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: 125678r
Dear [Client]:
Subject: GST/HST RULING
[…][Entitlement to Ontario PSB rebate using the rebate factor of a school authority]
We are writing regarding our previous ruling issued to you on April 17, 2013, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to […][the Institution] and whether [the Institution] is entitled to claim a Public Service Body (PSB) rebate using the rebate factor of a school authority, which is 68% of the non-creditable GST charged and the federal non creditable HST charged, and 93% of the provincial non creditable HST charged, rather than the rebate factor for a charity.
This letter replaces our original interpretation concerning [the Institution]’s PSB rebate entitlement provided in the letter issued to you on April 17, 2013. Please note that the other ruling issued to you on April 17, 2013, regarding [the Institution]’s satisfaction of the definition of a “school authority” is not impacted by this letter. We apologize for any inconvenience this may cause.
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:
a) [The Institution] was incorporated under the Ontario Corporations Act on [mm/dd/yyyy].
b) [The Institution] has been a registered charity (within the meaning assigned by subsection 248(1) of the Income Tax Act) since [mm/dd/yyyy], and is therefore established and operated for a purpose other than profit. Its charity number is […].
c) [The Institution] only operates in the province of Ontario.
d) Being both a registered charity and a school authority, [the Institution] meets the definition of a “public institution” under subsection 123(1).
e) As a school authority that is established and operated otherwise than for profit, [The Institution] meets the definition of “selected public service body” under subsection 259(1).
f) [The Institution] is not a registrant for GST/HST purposes, however it has had a GST/HST number since [mm/dd/yyyy], because it claims the PSB rebate as a selected public service body, at the school authority rate.
g) [The Institution] mostly operates in the capacity of a school, but it also carries on other activities, […]. […][The Institution’s website] indicates that […] of the fees charged yearly are for […][other activities].
RULING REQUESTED
We understand that you would like confirmation that [the Institution] is eligible for the PSB rebate using the rebate factor as a school authority, rather than the lower rebate factor as a charity.
RULING GIVEN
Based on the facts set out above, we rule that [the Institution] is eligible to claim a PSB rebate using the rebate factor as a school authority.
The rebate factor for a school authority is 68% of the non-creditable GST charged and the federal non creditable HST charged 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 Institution] in the capacity of a school authority. For all other activities, [the Institution] is eligible to claim a 50% PSB rebate of the non-creditable GST charged and the federal non creditable HST charged.
In addition, [the Institution], as a school authority resident only in Ontario, is also eligible to claim a 93% PSB rebate of the provincial non creditable HST charged 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 Institution] in Ontario in the capacity of a school authority. For all other activities, [the Institution] is eligible to claim an 82% PSB rebate of the provincial non creditable HST charged.
EXPLANATION
Pursuant to Section 259, certain PSBs are eligible to claim a PSB rebate of a percentage of the federal non creditable HST charged and provincial non creditable HST charged.
Generally, non-creditable tax charged is the GST/HST paid or payable on eligible purchases and expenses that you cannot recover in any way (such as input tax credits, other rebates, or refunded or credited GST/HST from suppliers), other than by claiming the public service bodies' rebate.
A PSB is eligible for a PSB rebate if it is a charity, a qualifying non-profit organization or a selected public service body on the last day of a claim period or on the last day of the fiscal year that includes that claim period.
A “selected public service body” includes, among other things, a school authority that is established and operated otherwise than for profit.
A “public institution” includes, among other things, a registered charity (within the meaning assigned by subsection 248(1) of the Income Tax Act) that is a school authority. As such [the Institution] is a public institution.
A “charity” means a registered charity or registered Canadian amateur athletic association for income tax purposes, but does not include a public institution.
As such, [the Institution] is not a “charity” for purposes of the ETA, because the definition of a charity in the ETA excludes public institutions.
There are specific apportionment rules under subsection 259(4.1) for charities, public institutions, or qualifying non-profit organizations that are selected public service bodies that act in different capacities. These selected public service bodies must apportion their rebates in relation to their activities.
In the case of [the Institution], the apportionment must be between its inputs consumed in the capacity of a school authority, and inputs consumed in other activities.
Federal Part of the HST
As a school authority, [the Institution] is entitled to claim a 68% PSB rebate of the non-creditable GST charged and the federal non creditable HST charged 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 Institution] in the course of operating an elementary or secondary school. To the extent that property or services were acquired by [the Institution] for other activities, [the Institution] is eligible to claim a 50% PSB rebate of the non-creditable GST charged and the federal non creditable HST charged.
Provincial Part of the HST
As a school authority resident only in Ontario, [the Institution] is entitled to claim a 93% PSB rebate of the provincial non creditable HST charged 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 Institution] in the course of operating an elementary or secondary school in Ontario. To the extent that property or services were acquired by [the Institution] for other activities in Ontario, [the Institution] is eligible to claim an 82% PSB rebate of the provincial non creditable HST charged.
PSB rebates from previous periods
If a person has already claimed a PSB rebate for a claim period and subsequently discovers that the rebate was not claimed at the proper rate, the person must adjust the previously filed rebate application. 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 application of the GST/HST to public institutions, please refer to the GST/HST Info Sheet GI-068, Basic GST/HST Guidelines for Public Institutions.
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.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-670-9956. 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,
Lucas Ghosn
Charities and Non-Profit Organizations Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
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