Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 159529
Business Number: […]
Dear [Client]:
Subject: GST/HST RULING
Application of the point-of-sale rebate to the supply of the bookazine, […][the Publication]
Thank you for your letter concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the supply of the “bookazine”, […][the Publication]. We apologize for the delay in responding. A copy of the Publication was submitted for our review.
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 and 15% in Nova Scotia. 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 the facts to be as follows:
1. […][The company’s] retail stores sell the Publication across Canada.
2. The Publication is produced by […][the publisher]. It is a collector’s edition and is a single issue.
3. The Publication retails for $[…].
4. The Publication contains photographs and articles of […]. It contains more photographs than text.
5. The Publication is printed on thick glossy paper. It has a soft cardboard front and back cover.
6. The Publication has […] pages which are glued to the side.
7. The Publication is displayed with magazines that are for sale.
8. The Publication cannot be obtained by subscription.
9. The Publication contains no advertisements.
10. Instruction for “Display until [mm/dd/yyyy]” is printed on […] the Publication.
11. The Publication does not have an International Standard Book Number (ISBN), or an International Standard Serial Number (ISSN). It has a Universal Product Code (UPC) bar code.
12. The distributor collects the unsold inventory of the Publication which is shredded in the same way as a regular magazine.
RULING REQUESTED
Is the Publication a magazine subject to HST at the rates of 13%, 14% or 15%, depending on the place of supply, or is it a printed book for purposes of the point-of-sale rebate (the rebate) in respect of the provincial component of the HST?
RULING GIVEN
Based on the facts set out above, we rule that the Publication is a printed book that qualifies for the rebate in respect of the provincial component of the HST.
EXPLANATION
The governments of Ontario, Nova Scotia, New Brunswick, and Newfoundland and Labrador and Prince Edward Island (the participating provinces) provide a point-of-sale rebate equal to the provincial part of the HST payable on all taxable supplies of printed books and other qualifying property. Under the Deduction for Provincial Rebate (GST/HST) Regulations, the following goods qualify for the rebate,
• a printed book as defined under subsection 259.1(1) or an update of a printed book;
• an audio recording 90% or more of which is a spoken reading of a printed book (e.g., an "audio book");
• a bound or unbound printed version of scripture of any religion;
• a composite property, which is property that is wrapped, packaged or otherwise prepared for sale as a single product the only components of which are only a printed book and
a) a read-only medium that contains material all or substantially all of the value of which is reasonably attributable to one or more of the following:
(i) a reproduction of the printed book, and
(ii) material that makes specific reference to the printed book and its content, and that supplements, and is integrated with, that content; or
b) if the product is specially designed for use by students enrolled in a qualifying course, a read-only medium or a right to access a website, or both of them, that contains material that is related to the subject matter of the printed book.
The rebate is provided for by the provincial legislation of the participating provinces and is administered by the Canada Revenue Agency (CRA). A supplier may credit the amount of the rebate, i.e., the amount equal to the provincial part of the HST, to the purchaser of a printed book where the supply is made in a participating province.
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. Therefore, a book containing printed words and images or even one containing only printed images is a printed book.
In the ETA, the term “printed book” is defined only by its exclusions as set out under subsection 259.1(1). For purposes of the rebate, 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), a “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).
The Publication meets the ordinary definition of a printed book. However, it must next be determined whether the Publication is a magazine or periodical as described in paragraphs (b) or (c) above.
The ETA does not define “magazine” or “periodical”. It is our view that magazines or periodicals generally have the following characteristics:
* the pages are stapled, not bound to the cover;
* they contain miscellaneous pieces (articles, stories, poems, etc.) by various contributors, usually with photographs, illustrations or other graphics;
* they are issued in successive parts and intended to be continued indefinitely;
* each issue contains the volume number, issue number and/or date of issue;
* they are sold at least in part through subscription;
* they are displayed and sold in part through newsstands and magazine racks with other publications which may or may not contain editorials, photos, advertising or contributed works;
* outdated issues are not kept on display or for sale; and
* they are assigned an ISSN, which is an internationally recognized identification number for serial publications, consisting of an eight-digit standard number that, once assigned, becomes a permanent attribute of the individual serial for as long as it is issued under a given title.
Note that any one criterion by itself is not conclusive. Although the Publication is sold with magazines, and outdated issues are not kept on display, it is our view that the Publication would not be a magazine or periodical. It is glued, and not stapled. It is not dated or numbered, nor published periodically and does not have an ISSN. It is generally published as a single publication and is not purchased by subscription.
Since none of the exclusions to the definition of “printed book”, as set out in subsection 259.1(1) apply, the Publication is a printed book that qualifies for the rebate.
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the 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 (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
Basic Groceries and Point-of-Sale Rebates Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
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