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: 141944
Businesss Number: [...]
April 18, 2013
Dear [Client]:
Subject: GST/HST RULING
Point-of-sale rebate on [...] books
Thank you for your letter of February 1, 2012, concerning the application of the GST/HST to supplies of three [...] books. We apologize for the delay in responding.
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Effective April 1, 2013, the 12% HST in British Columbia has been replaced by the 5% GST and a provincial sales tax.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
The three following products were submitted for review:
1. [...] (Product 1);
2. [...] (Product 2); and
3. [...] (Product 3).
Product 1
Product 1 is in the form of a hardcover book, [...] inches in size. It contains one page which is folded in the middle. [...] are printed on the page.
The back page of Product 1 has a [...]
Product 1 has an ISBN number.
The back cover of Product 1 has [...]. [...].
Product 2
Product 2 is in the form of a hardcover book, [...] inches in size. It contains one page which is folded in the middle. [...] and [...] are printed on the page.
The back cover of Product 2 has a [...] Product 2 has an ISBN number.
The back cover has [...]. [...]
Product 3
Product 3 is in the form of a hardcover book, [...] [size]. It contains [#] pages with printed words and images. The back cover of Product 3 has [...]
[...] Product 3 [...] has an ISBN number. [...]
Ruling Requested
You would like to know if Products 1, 2 and 3 qualify as printed books for the purposes of the point-of-sale rebate in respect of the provincial component of the HST.
Ruling Given
Based on the facts set out above, we rule that Product 3 qualifies as a printed book for purposes of the point-of-sale rebate in respect of the provincial component of the HST.
We also rule that Products 1 and 2 do not qualify as printed books for purposes of the point-of-sale rebate in respect of the provincial component of the HST.
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.
Explanation
For GST/HST purposes, most supplies of goods and services that are made in the participating provinces are taxable supplies subject to the HST (15% in Nova Scotia, 13% in Ontario, New Brunswick, and Newfoundland and Labrador, and 14% in Prince Edward Island). This includes the sale of most books and other similar publications. However, the participating provinces provide a point-of-sale rebate for printed books (the rebate) for the provincial component of the HST payable on taxable supplies of qualifying property.
Qualifying property includes a printed book and updates of a printed book, an audio recording all or substantially all of which is a spoken reading of a printed book, and a bound or unbound printed version of scripture of any religion.
The term "printed book" has its ordinary meaning subject to specific exclusions. Generally, a "printed book" consists of a number of printed sheets that are fastened together in some way, whether by staple, glue, or other method. It may contain printed words, printed pictures, diagrams and other visual aids including Braille and music. To be classified as a "printed book", the text should be continuous and complete from page to page, chapter to chapter, section to section, etc. Generally, the pages of a printed book are numbered.
In the ETA, the term "printed book" is defined only by its exclusions as set out under subsection 259.1(1). For the rebate purposes, a book must meet the ordinary meaning of a printed book and not be excluded by any paragraphs to the definition of "printed book" under subsection 259.1(1).
Under subsection 259.1(1), "printed book" does not include anything that is or the main component of which is:
(a) a newspaper;
(b) a magazine or periodical acquired otherwise than by way of subscription;
(c) a magazine or periodical in which the printed space devoted to advertising is more than 5% of the total printed space;
(d) a brochure or pamphlet;
(e) a sales catalogue, a price list or advertising material;
(f) a warranty booklet or an owner's manual;
(g) a book designed primarily for writing on;
(h) a colouring book or a book designed primarily for drawing on or affixing thereto, or inserting therein, items such as clippings, pictures, coins, stamps or stickers;
(i) a cut-out book or a press-out book;
(j) a program relating to an event or performance;
(k) an agenda, calendar, syllabus or timetable;
(l) a directory, an assemblage of charts or an assemblage of street or road maps, but not including
(i) a guidebook, or
(ii) an atlas that consists in whole or in part of maps other than street or road maps;
(m) a rate book;
(n) an assemblage of blueprints, patterns or stencils;
(o) prescribed property; or
(p) an assemblage or collection of, or any item similar to, items included in any of paragraphs (a) to (o).
Products 1 and 2 do not meet the ordinary definition of a printed book as they do not consist of a number of printed sheets and therefore, do not qualify for the rebate.
Product 3 does meet the ordinary definition of a printed book. Since none of the exclusions as set out in subsection 259.1 to the definition of "printed book" apply, the rebate applies to the supply of Product 3.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 905-721-5219. 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,
Elizabeth Onsiong
Goods Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
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