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: 142921
July 6, 2012
Dear [Client]:
Subject: GST/HST RULING
Section 150 election […]
Thank you for your letter of May 15, 2012, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to an election under section 150 of the Excise Tax Act (ETA) and […] (the Taxpayer).
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:
1. In [yyyy] (the “Effective Date”), the Taxpayer duly filed an election made pursuant to section 150 of the ETA (the “Election”) with two closely related persons (the “Recipients”), both of which are financial institutions pursuant to paragraph 149(1)(a) of the ETA.
2. Absent the Election, the supplies made by the Taxpayer to the Recipients would have been “taxable supplies” of services made in the course of its “commercial activity” pursuant to the definition of those terms in subsection 123(1) of the ETA.
3. Absent the Election, the Taxpayer would not have been a “small supplier” at any relevant time for purposes of the ETA.
4. The Election was otherwise valid in all respects (e.g., the parties were closely related pursuant to section 128 of the ETA, the parties were all registrants and resident in Canada).
5. From [yyyy] until [mm/yyyy], the Taxpayer filed on the basis that the Election was in place, treating all of its supplies as exempt supplies and claiming no input tax credits (i.e., filing nil returns).
6. In [mm] of [yyyy], the GST/HST registration of the Taxpayer was inadvertently cancelled.
7. As a result, the Taxpayer stopped filing GST/HST returns, but continued to operate on the basis that the Election was in place and that it was making exempt supplies to the Recipients.
RULING REQUESTED
You would like confirmation that the cancellation of the Taxpayer’s GST/HST registration in [yyyy] did not result in the cancellation of the Election.
RULING GIVEN
Based on the information set out above, we rule that the cancellation of the Taxpayer’s registration did not cancel the Election under section 150 since the Taxpayer would have been required to be registered, i.e., was a registrant, throughout the period in question.
We would like to note that in being a registrant, the Taxpayer must fulfill its obligations under the ETA, which includes among others, the requirement under subsection 240(1) to be registered.
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 613-954-4394. 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,
Doris McMullan
Insurance and ITC Allocations Unit
Financial Institutions & Real Property Division
Excise and GST/HST Rulings Directorate
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