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: 179646
Business Number: […]
Dear [Client]:
Subject: GST/HST RULING
Application of the provincial point-of-sale rebate [for printed books] to the supply of […][publications]
Thank you for your letter received on September 7, 2016, concerning whether supplies of two publications, namely, […] (Product A) and […] (Product B), qualify for the point-of-sale (POS) rebate on the provincial part of the Harmonized Sales Tax (HST).
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
Our understanding of the facts is as follows:
1. […] (the Company) is […][a] book and supplies distributor. The Company’s head office is located in […][Country X], with offices located in Canada, namely, […][City 1] and […][City 2].
2. The Company is a distributor and a distributing agent for various […] products and publications.
3. […]
4. […] offers […][publications] that […]
5. The Company has requested a ruling to determine whether two […] products are eligible for the provincial point-of-sale rebate. Samples of both Product A and Product B were provided for our review.
6. Product A is in a fan style format consisting of […]. […]. It should be noted that the [publication] is held together with a single rivet. In terms of size, the [publication] is […]" wide and […]" long. The [publication] also has a distinct ISBN and UPC number.
7. Product B consists of […]. […] and is printed on […] loose-leaf style page containing […]. […] pages are available for replenishing frequently […]. Pages are arranged in a three ring binder that allows customers to remove and insert pages. The [publication] has a distinct ISBN and UPC number.
RULING REQUESTED
You would like to know if Product A and Product B qualify as printed books for the purposes of the POS rebate in respect of the provincial part of the HST.
RULING GIVEN
Based on the facts set out above, we rule that both Product A and Product B do not qualify for the POS rebate provided for printed books. Consequently, both publications are taxable at the full-rate of GST/HST.
EXPLANATION
For GST/HST purposes, most supplies of goods and services made in a participating province are taxable supplies subject to the HST. This includes the sale of most books and other similar publications. However, the participating provinces provide a POS rebate for printed books for the provincial part of the HST payable on supplies of qualifying property. Note that as of January 1, 2017, the POS rebate on supplies of printed books will no longer be available in the province of Newfoundland and Labrador.
Qualifying property includes a printed book and updates of a printed book, an audio recording all or substantially all of which is a spoken reading of a printed book, a bound or unbound printed version of scripture of any religion, and composite property.
The term "printed book" has its ordinary meaning subject to specific exclusions. Generally, a "printed book" consists of a number of printed sheets that are fastened together in some way. It may contain printed words, printed pictures, diagrams and other visual aids including Braille and music. To be classified as a printed book, the text should be continuous and complete from page to page, chapter to chapter, section to section, etc. Generally, the pages of a printed book are numbered. In the ETA, the term "printed book" is defined only by its exclusions as set out under subsection 259.1(1).
Product A does not meet the ordinary definition of a printed book. More specifically, the [publication] is not bound in a manner normally associated with printed books and opens in a fan-style format. A publication that opens in this manner would not fall within the ordinary definition of a book.
Product B is in a loose-leaf-style format with the pages being bound together within a three-ring binder. It is our view that this [publication] will fall within the ordinary definition of a printed book. However, for the purposes of the POS rebate, a book must meet the ordinary meaning of a printed book and not be excluded by any of the paragraphs to the definition of "printed book" under subsection 259.1(1).
Paragraph 259.1(1)(p) excludes from the definition of “printed book” an assemblage or collection of, or any item similar to, items included in any of paragraphs (a) to (o) of this subsection. Paragraph (l) of this subsection excludes from the definition of “printed book” an assemblage of charts. It is our view that Product B is arranged and functions in a manner similar to an assemblage of charts. […]. Product B will therefore be excluded by virtue of paragraph 259.1(1)(p) of the definition of “printed book” and consequently, not qualify for the POS rebate.
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 rulings given in this letter provided that: none of the issues discussed in the rulings 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.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (905)721-5184. 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,
Siraj Patel, CPA, CGA
Basic Groceries ad Recapture of Input Tax Credits Unit
General Operation and Boarder Issues Division
Excise and GST/HST Rulings Directorate
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