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: 135930
May 29, 2012
Dear [Client]:
Subject: GST/HST RULING
Supply of […] [ABC] Services
Thank you for your letter of May 17, 2011, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to a supply of certain […] ([…] [ABC]) services made by […] ([…][the Company]).
HST applies at the rate of 15% in Nova Scotia, 13% in Ontario, New Brunswick, and Newfoundland and Labrador, and 12% in British Columbia. GST applies at the rate of 5% in the remaining provinces and territories.
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] provides [ABC] services for the purpose of […]. [The Company] is registered for GST/HST purposes.
2. […]
3. […]
4. The […] [ABC service] […] is performed at [the Company’s] […] in [City 1, Province X].
5. Once the [ABC service] is completed, [the Company] sends a report […]
6. […]. […] [the Company] may charge and receive payment for the [ABC] services from […] [the individual] or […].
RULING REQUESTED
You would like to know whether a supply of [ABC] services made by [the Company] to [the individual] is a zero-rated supply under section 9 of Part V of Schedule VI […].
RULING GIVEN
Based on the facts set out above, we rule that the supply of [ABC] services made by [the Company] to [the individual] is a taxable supply that is not a zero-rated supply.
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
A taxable supply (other than a zero-rated supply) of property or a service made in Canada is subject to GST if it is deemed to be made in a non-participating province, and is subject to HST at the applicable rate if it is deemed to be made in a participating province. The participating provinces are Ontario, Nova Scotia, New Brunswick, British Columbia, and Newfoundland and Labrador.
Paragraph 142(1)(g) provides that a supply of services is deemed to be made in Canada if it is, or is to be, performed in whole or in part in Canada. Based on the facts, if [the Company] makes a supply of [ABC] services to [the individual] […], that supply is made in Canada for GST/HST purposes since the services are performed in part in Canada.
Under subsection 165(3), the tax rate in respect of a taxable supply made in Canada that is a zero-rated supply is 0%. A “zero-rated supply” is defined in subsection 123(1) as a supply that is included in Schedule VI to the ETA. Based on the information […], there is no provision in Part V of Schedule VI to the ETA that would apply to zero-rate the supply of [ABC] […] services in the circumstances described.
More specifically, the [ABC] services supplied by [the Company] would not meet the conditions for zero-rating under section 9 of part V of Schedule VI by virtue of the fact that the services would not be considered to be advisory, consulting or research services.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-952-8812. 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,
Jeff Frobel
Border Issues Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
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