Citation: 2009TC362
Date: 20090710
Docket: 2008-3350(GST)I
BETWEEN:
HARRY J. WALKER,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
V.A. Miller, J.
[1]
This is an appeal from
a Notice of Confirmation dated July 16, 2008 which was issued pursuant to the Excise
Tax Act (“the Act”) for the periods ending December 31, 2001,
December 31, 2002, December 31, 2003 and December 31, 2004 (“the period”).
[2]
The issue is whether,
for the period, the Appellant is entitled to a deduction under subsection
234(2) of the Act in calculating net tax.
[3]
The Appellant is a
hunting guide. During the period, the Appellant’s services were provided in Canada to clients who were non-residents. As part of his
services, the Appellant provided tour packages that included short-term
accommodation.
[4]
The Appellant stated
that he telephoned the Canada Revenue Agency (“CRA”) to ascertain if he had to
collect GST from his clients. He said that he was informed that his services
were “GST exempt” because his clients were non-residents. From the evidence
given by the Appellant, I infer that this telephone call would have been made
to the CRA sometime in 1991 or 1992. In 2005, he was contacted by a person who
worked for the CRA and informed that he had to collect GST. After he explained
his business to this person, she told him that he did not have to collect the
GST. A few days later, this same person telephoned him again to say that he was
required to collect GST. He was given a registration number and asked to file
returns for the period in issue.
[5]
On November 24, 2005,
the Appellant filed the returns. As he did not collect the GST from his
clients, he paid the net tax himself. He stated that, in 2007, he learned about
the rebate for non-residents and he filed amended returns on June 22, 2007
wherein he sought to claim a deduction from net tax equal to 50% of the tax
collectible which he had reported in his initial returns. The deductions
claimed by the Appellant were $3,117.36, $2,587.39, $4,211.45 and $3,719.16 for
the periods ending December 31, 2001, December 31, 2002, December 31, 2003 and
December 31, 2004 respectively.
[6]
The relevant provisions
of the Act are as follows:
252.1 (2)
Accommodation rebate for
tour packages -- If
(a) a non-resident person is the
recipient of a supply made by a registrant of a tour package that includes
short-term accommodation or camping accommodation,
(b) the tour package is acquired
by the person otherwise than for supply in the ordinary course of a business of
the person of making such supplies, and
(c) the
accommodation is made available to a non-resident individual,
the Minister shall, subject to
subsection (8) and section 252.2, pay a rebate to the person equal to the tax
paid by the person in respect of the accommodation.
252.1 (8)
Rebate paid by registrant -- If
(a) a registrant makes a supply of
a tour package that includes short-term accommodation or camping accommodation
to a non-resident recipient who either is an individual or is acquiring the
tour package for use in the course of a business of the recipient or for supply
in the ordinary course of a business of the recipient of making supplies of
tour packages,
(b) the registrant pays to, or
credits in favour of, the recipient an amount on account of a rebate under
subsection (2) or (3) to which the recipient would be entitled in respect of
the accommodation if the recipient had paid the tax in respect of the supply
and had satisfied the conditions of section 252.2,
(c) the amount paid or credited is
equal to the amount that would be determined in respect of the supply under
paragraph (5)(b), and
(d) in the
case of a rebate under subsection (2),
(i) payment of the consideration
for the supply is made at a place outside Canada at which the registrant, or an agent of the
registrant, is conducting business, or
(ii) if the supply of the tour package
includes the short-term accommodation or camping accommodation and also
includes other property or services (other than meals or property or services
that are provided or rendered by the person who provides the accommodation and
in connection with it), a deposit of at least 20% of the total consideration
for the tour package is paid
(A) by the recipient to the
registrant at least 14 days before the first day on which any short-term
accommodation, or camping accommodation, included in the tour package is made
available under the agreement for the supply of the tour package, and
(B) by means of a credit card or
charge card issued by, or a cheque, draft or other bill of exchange drawn on an
account outside Canada with, a non-resident institution that is a bank,
cooperative credit society, trust company or similar institution,
the registrant may claim a
deduction under subsection 234(2) in respect of the amount paid or credited,
and the recipient is not entitled to any rebate or to any refund or remission
of tax in respect of the accommodation.
234 (2) Deduction for rebate in respect of supplies to
non-residents -- Where, in the
circumstances described in subsection 252(3), 252.1(8) or 252.4(2) or (4), a
registrant pays to, or credits in favour of, a person an amount on account of a
rebate referred to therein, the registrant may deduct the amount in determining
the net tax of the registrant for
(a) the reporting period of the
registrant that includes the particular day that is the later of the last day
on which any tax to which the rebate relates became payable and the day on
which the amount is paid or credited; or
(b) any
subsequent reporting period of the registrant for which a return is filed
within one year after the particular day.
[7]
Subsection 252.1(2) provides for a
rebate of the GST to a non-resident if certain conditions are met. Subsection
252.1(8) of the Act provides that if the non-resident is entitled to a rebate
and the registrant who makes the supply of short-term accommodation to the
non-resident pays to or credits in favour of the non-resident, an amount on
account of the rebate under subsection 252.1(2), then the registrant may claim
a deduction under subsection 234(2) in respect of the amount paid or credited
to the non-resident.
[8]
In this appeal, the Appellant has
not met the conditions in section 252.1. He did not charge his clients GST and
consequently, they would not have been eligible to claim a rebate. The
Appellant cannot claim a deduction under subsection 234(2) of the Act.
[9]
At the hearing, the Appellant
stated that as a result of misinformation that he received from the CRA he paid
all of the GST. He felt that the CRA should be held accountable.
[10]
This court does not have
jurisdiction to grant an equitable remedy. As well, in spite of the
misinformation that may have been given by the employees of the CRA, the
Minister of National Revenue cannot be estopped from assessing in accordance
with the provisions of the Act[1].
[11]
The appeal is dismissed.
Signed at Ottawa, Canada, this 10th day of July 2009.
“V.A. Miller”
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