CRA finds that a “fee” charged by a an auto dealer for assigning a credit agreement to a lender was part of the GST/HST exempt consideration for the assignment

An auto dealer, which sold conditional sales contracts or credit agreements arising from its sales to customers to a lender, would also be paid a separately-stated fee by the lender. CRA stated:

A fee received by the Dealer from a lender for the assignment of a conditional sales contract or credit agreement forms part of the consideration received for the assignment of the contract, and therefore would not be subject to the GST/HST as the assignment of the contract is an exempt supply.

Neal Armstrong. Summary of 24 January 2018 Ruling 156434 under ETA s. 123(1) – financial service – para. (d) and s. 123(1) – debt security.