Engaging ITC or change-of use rules
11. Where an election has been made under section 6 and/or section 8 of Part III of Schedule V, a GST/HST registrant supplier may be eligible to claim an input tax credit (ITC) for the GST/HST paid or payable by the registrant on property or a service based on the extent to which the property or service is acquired by the registrant for consumption, use or supply in the course of the registrant’s commercial activities, where all of the conditions for claiming an ITC are met. Where the GST/HST registrant supplier has made the election, it may be required to apply the change-in-use rules for capital personal property and capital real property.
12. If a supplier revokes a previously made election, it … may be required to apply the change-in-use rules for capital personal property and capital real property.
Election not filed
14. There is no need to submit the election form to the CRA, but it must be retained in the supplier’s books and records while an election is in effect and for 6 years from the end of the year to which an election relates.
Election must be made under both sections if both apply, but single form used
16. If a particular supply meets the requirements for exemption under both section 6 and section 8 of Part III of Schedule V, the supplier must make an election under both sections to ensure that the supply will not be exempt under either of these sections. Although a single form may be used to make the elections, the Act is clear that these are 2 separate exempting provisions that have different criteria and different persons who may elect. Where the criteria of both exempting provisions are met, a person must make both elections so that neither exempting provision will apply.
Other exemptions override election
17. Even where an election is made under section 6 and/or section 8 of Part III of Schedule V, the supply will remain exempt if it meets the requirements of another section of Schedule V. For example, section 7 of Part III of Schedule V exempts “a supply made by a school authority, public college or university of a service of instructing individuals in, or administering examinations in respect of, courses for which credit may be obtained toward a diploma or degree”, and section 1 of Part V.1 of Schedule V provides for a general exemption for supplies made by charities except for those supplies listed in that section.
