Excise and GST/HST News – No. 96 under "University and public college meal plans" June 2015

Single consideration

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".

Top-ups

In addition, the CRA considers "top-ups", or the addition of funds to a qualifying meal plan, to be additional consideration for the same supply for GST/HST purposes. As such, the tax status of meals provided under a qualifying meal plan is not impacted by "top-ups" or the addition of funds to the qualifying meal plan.

Refund of balance

The tax status of a supply for GST/HST purposes is to be determined at the time the student initially enters into the agreement with the supplier and will not be affected if, at the end of the plan period, unused funds are refunded or carried over for use in the future.

Sched. V, Part III, s. 13 exempts the supply, under a meal plan that is for at least one month, by universities to their students of the right to receive at least 10 meals weekly throughout the meal plan period for a single consideration. CRA considers that these requirements are not breached if there are "top-ups," i.e., the addition of funds to the plan, and that:

The tax status of a supply… is to be determined at the time the student initially enters into the agreement with the supplier and will not be affected if, at the end of the plan period, unused funds are refunded or carried over for use in the future…[or] the plan is cancelled… and unused funds are refunded.