26 April 2018 GST/HST Ruling 115147 - Eligibility for 83% Public Service Bodies (PSB) rebate

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, 11th floor
320 Queen Street
Ottawa ON K1A 0L5

[Addressee]

Case Number: 115147

Dear [Client]:

Subject: GST/HST RULING
Eligibility for 83% Public Service Bodies (PSB) rebate

Thank you for your letter of [mm/dd/yyyy], concerning the […] (the Facility)'s eligibility to claim the 83% public service body (PSB) rebate of the goods and services tax (GST) and the federal part of the harmonized sales tax (HST) under section 259 of the Excise Tax Act (ETA) in respect of its activities. We apologize for the delay in our response.

The HST applies in the participating provinces at the following rates: 13% in Ontario; and 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island. 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

We understand the facts to be:

1. The Facility is owned and operated by […] (the Corporation).

2. […]. The Corporation is a registered charity within the meaning assigned to that expression by subsection 248(1) of the Income Tax Act, and is a charity for purposes of the ETA.

3. The Facility is located in […][Province X].

4. The Facility provides palliative care services.

5. The Facility contains comfortable private rooms in a home-like environment for residents allowing peace, privacy and comfort. Meals are delivered to the rooms daily. There is no fee for accommodation; however, residents are responsible for paying for medications and oxygen.

6. Residents come to the Facility for end-of-life care […].

7. The average length of stay at the Facility is 9 to 14 days.

8. Medical services are provided at the Facility, which has the expertise to care for residents at the end of life, including those with special needs such as […].

9. All services rendered to the Facility’s residents are performed at the Facility.

10. Medical and caregiving staff see to the physical needs of each resident at the Facility by providing expert care 24 hours per day, seven days per week. The Facility assigns a multidisciplinary team to each resident comprised of a physician, nursing staff, care aides, social worker (as needed), chaplain, pharmacist and volunteers.

11. […]. […], the health care services provided at the Facility include medication preparation by Registered Nurses (RNs), charting, participating in rounds, patient/family consultations, and bereavement support.

[…][Facility personnel information]

12. […]. The Facility has [#] physicians (one of whom has the role of Medical Director). Physicians are not employees of the Facility, and bill directly […]([…][the provincial health authority]) for resident care services they perform at the Facility. The physicians come and go as required by resident care needs and by administrative duties such as senior management meetings and rounds. Each physician is required to see a resident at least [#] per week. However, their practice is to visit daily or more often as required.

13. Physicians are on-site daily on rotation and work under the direction of the Medical Director who establishes the rotation and the on-call response schedule. Physicians provide hands-on care daily and write medical orders as medication needs and physical care needs of the residents change. They participate in rounds [#] per week where all [#] residents are discussed and where individualized care plans are established (and/or adapted) with the multi-disciplinary team.

The physicians are responsible for ordering medications and diagnostic tests, reviewing the results and performing minor procedures. There is at least one physician on call 24 hours per day, seven days per week.

14. Physician involvement increases as residents near death, with increased attendance and increased need for patient/family/team interactions. Physicians will often need to be present on a more frequent basis near death, sometimes being called back specifically to provide care.

15. The physicians are considered "primary care physicians". As primary care physicians, they service residents who come to the Facility in situations (90% overall through the years) where the resident’s family physician has not continued to service the resident once the resident has entered the Facility.

Physicians service different numbers of residents at the Facility, which affects the amount of time they spend at the Facility each day. […]

[…]

The physicians have written Facility administrative bylaws to follow, besides the general rules of the Canadian College of Family Physicians and of the Royal College of Physicians and Surgeons. […].

16. Once a resident has been admitted to the Facility, medical care is generally provided by physicians at the Facility, and not at home. Approximately 5% of the residents will improve such that they are able to go home, to the hospital, or in most cases to a long-term care facility.

17. The nursing portion of the Facility care is considered symptom management, including dealing with conditions such as loss of appetite, nausea, weakness, difficulty breathing, bowel and bladder problems and confusion. The Facility is capable of dealing with medically unstable conditions. Nurses are not permitted to administer medication without the order of a physician.

18. Reversible conditions are treated at the Facility. These may include, for example, bladder infections with symptoms distress, and excessive pain. A hospital is needed for acute therapy surgeries (which are very rare), for blood transfusions (which are regular occurrences), and to care for some of the 5% of Facility patients who become well enough to leave the Facility.

19. Facility staff do not perform high-tech procedures such as surgery, angioplasty, chemotherapy, and radiation therapy. Medical interventions have already failed once the individual is at the point of coming to the Facility and so are not performed. Interventions at the Facility include, for example, treating stress and delirium and changing medicines. Pain is treated at the Facility. Procedures that may be performed at bedside are minimal and infrequent, but may include joint injection/aspiration, suturing of wounds. The focus of care is direct patient and family interactions, examination, team discussion, medication prescribing and monitoring.

20. The Facility differs from a hospital with respect to which conditions/needs get treated/addressed. The Facility provides treatment of conditions such as pain, nausea, shortness of breath, anxiety, weakness of muscles, fears of abandonment, spiritual aspects, bowel problems, delirium, appetite and insomnia, whereas hospitals generally deal with diseases and conditions such as diabetes, high blood pressure and heart attacks.

Unmanageable symptoms that the Facility cannot handle would be taken care of at a hospital, either before or after a resident is admitted to the Facility. Uncontrolled pain is not an unmanageable symptom for the Facility.

21. The feeding tube policy at the Facility is generally that the feeding tube will continue if an individual already has a feeding tube at admission, but the staff won't start a new feeding tube if an individual needs one.

22. I.V. hydration is not routinely offered at the Facility, but is offered if fluid is expected to help the patient's comfort.

23. The Position Description for the Medical Director indicates that the roles and responsibilities include: […]

24. The Facility utilizes specialized equipment in order to provide services to its residents. […].

25. The Facility carries on its own activities only. It does not organize nor coordinate the making of supplies by other parties.

26. [The provincial health authority] funds the Facility […]. Specifically, it provides funds for the services of various staff (e.g., Director of Care, nurses). The only other income the Facility receives is from donations and sundry revenues. [The provincial health authority] funding and donations comprise approximately […]% of total revenues.

27. The Facility is a contracted provider and delivers residential hospice care […].

28. The Facility is […]

The Corporation receives […] letter […] in regards to services at the Facility. The letter sets out the […] funding, standards, policies, directives and reporting requirements with respect to the services of the Facility.

29. A current […][Agreement] between [the provincial health authority] and the Corporation, which covers the Facility, indicates […]

[…]

The Agreement indicates funding for the [yyyy-yyyy] year to include for services of Registered Nurses, […].

RULING REQUESTED

You would like to know whether the Corporation is entitled to claim an 83% PSB rebate of the GST and the federal part of the HST as a facility operator.

RULING GIVEN

Based on the facts set out above, we rule that the Corporation is a facility operator making facility supplies at a qualifying facility, that is, the Facility.

As such, the Corporation is eligible to claim an 83% PSB rebate of the GST and the federal part of the HST for non-creditable tax charged (Footnote 1) in respect of property or services to the extent that the property or services are for consumption, use or supply in activities engaged in by the Corporation in the course of operating the Facility for use in making facility supplies, or in the course of making facility supplies.

This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.

EXPLANATION

To be eligible for an 83% PSB rebate of the GST and the federal part of the HST paid or payable on its purchases and expenses related to the making of facility supplies, a person must be a “hospital authority”, a “facility operator” or an “external supplier”.

Hospital Authority

A “hospital authority” is defined in subsection 123(1) as “an organization that operates a public hospital and that is designated by the Minister [of National Revenue] as a hospital authority” for GST/HST purposes.

[…]

As the Corporation is not a “hospital authority”, to determine if there is eligibility for the 83% PSB rebate, it is necessary to determine if the Corporation is a “facility operator” or an “external supplier”.

Facility Operator

A “facility operator” is defined in subsection 259(1) as meaning “a charity, a public institution or a qualifying non-profit organization (other than a hospital authority), that operates a qualifying facility”.

As the Corporation is a charity, it meets the first requirement of the definition. In order to meet the second requirement, the Corporation must operate a “qualifying facility”.

Subsection 259(2.1) sets out three criteria that must be met for a facility, or part of a facility, other than a public hospital, to be a qualifying facility, for a fiscal year, or any part of a fiscal year, of the operator of the facility or part.

A facility or part of a facility will be considered a qualifying facility if:

(a) supplies of services that are ordinarily rendered during that fiscal year or part to the public at the facility or part would be facility supplies if the references in the definition of “facility supply” in subsection 259(1) to “public hospital or qualifying facility” were references to the facility or part;

(b) an amount, other than a nominal amount, is paid or payable to the operator as qualifying funding in respect of the facility or part for the fiscal year or part; and

(c) an accreditation, licence or other authorization that is recognized or provided for under a law of Canada or a province in respect of facilities for the provision of health care services applies to the facility or part during that fiscal year or part.

The requirements contained in (a) to (c) above must be met in order for a particular facility to be a “qualifying facility” for purposes of section 259. A discussion of these requirements follows.

Facility Supply

Subsection 259(1) defines the term “facility supply” as “an exempt supply (other than a prescribed supply) of property or a service in respect of which

(a) the property is made available, or the service is rendered, to an individual at a public hospital or qualifying facility as part of a medically necessary process of health care for the individual for the purpose of maintaining health, preventing disease, diagnosing or treating an injury, illness or disability or providing palliative health care, which process

(i) is undertaken in whole or in part at the public hospital or qualifying facility,

(ii) is reasonably expected to take place under the active direction or supervision, or with the active involvement, of

(A) a physician acting in the course of the practise of medicine,

(B) a midwife acting in the course of the practise of midwifery,

(C) if a physician is not readily accessible in the geographic area in which the process takes place, a nurse practitioner acting in the course of the practise of a nurse practitioner, or

(D) a prescribed person acting in prescribed circumstances, and

(iii) in the case of chronic care that requires the individual to stay overnight at the public hospital or qualifying facility, requires or is reasonably expected to require that

(A) a registered nurse be at the public hospital or qualifying facility at all times when the individual is at the public hospital or qualifying facility,

(B) a physician or, if a physician is not readily accessible in the geographic area in which the process takes place, a nurse practitioner, be at, or be on-call to attend at, the public hospital or qualifying facility at all times when the individual is at the public hospital or qualifying facility,

(C) throughout the process, the individual be subject to medical management and receive a range of therapeutic health care services that includes registered nursing care, and

(D) it not be the case that all or substantially all of each calendar day or part during which the individual stays at the public hospital or qualifying facility is time during which the individual does not receive therapeutic health care services referred to in clause (C), and

(b) if the supplier does not operate the public hospital or qualifying facility, an amount, other than a nominal amount, is paid or payable as medical funding to the supplier.”

A “physician” is defined in subsection 259(1) as “a person who is entitled under the laws of a province to practise the profession of medicine”.

The definition of “facility supply” is to be applied on a supply-by-supply basis. To be a “facility supply”, the property made available or the service rendered to an individual at the public hospital or qualifying facility must be an exempt supply (other than a prescribed supply). Exempt supplies are listed in Schedule V to the ETA.

Section 1 of Part V.1 of Schedule V exempts supplies of property or a service made by a charity unless specifically excluded under paragraphs (a) to (p) of that section. As the Corporation is a charity, the supplies it makes to the Facility’s residents would generally be exempt under section 1 of Part V.1 of Schedule V.

Section 2 of Part II of Schedule V may also apply to exempt supplies of services that the Corporation makes (unless there is interference to the exemption due to sections 1.1 or 1.2 of Part II of Schedule V (Footnote 2)). Section 2 of Part II of Schedule V exempts a supply of an institutional health care service made by the operator of a health care facility if the institutional health care service is rendered to a patient or resident of the facility. The terms “institutional health care service” and “health care facility” are defined in section 1 of Part II of Schedule V.

Paragraph (a), subparagraphs (a)(i) and (a)(ii), and clause (a)(ii)(A) of the definition of “facility supply” further require that the exempt supply of property be made available, or the exempt supply of a service be rendered, at a public hospital or qualifying facility and be part of a medically necessary process of health care for an individual for the purpose of maintaining health, preventing disease, diagnosing or treating an injury, illness or disability or providing palliative care. This process must be undertaken in whole or in part at the public hospital or qualifying facility and reasonably be expected to take place under the active direction or supervision, or with the active involvement, of a physician acting in the course of practise of medicine (or in certain circumstances, a midwife, a nurse practitioner or a prescribed person in prescribed circumstances).

It is our understanding that palliative care differs from chronic care. Therefore, it is not necessary for elements referred to in clauses (a)(iii)(A) to (D) of the definition of “facility supply” to be met in order for a supply to qualify as a “facility supply”, where only palliative care is being provided, as in the present case.

The decision of the Tax Court of Canada in Elim Housing Society v The Queen (2013-148(GST)G) addressed the question as to whether Elim Housing Society (Elim) was a facility operator operating a qualifying facility. In this decision, the judge made the determination that Elim was entitled to claim the 83% PSB rebate as a facility operator operating a qualifying facility based on the presence of the following elements which indicated Elim to be making facility supplies:

• all of the residents had conditions that required “complex care” as that term was defined in a policy manual of the B.C. Ministry of Health Services;
• the residents were extremely dependent on care either by reason of mental or physical impairment, or both;
• residents were under the care of a physician, who was either associated with the facility or had a pre-existing relationship with the resident;
• a tailored care plan was created for each resident, documented and implemented:

• detailed records were kept on the implementation of the care plans,
• medication reviews were required every six months, and
• inter-disciplinary meetings were held annually;

• physicians visited residents frequently (e.g., roughly on a bi-weekly basis);
• physicians were at, or on-call to attend, the facility at all times;
• physicians provided substantial medical care (e.g., addressed medical concerns, participated in medication reviews, attended interdisciplinary meetings);
• registered nurses were at the facility at all times, and nurses were in regular communication with physicians for prescription or advice;
• the facility received funding for 2.8 hours of care per resident per day (the calculation was based on scheduled staffing hours);
• the care provided was of a different type than ordinary assistance with activities of daily living that a more robust individual might require.

Even though Elim was providing chronic care that required individuals to stay overnight at a qualifying facility, whereas the Corporation is providing palliative care services at the Facility, relevant elements found in Elim are also found in the Facility. After comparing the services and the care provided at the Facility to the relevant elements described in the Elim decision, we are of the view that facility supplies are provided at the Facility by the Corporation.

As mentioned above, subsection 259(2.1) sets out three criteria that must be met in order for a facility or part of a facility to be considered a qualifying facility for all or part of a fiscal year. The first criterion that must be met, under paragraph 259(2.1)(a), is that the exempt supplies made at the qualifying facility must be facility supplies. The exempt supplies that are facility supplies made by the Facility would meet this first criterion.

Qualifying Funding

The second criterion that must be met under paragraph 259(2.1)(b) for a facility to be a “qualifying facility” is that an amount, other than a nominal amount, is paid or payable to the operator as qualifying funding in respect of the facility or part for the fiscal year or part.

Subsection 259(1) defines “qualifying funding” of the operator of a facility for all or part of a fiscal year of the operator as meaning “a readily ascertainable amount of money (including a forgivable loan but not including any other loan or a refund, remission or rebate of, or credit in respect of, taxes, duties or fees imposed under any statute) that is paid or payable to the operator in respect of the delivery of health care services to the public for the purpose of financially assisting in operating the facility during the fiscal year or part, as consideration for an exempt supply of making the facility available for use in making facility supplies at the facility during the fiscal year or part or as consideration for facility supplies of property that are made available, or services that are rendered, at the facility during the fiscal year or part and is paid or payable by

(a) a government, or

(b) a person that is a charity, a public institution or a qualifying non-profit organization

(i) one of the purposes of which is organizing or coordinating the delivery of health care services to the public, and

(ii) in respect of which it is reasonable to expect that a government will be the primary source of funding for the activities of the person that are in respect of the delivery of health care services to the public during the fiscal year of the person in which the supply is made.”

The funding provided for the Facility operations by [the provincial health authority] meets the requirements of the definition of “qualifying funding”. This criterion under paragraph 259(2.1)(b) is thus satisfied.

Accreditation, licence or other authorization

The third criterion that must be met under paragraph 259(2.1)(c) for a facility, or part of a facility, other than a public hospital, to be a qualifying facility for a fiscal year, or any part of a fiscal year of the operator of the facility, or part, is that an accreditation, licence or other authorization that is recognized or provided for under a law of Canada or a province in respect of facilities for the provision of health care services applies to the facility or part during that fiscal year or part.

The Facility does not have an accreditation nor a licence that is recognized or provided for under a law of Canada or a province in respect of facilities for the provision of health care services applying to the Facility. […]

[…]

We consider the third criterion that must be met under paragraph 259(2.1)(c) for a facility to be a qualifying facility to be satisfied.

Overall summary

To summarize, the Facility meets all of the requirements of paragraphs (a) to (c) of the definition of “qualifying facility” in subsection 259(2.1) and, as a result, the Corporation is a facility operator for purposes of section 259. Accordingly, the Corporation is qualifies for an 83% PSB rebate of the GST and the federal part of the HST for non-creditable tax charged in respect of property and services, to the extent that the property and services are for consumption, use or supply in activities engaged in by the Corporation in the course of operating the Facility for use in making facility supplies, or in the course of making facility supplies.

For supplies that are made which are not facility supplies, the 83% PSB rebate may still be available if the supplies are “ancillary supplies” or “home medical supplies”.

As the Corporation is a facility operator, it is not an external supplier, since the definition of “external supplier” in subsection 259(1) excludes a facility operator.

ADDITIONAL INFORMATION

As there is no indication that the Corporation is involved in the provision of ancillary supplies or home medical supplies, we offer the following information for your reference.

Ancillary supplies

Subsection 259(1) defines an “ancillary supply” to mean

“a) an exempt supply of a service of organizing or coordinating the making of facility supplies or home medical supplies in respect of which supply an amount, other than a nominal amount, is paid or payable to the supplier as medical funding, or

(b) the portion of an exempt supply (other than a facility supply, a home medical supply or a prescribed supply) of property or a service (other than a financial service) that represents the extent to which the property or service is, or is reasonably expected to be, consumed or used for making a facility supply and in respect of which portion an amount, other than a nominal amount, is paid or payable to the supplier as medical funding.”

Home medical supply

Subsection 259(1) defines a “home medical supply” to mean “an exempt supply (other than a facility supply or a prescribed supply) of property or a service

(a) that is made

(i) as part of a medically necessary process of health care for an individual for the purpose of maintaining health, preventing disease, diagnosing or treating an injury, illness or disability or providing palliative health care, and

(ii) after a physician acting in the course of the practise of medicine, or a prescribed person acting in prescribed circumstances, has identified or confirmed that it is appropriate for the process to take place at the individual’s place of residence or lodging (other than a public hospital or a qualifying facility),

(b) in respect of which the property is made available, or the service is rendered, to the individual at the individual’s place of residence or lodging (other than a public hospital or a qualifying facility), on the authorization of a person who is responsible for coordinating the process and under circumstances in which it is reasonable to expect that the person will carry out that responsibility in consultation with, or with ongoing reference to instructions for the process given by, a physician acting in the course of the practise of medicine, or a prescribed person acting in prescribed circumstances,

(c) all or substantially all of which is of property or a service other than meals, accommodation, domestic services of an ordinary household nature, assistance with the activities of daily living and social, recreational and other related services to meet the psycho-social needs of the individual, and

(d) in respect of which an amount, other than a nominal amount, is paid or payable as medical funding to the supplier.”

Subsection 259(1) defines “medical funding” of a supplier in respect of a supply to be “an amount of money (including a forgivable loan but not including any other loan or a refund, remission or rebate of, or credit in respect of, taxes, duties or fees imposed under any statute) that is paid or payable to the supplier in respect of health care services for the purpose of financially assisting the supplier in making the supply or as consideration for the supply by

(a) a government, or

(b) a person that is a charity, a public institution or a qualifying non-profit organization

(i) one of the purposes of which is organizing or coordinating the delivery of health care services to the public, and

(ii) in respect of which it is reasonable to expect that a government will be the primary source of funding for the activities of the person that are in respect of the delivery of health care services to the public during the fiscal year of the person in which the supply is made.”

Calculation of the PSB rebate

The rules in section 259 of the ETA provide that the PSB rebate is calculated and claimed on a claim period by claim period basis. The claim periods of a GST/HST registrant are the same as the reporting periods for its GST/HST returns (i.e., annually, quarterly or monthly). A PSB that is not a GST/HST registrant has two claim periods per fiscal year – the first six months and the last six months of its fiscal year.

A PSB claims its rebate on a property-by-property or service-by-service basis. It is the intended consumption, use or supply of a particular property or service at the relevant time that determines the PSB rebate entitlement for the non-creditable GST or HST paid on that property or service, not the overall activities of the PSB. Generally, the relevant time will be the time the supply was made to, or the property was imported or brought into [Province X] by, the Corporation.

The entitlement to an 83% PSB rebate may be limited and require apportionment where the tax paid or payable is for activities that do not qualify for the rebate, unless subsection 259(14) applies.

Subsection 259(14) provides that:

“For the purposes of this section, if a person incurs all or substantially all of the tax that is included in determining the amount of the non-creditable tax charged in respect of property or a service for a claim period of the person acting in the person's capacity as a hospital authority, a facility operator or an external supplier, the person is deemed to have incurred all of the tax that is included in determining that amount in the course of fulfilling the person's responsibilities as a hospital authority, a facility operator or an external supplier, as the case may be.”

The CRA defines “all or substantially all” to mean 90% or more. Generally, subsection 259(14) means that where the Corporation incurs 90% or more of the GST/HST paid or payable on a property or a service acquired in its capacity as a facility operator (e.g., for use in making facility supplies), all of that GST/HST is deemed to have been incurred in that capacity. As such, the Corporation could claim a PSB rebate for that property or service at the rate of 83% for the GST and the federal part of the HST. For example, if the Corporation incurs GST/HST on its utilities, and the Corporation determines it incurs 93% of the GST/HST in its activities as a facility operator for making facility supplies, the Corporation, may claim 100% of the GST/HST it pays on the utilities using the 83% PSB rebate rate.

Please note that the wording of subsection 259(14) requires an allocation to be performed for each property or service identified in the claim period.

Rebate for purchases that do not qualify for 83% rebate

A[0]s a charity for purposes of the GST/HST, the Corporation is eligible to claim a 50% PSB rebate of the GST and the federal part of the HST paid or payable on eligible purchases and expenses intended for consumption, use or supply in activities engaged in by the Corporation otherwise than in the course of operating the Facility for use in making facility supplies, or in the course of making facility supplies.

PSB rebates from previous periods

The Corporation may find that it has GST/HST that was paid or payable but has not been claimed in a rebate or that it has claimed rebates in respect of certain activities at an incorrect rate. The requirements for claiming such additional rebate amounts are not the same and are described in detail below.

Where a person has made an application for a PSB rebate for a particular claim period and later discovers additional GST/HST that was paid or payable in that claim period but was not claimed, subsection 259(6.1) may apply. Where certain conditions are met, new subsection 259(6.1) allows a PSB to claim a rebate in respect of property or a service for a particular claim period in a rebate application for a subsequent claim period ending after September 8, 2017. If a PSB has not claimed a rebate in respect of property or a service for a particular claim period, new subsection 259(6.1) allows the rebate to be carried forward where the following four conditions are met:

• The PSB did not claim the rebate in the application for any other claim period;
• The application for the subsequent claim period is filed within two years after

• if the person is a registrant, the day on or before which the person is required to file its GST/HST return for the particular claim period, and
• if the person is not a registrant, the day that is three months after the last day of the particular claim period;

• The PSB did not change the claimant type under which it was eligible to claim PSB rebates at any time from the beginning of the claim period in which the GST/HST was paid or payable to the end of the subsequent claim period; and
• The applicable rebate factor(s) did not change at any time from the beginning of the claim period in which the GST/HST was paid or payable to the end of the subsequent claim period.

Subsection 259(6.1) does not apply in situations where a person has claimed a PSB rebate in respect of a property or service and later finds out that it was eligible to claim the rebate at a higher rate. If the Corporation has already claimed a PSB rebate for a claim period and subsequently discovers that the rebate was not claimed at the proper rate, the Corporation must adjust the previously filed rebate application to claim a PSB rebate at the higher rate. The Corporation cannot include the additional rebate amount in the PSB rebate application for a different claim period. For more information on how to adjust a previously filed rebate claim, see "How do you make changes to a rebate application you already filed?" in GST/HST Guide RC4034, GST/HST Public Service Bodies' Rebate. A reassessment or additional assessment of a rebate claim shall not normally be made more than four years after the day the application for the rebate was filed.

For more information on the calculation of the rebate, please refer to the same GST/HST Guide RC4034, GST/HST Public Service Bodies' Rebate. This guide is available on our website.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 306-517-0416. 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,

John Ware
Health Care Sectors Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate

FOOTNOTES

1 In general terms, "non-creditable tax charged" means the GST/HST paid or payable on property or services for which the Corporation cannot claim an input tax credit, rebate, refund or remission other than a PSB rebate.

2 Section 1.1 of Part II of Schedule V provides that, “For the purposes of this Part, other than section 9, a cosmetic service supply and a supply, in respect of a cosmetic service supply, that is not made for medical or reconstructive purposes are deemed not to be included in this Part.”

A “cosmetic service supply” is defined in section 1 of Part II of Schedule V to mean, “a supply of property or a service that is made for cosmetic purposes and not for medical or reconstructive purposes”.

Section 1.2 of Part II of Schedule V provides that, “For the purposes of this Part, other than sections 9 and 11 to 14, a supply that is not a qualifying health care supply is deemed not to be included in this Part.”

A “qualifying health case supply” is defined in section 1 of Part II of Schedule V to mean, “a supply of property or a service that is made for the purpose of

(a) maintaining health,
(b) preventing disease,
(c) treating, relieving or remediating an injury, illness, disorder or disability,
(d) assisting (other than financially) an individual in coping with an injury, illness, disorder or disability, or
(e) providing palliative health care.”