III of Schedule V exempts “a supply of a meal to a student enrolled at a university or public college where the meal is provided under a plan that is for a period of not less than one month and under which the student purchases from the supplier for a single consideration only the right to receive at a restaurant or cafeteria at the university or college not less than 10 meals weekly throughout the period”.
14. The Act does not define the term meal. Generally, the CRA considers that a meal is food and beverage ordinarily eaten at breakfast, lunch, or dinner.
15. Subsection 123(1) defines university to mean “a recognized degree‑granting institution or an organization that operates a college affiliated with, or a research body of, such an institution”.
16. Subsection 123(1) also defines public college to mean “an organization that operates a post‑secondary college or post‑secondary technical institute
- that receives from a government or a municipality funds that are paid for the purpose of assisting the organization in the ongoing provision of educational services to the general public, and
- the primary purpose of which is to provide programs of instruction in one or more fields of vocational, technical or general education”.
17. Generally, a college that is not a public college cannot make exempt supplies of meals under a meal plan to students unless it falls within the definition of university. For additional information about public colleges and universities, refer to GST/HST Memorandum 20-2, Public Colleges, and GST/HST Memorandum 20-3, Universities.
18. Meals provided to a student under a meal plan that meets all of the following conditions (herein referred to as a qualifying meal plan) are exempt from GST/HST under section 13 of Part III of Schedule V:
- the meals are provided to a student enrolled at a university or public college who lives on or off campus
- the student pays a single consideration for the meals provided under the meal plan
- the meal plan is for a period of at least 1 month
- the meal plan includes not less than 10 meals weekly throughout the period
- the meals are served only at an on‑campus restaurant or cafeteria that is on the property of the university or public college (a private operator may own or operate the restaurant or cafeteria where the meals are served provided it is on campus)
- the meal plan does not allow purchases at any off‑campus eating establishments, such as a restaurant or fast‑food outlet
- the meal plan does not allow purchases at a mini‑mart or convenience store located on or off campus
- the meal plan does not allow purchases of food and beverage items that are not part of a meal or of non‑food items or vending machine items
19. The calculation of whether the amount payable for a meal plan is enough for 10 meals a week is a question of fact and is based on the average retail price of a meal at the university’s or public college’s on‑campus cafeterias or restaurants.
20. The CRA considers the average retail price of a meal to mean the average retail price of a meal available to students at the on‑campus restaurants and cafeterias at which the meal plan may be used. The CRA cannot set a minimum or maximum retail price that would be acceptable globally as overhead and food costs may vary from institution to institution and from eating establishment to eating establishment. It is expected that the average retail price takes into consideration a combination of the types of meals (that is generally breakfast, lunch and dinner) offered under the meal plan.
21. Meals provided under a meal plan that does not meet all of the conditions in section 13 of Part III of Schedule V are generally taxable. One of the conditions of a qualifying meal plan is that all meals must be acquired at on‑campus restaurants or cafeterias. A meal plan that allows students to also make purchases from a mini‑mart, convenience store or general store would not meet the requirements of section 13 of Part III of Schedule V. Therefore, meals supplied under this type of meal plan would not be exempt from the GST/HST under section 13 of Part III of Schedule V.
22. Generally, food or beverages that are basic groceries are zero‑rated. Many food items and beverages are not meals in and of themselves. However, any food or beverage, including a snack food, included as part of a meal under a qualifying meal plan will not affect the exempt status of the meal provided under the meal plan. That is, where the meal includes, for example, items such as candy, potato chips or similar snack foods, or carbonated beverages and the meal is provided under a qualifying meal plan, the meal, including the snack food or beverage, is exempt.
23. However, a meal plan that allows for the purchase of individual food items or beverages that are not part of a meal will not be a qualifying meal plan. The purchase of any meal under this type of meal plan is not exempt under section 13 of Part III of Schedule V.
24. Section 13 of Part III of Schedule V requires that a student pay a single consideration to the supplier for the meals provided under a meal plan. Although single consideration is not defined in the Act, subsection 123(1) defines consideration to include “any amount that is payable for a supply by operation of law”.
25. Where a student enters into an agreement for meals to be provided under a meal plan and the agreement specifies that there is a single consideration but the payment for that consideration may be made on an instalment basis, the CRA accepts that this type of arrangement meets the requirement of single consideration under section 13 of Part III of Schedule V.
26. A topping-up option is often offered to students who purchase a qualifying meal plan. The CRA considers top‑ups or the addition of funds to a qualifying meal plan to be additional consideration for the same supply. As such, the tax status of meals under a qualifying meal plan is not impacted by top‑ups or the addition of funds to the qualifying meal plan.
27. Some universities or public colleges administer their meal plans through the use of declining balance cards or similar means. A student may access one or more accounts through the card, such as an on‑campus meal plan account, an off‑campus meal plan account, or a mini‑mart or non‑food account used for laundry or bookstore purchases.
28. A meal provided under a meal plan, for which an amount is deducted from a declining balance card account is exempt under section 13 of Part III of Schedule V provided both of the following conditions are met:
- the plan is a qualifying meal plan
- the university or public college maintains a separate account for the qualifying meal plan on the declining balance card and advertises its terms and conditions separately
29. Cards issued by a university or public college to students for a qualifying meal plan are not considered to be gift cards, as set out in GST/HST Policy Statement P‑202, Gift Certificates. As such, GST/HST Policy Statement P-202 will not apply to a meal plan that meets the conditions set out in section 13 of Part III of Schedule V. However, it is a question of fact whether the university or public college is required to account for tax on the sale of cards containing an off‑campus meal plan account, a mini‑mart account or a non‑food account. Refer to GST/HST Policy Statement P‑202 for further information on the issuance of gift certificates and gift cards.
Students enrolled at a university pay an amount of $2,800 to the university. The students are issued a declining balance card through which 3 separate accounts can be accessed: an on‑campus qualifying meal plan account of $2,500, an off‑campus meal account of $150 and a mini‑mart account of $150. Each of these accounts is a separate plan.
The on‑campus meal plan account meets all of the requirements to be a qualifying meal plan. The meals are provided to students of the university at on‑campus eating establishments under a meal plan throughout the period of the plan, which is the 34‑week academic year. The university determined that the average retail price of a meal at the university is $7.25. Based on the average retail price per meal at the university, the single amount paid by a student is sufficient to provide the student with at least 10 meals each week for the period of the plan ($7.25 × 10 meals × 34 weeks = $2,465).
The university maintains separate accounts for the 3 separate plans and also advertises the terms and conditions of the 3 plans separately. The university is therefore not required to collect tax in respect of the meals provided under the qualifying meal plan. In addition, the university determines that the off‑campus meal plan and mini‑mart accounts are gift cards. As such, no tax is payable to the university at the time of issuance of the gift card.
30. The tax status of meals under a qualifying meal plan is determined at the time the student initially enters into the agreement with the supplier. If unused funds are returned to the student at the end of the term or carried over for use in the future, the tax status of the meals previously provided under the qualifying meal plan will not be impacted.
31. In addition, the return of funds due to the cancellation of a qualifying meal plan at any point through the term will not impact the tax status of meals provided prior to the cancellation of that plan. The return of unused funds is not in respect of a supply and is therefore not subject to the GST/HST.
Supply of food and beverages to a school authority, university or public college
32. Section 14 of Part III of Schedule V exempts “a supply of food and beverages, including catering services, made to a person that is a school authority, university, or public college under a contract to provide food or beverages
- to students under a plan referred to in section 13; or
- in an elementary or secondary school cafeteria primarily to students of the school, except to the extent that the food, beverages and services are provided for a reception, conference or other special occasion or event”.
University ABC offers a qualifying meal plan that provides students with lunch and dinner every day for a 3‑month semester in the university’s cafeteria. Under a contract with a third party, the university pays the third party to provide the food and beverages under the qualifying meal plan to the students of the university. The supply made to the university by the third party is exempt under section 14 of Part III of Schedule V.
33. Section 14 of Part III of Schedule V includes supplies of catering services made to a school authority, university or public college under a contract to provide food or beverages. The Act does not define catering. However, the CRA considers a caterer to be a person who, at the direction of the customer, supplies prepared meals (including buffet style) or other food or beverages and delivers the order to the premises designated by the customer where the food may be arranged, heated or served by the supplier.
34. Generally, the food is prepared or partially prepared at a site other than the site where consumption will occur. However, catering also includes situations where the caterer provides raw ingredients and possibly certain amenities but prepares the food at the premises of (or designated by) the customer where consumption occurs. The CRA makes no distinction between the provision of catering and catering services since catering is synonymous with the act of providing a catering service. For detailed information regarding caterers, refer to GST/HST Memorandum 4-3.
All GST/HST technical publications are available at GST/HST technical information.
To make a GST/HST enquiry by telephone:
- for GST/HST general enquiries, call Business Enquiries at 1‑800‑959‑5525
- for GST/HST technical enquiries, call GST/HST Rulings at 1‑800‑959‑8287
If you are located in Quebec, call Revenu Québec at 1‑800‑567‑4692 or visit their website at revenuquebec.ca.
If you are a selected listed financial institution (whether or not you are located in Quebec) and require information on the GST/HST or the QST, go to GST/HST and QST - Financial institutions, including selected listed financial institutions or:
- for general GST/HST or QST enquiries, call Business Enquiries at 1‑800‑959‑5525
- for technical GST/HST or QST enquiries, call GST/HST Rulings SLFI at 1‑855‑666‑5166
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