CRA has issued a GST/HST Memorandum on the elections to render exempt supplies of educational services taxable

Sched. V. Pt. III, s. 6 and 8 permit what otherwise would be exempt supplies of educational, training or examination services under those provisions by one of the educational, trade or professional bodies referred to therein to be rendered as taxable supplies by virtue of the making of an election to that effect. CRA has issued a new GST/HST Memorandum discussing these elections. Points made include:

  • Making the election results in the body having a commercial activity and may generate input tax credits, and may also cause the change-of-use rules to apply, thereby generating further credit.
  • However, the change-of-use rules could generate a tax liability if the election subsequently is revoked.
  • There is no need to submit the election form to CRA.
  • If a particular supply otherwise would be exempted both under ss. 6 and 8, the supplier must elect under both sections to ensure that the supply will not be exempt. However, a single election form may be used.
  • If other exemptions apply to the supply (e.g., under Sched. V. Pt. III, s. 7 or Sched. V. Pt. V.1, s. 1, their exempt status will apply to effectively override the election.

Neal Armstrong. Summaries of GST/HST Memorandum 20-9 “Election to Make Exempt Supplies of Educational Services Taxable” December 2019 under ETA Sched. V. Pt. III, s. 6 and s. 8.