Under the provincially legislated “half-back” system in New Brunswick, a tax-inclusive deposit of 10¢ is imposed on containers for non-alcoholic beverages but only half this amount, or 5¢, is given back to a consumer on the return of the container.
Only the refundable 5¢ portion of the deposit is excluded from the tax base while the other 5¢ that is not refunded to the consumer is subject to tax on the same basis as the beverage.
You can access the Canada Revenue Agency’s Info Sheet on taxable and zero-rated beverages via our website to learn more about which product is taxable and which is zero-rated. Visit the “Important Information for Distributors” page under the “Distributors” menu. Click on the link to the CRA site, “Beverages GST/HST Info Sheet”.
To avoid the complexity of all retailers having to determine the amount of tax for the non-refundable portion of the deposit to calculate their input tax credits and remittances, special rules apply having the effect of requiring only the first supplier in the distribution chain who imposes the deposit to account for and remit tax on the taxable non-refundable portion of the deposit. We encourage each distributor to seek professional advice when in doubt of the taxability or non-taxability of the beverage/container.