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: 141153
June 19, 2013
Dear [Client]:
Subject: GST/HST INTERPRETATION
Whether a music workshop is an exempt supply
Thank you for your letter of December 20, 2011, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to educational workshops provided by professional musicians within the elementary or secondary school system. We apologize for the delay in responding to your enquiry.
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% 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Effective April 1, 2013, the 12% HST in British Columbia has been replaced by the 5% GST and a provincial sales tax.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.
Interpretation Requested
You would like to know whether a professional musician is required to charge HST when the musician gives an educational workshop such as a guitar or song writing workshop and is paid by the school for that service or whether the supply is exempt as an educational service.
Interpretation Given
The Canada Revenue Agency (CRA) issues a GST/HST ruling on specific provisions of the legislation as they relate to a clearly defined fact situation of a particular person. A ruling cannot be issued unless all relevant facts (including identity of client, detailed descriptions of services provided, agreements, invoices, etc.) concerning the issues in question are presented. Since there were few details presented, we offer the following comments regarding the interpretation and application of the legislation to your enquiry.
Courses approved for credit by a school authority
Under section 9 of Part III of Schedule V, a supply of a service of tutoring or instructing an individual in a course that is approved for credit by a school authority is an exempt supply. The term "school authority" is defined as an organization that operates an elementary or secondary school in which it provides instruction that meets the standards of educational instruction established by the government of the province in which the school is operated (e.g. Ontario Ministry of Education's Curriculum).
Generally, a music workshop that involves instruction that follows the curriculum of a school authority would be a GST/HST exempt supply under paragraph 9(a) of Part III of Schedule V.
For example, this would be the case where the musician tailors the workshop to reflect a particular theme or component of the curriculum the elementary or secondary students are currently learning in class.
Music lessons
Paragraph 9(b) of Part III of Schedule V treats a supply of a service of instructing an individual in a course that is the prescribed equivalent of a course described in paragraph 9(a) as an exempt supply. The equivalent Courses (GST/HST) Regulations provide that for the purpose of section 9 of Part III of Schedule V, music lessons are prescribed equivalents of music courses that follow a curriculum designated by a school authority.
Whether a particular activity or program is a music lesson is a question of fact. The CRA has developed the following questions to help determine whether an activity or program is a music lesson. These questions are not necessarily all-inclusive or of equal significance in each particular case.
• Does the supplier provide instruction in identifiable musical skills or concepts?
• Is the program delivered in a structured and sequential manner with defined goals or objectives?
• Does the instructor provide students with feedback regarding their progress?
• Does the instructor possess any qualifications in music (e.g. a degree in music or other musical training)?
• Does the instructor use a recognized method of teaching music?
• Does the program involve non-musical elements? If so, what proportion of the program schedule is devoted to instruction in music? Can the other elements be connected to musical concepts or methods of teaching music?
• What is the main purpose of the program? That is, is the program provided to teach music skills, or for some other purpose such as recreation?
• How is the program advertised and promoted?
In the event that it is determined that what the musician is providing is more in the nature of a performance strictly for the entertainment of an audience and the instruction does not relate to a school authority's curriculum or would not qualify as music lessons, the supply will be subject to GST/HST.
The foregoing comments represent our general views with respect to the subject matter of your request. These comments are not rulings and, in accordance with the guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, do not bind the Canada Revenue Agency with respect to a particular situation. Future changes to the ETA, regulations, or our interpretative policy could affect this interpretation.
For your convenience, find enclosed a copy of GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-952-9264. 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,
Cindy Christmas
Aboriginal Affairs and Educational Sectors Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
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