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, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 130409
January 27, 2014
Dear [Client]:
Subject: GST/HST RULING
Services of instruction in the […][graduated driver licensing (GDL) program] course
Thank you for your [correspondence] of November 17, 2010, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the […][Province A] […][GDL program] instruction services provided by […] [the instructor]. We apologize for the delay in providing our response.
The HST applies in the participating provinces at the following rates: 13% in Ontario, New Brunswick and Newfoundland and Labrador, 14% in Prince Edward Island (effective April 1, 2013) and 15% in Nova Scotia. The GST applies in the rest of Canada at the rate of 5%.
Effective April 1, 2013, the 12% HST in British Columbia has been replaced by the 5% GST and a provincial sales tax.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
STATEMENT OF FACTS
We understand the following facts describe your situation.
1. […] (the “Instructor”) provides driving instruction services to the general public.
2. In [Province A], the […][Corporation] developed the […] ([…] [GDL program]) provided by [the instructor] […].
3. The [GDL program] has been authorized by the [Province A] […][Ministry] to be worth […] credits towards the completion of a student’s […] (i.e., “high school diploma”).
4. […] [Information about finding a driving school].
5. The Instructor does not make its supplies to a school authority.
6. In the [GDL program] classes which the Instructor provides, there may be both individuals enrolled at [Province A] secondary schools, and individuals who are not enrolled at such schools.
7. All successful candidates earn […][the Certificate], but only a candidate who is enrolled at a [Province A] secondary school also earns […] credits towards the [Province A] [high school diploma] […].
8. If a particular candidate is enrolled at a [Province A] secondary school, the Instructor does not charge the GST/HST on the supply of instruction in the [GDL program] course to that candidate.
RULINGS REQUESTED
We understand that you would like us to provide rulings on the following 2 questions:
1. Is the Instructor’s supply of instruction in the [GDL program] course exempt from the GST/HST when the individual receiving the supply is enrolled at a secondary school in [Province A]?
2. Is the Instructor’s supply of instruction in the [GDL program] course exempt from the GST/HST when the individual receiving the supply is not enrolled at a secondary school in [Province A]?
RULINGS GIVEN
Based on the facts set out above, we rule that:
1. The Instructor’s supply of instruction in the [GDL program] course is an exempt supply when the individual receiving the supply is enrolled at a school authority in [Province A] (e.g. a public secondary school), and the Instructor is provided evidence of that enrollment.
Paragraph 9(a) of Part III of Schedule V exempts a supply of a service of tutoring or instructing an individual in a course that is approved for credit by a school authority. As the Instructor’s supply of instruction in the [GDL program] course is approved for […] credits towards the completion of a student’s […][high school diploma], the supply of instruction in the [GDL program] course is an exempt supply when the conditions in the CRA’s GST/HST Policy Statement P-233, Tutoring or Instructing in Courses Approved for Credit by a School Authority are met. When making an exempt supply as described above, the Instructor must maintain documentary evidence in its books and records that the individual was enrolled at a school authority in [Province A] at the time the supply was made.
2. The Instructor’s supply of instruction in the [GDL program] course is subject to […] [GST/HST] when the individual is not enrolled at a school authority in [Province A]. […].
The GST/HST Policy Statement P-233, GST/HST Info Sheet GI-056, and GST/HST Notice 270 can be viewed on the CRA’s website at www.cra-arc.gc.ca.
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.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-957-1175. 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,
Dwight Kostjuk
Aboriginal Affairs and Educational Sectors Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
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