CRA finds that the treatment by one municipality of another municipality’s excess sewage was not GST/HST exempt
It is intuitively obvious that the sharing of core municipal functions between municipalities will be GST/HST exempt, right?
Two GST/HST registered municipalities agreed that each would charge the other for the receipt and treatment of the other municipality’s excess wastewater at their respective treatment facilities. Were these charges exempted under ETA Sched. V, Pt. VI, s. 22, which applied to “a supply of a service, made by a municipality … of ... maintaining … a … sewerage … system”?
CRA acknowledged that City of Brandon had found that this wording “is broad enough to include the ‘operation’ of a … sewerage … system,” but characterized what was going on here as instead being “the acceptance, treatment and disposal of … wastewater at the [other’s] municipal wastewater treatment facilities,” so that the exemption was unavailable.
Neal Armstrong. Summary of 29 June 2018 Ruling 125593r under ETA Sched. V, Pt. VI, s. 22.