Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 164704
Business Number: […]
Dear [Client]:
Subject: GST/HST RULING
Application of GST/HST to Services of Instruction
Thank you for your fax of [mm/dd/yyyy], concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to services of instruction in first aid. We apologize for the delay in our response.
The HST applies in the participating provinces at the following rates: 13% in Ontario, New Brunswick and Newfoundland and Labrador, 14% in Prince Edward Island and 15% in Nova Scotia. The GST applies in the rest of Canada at the rate of 5%.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
STATEMENT OF FACTS
Based on your fax, we understand the facts are as follows:
1. You are a sole proprietor that operates as […][the Company], in the capacity as a training partner with Red Cross.
2. Your business was set up to teach first aid courses.
3. You have been a certified Red Cross First Aid Instructor for [#] years and currently have [#] years’ experience as a Lifesaving Instructor.
4. You […][also have other training in healthcare].
5. [The Company] will offer the following standalone training courses that are approved by […]:
Standard First Aid & CPR C/AED
Emergency First Aid & CPR B
CPR C/AED
CPR Recertification
Babysitting
All courses include a Red Cross manual and wallet certification card; all full courses are valid for three years.
RULING REQUESTED
You would like to know whether the courses you provide are exempt from GST/HST under section 8 of Part III of Schedule V.
RULING GIVEN
Based on the facts set out above, we rule that your services of instruction in first aid, CPR and babysitting are taxable supplies and are not exempt under section 8 of Part III of Schedule V.
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the Canada Revenue Agency (CRA) is bound by the ruling given in this letter provided that: none of the issues discussed in the ruling are currently under audit, objection, or appeal; no future changes to the ETA, regulations or the CRA’s interpretative policy affect its validity; and all relevant facts and transactions have been fully and accurately disclosed.
EXPLANATION
Part III of Schedule V exempts certain supplies related to educational services provided by educational institutions. In particular, services of instruction provided to students who have enrolled in eligible courses or programs offered by certain educational institutions, such as elementary and secondary schools, vocational schools, public colleges and universities, are exempt. For purposes of the GST/HST, the tax treatment of instructional services may vary depending on the nature of the supplier (for example, type of educational institution) and the types of services that are provided (for example, instruction that is recreational vs occupational).
Instructional services provided by a self-employed coach, instructor, teacher or other type of individual educator are normally taxable supplies unless they are music lessons, or services of tutoring or instructing an individual in “a course that is approved for credit by, or that follows a curriculum designated by,” an [elementary or secondary] school authority.
Section 8 of Part III of Schedule V provides, in part, a specific exemption from GST/HST for a supply made by a vocational school of a service of instructing individuals in, or administering examinations in respect of, courses leading to certificates, diplomas, licences, or similar documents, or classes or ratings in respect of licences, that attest to the competence of individuals to practise or perform a trade or vocation, except where the supplier has made an election under this section in prescribed form containing prescribed information.
For an organization to be considered a vocational school, and thus be treated in a manner similar to a public college or similar institution, it must be established and operated primarily to provide correspondence courses, or instruction in courses, that develop or enhance students’ occupational skills. To be exempt, courses must be designed primarily to develop occupational skills and must be part of a program leading to a diploma or certification of competence similar to that provided by a public college or similar institution. While standalone first aid courses may be beneficial and in some cases a job requirement, on their own they would not be considered to lead to an occupation. Hence, a supplier that only offers courses that occur during a brief, concentrated period of time, such as a day or several consecutive days, cannot offer a progression and depth of learning that would lead to a diploma or certification of competence in a specific vocation.
Generally, vocational schools have all or some of the following characteristics:
* The organization is normally a corporation or an unincorporated association of some type, not an individual;
* The organization identifies or advertises itself as a school and is known publically as a school;
* The organization offers courses or programs following a scheduled curriculum under which the courses progress in the depth of the learning from semester to semester;
* The organization has a regularly enrolled student body who form a class or classes;
* The organization is paid by the students, or their parents if they are under the provisional age of majority, for the service of instruction they receive; and
* The organization owns, rents or leases a place from where students are provided correspondence courses or instruction in courses.
In this instance, it has not been established that you are in fact operating a vocational school. In addition, it is our view that your services of instruction would not be in respect of courses leading to certificates, diplomas, licences or similar documents, or classes or ratings in respect of licences, that attest to the competence of individuals to practise a trade or vocation. As such, the services of instruction are not exempt under section 8 of Part III of Schedule V.
ADDITIONAL INFORMATION
In general, every person who makes a taxable supply in Canada in the course of a commercial activity engaged in by the person in Canada is required to register for GST/HST purposes. An exception to this requirement is where a person is a “small supplier”. A person (who is not a charity or public service body) is a small supplier during any particular calendar quarter and the following month if the total value of the consideration for world-wide taxable supplies (other than supplies of financial services, sales of capital property, and goodwill attributable to the sale of a business) made by the person, or an associate of the person, at the beginning of the particular calendar quarter, that became due, or was paid without becoming due, in the previous four calendar quarters does not exceed $30,000.
A person must make a determination at the end of each calendar quarter as to whether they continue to qualify as a small supplier. A person who no longer qualifies as a small supplier is required to register and must apply to the Minister for registration before the thirtieth day after the day the person first makes a taxable supply in the course of the commercial activity in Canada otherwise than as a small supplier.
For further information on GST/HST registration, collection and remittance of tax, and input tax credit entitlement, please refer to Guide RC4022, General Information for GST/HST Registrants. This publication is available on the CRA’s website at: www.cra-arc.gc.ca/E/pub/gp/rc4022.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-952-9264. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Yours truly,
C. Christmas
Aboriginal Affairs and Educational Sectors Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
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