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: 134267
Business Number: […]
November 29, 2012
Dear [Client]:
Subject: GST/HST RULING
[…][Music Programs for Children]
This is in regards to our previous letter dated [mm/dd/yyyy], in which we provided you with a ruling in respect of the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to […][music programs] provided by […]([…][XYZ]). […]. We apologize for the delay in responding to your enquiry.
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. [XYZ] provides various children’s music programs. Each program is designed for children within a certain age range. The following descriptions of the programs are available […]:
[…][Program A], […][Program B], […][Program C]
2. [Program B] and [Program C] are offered in […][sessions]. [#] different music classes are provided as part of each program […]
3. You provided descriptions for each of the [#] classes that make up the [Program B] and [Program C] Programs. […]
4. […], holds […][various degrees in music]. […] has over [#] years of experience teaching young students and is a certified teacher with […]. The other full and part-time teaching staff members have degrees in music and/or education and are also certified teachers.
5. All the programs offered by [XYZ] are based on the […]
6. There is no fixed curriculum for the children’s music programs. The program instructors create a pre-determined lesson plan setting out the objective of the lesson. […].
7. [XYZ] is not licensed as a child care service provider under provincial legislation.
RULING REQUESTED
You would like to know whether [XYZ’s] supplies of children’s music programs are exempt from GST/HST.
RULING GIVEN
Based on the facts set out above, we rule that
1) [Program A] qualifies as “music lessons” for GST/HST purposes; therefore, [XYZ’s] supplies of the [Program A] are exempt from GST/HST under paragraph 9(b) of Part III of Schedule V.
2) [Program B] qualifies as “music lessons” for GST/HST purposes; therefore, [XYZ’s] supplies of the [Program B] are exempt from GST/HST under paragraph 9(b) of Part III of Schedule V.
3) [Program C] qualifies as “music lessons” for GST/HST purposes; therefore, [XYZ’s] supplies of the [Program C] are exempt from GST/HST under paragraph 9(b) of Part III of Schedule V.
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
Pursuant to paragraph 9(b) of Part III of Schedule V and the Equivalent Courses (GST/HST) Regulations, the supply of a service of tutoring or instructing an individual in music lessons is exempt from GST/HST. The Canada Revenue Agency (CRA) views a lesson as an activity designed to result in a progression or development of skills toward a pre-set lesson goal or objective. Music lessons involve formal instruction that develops skills in musical performance involving the use of the human voice or musical instruments, conducting an orchestra or musical composition.
Music lessons would not include instruction in music-recording skills, music history or the teaching of techniques of music education. The fact that an activity involves music does not mean it is a supply of instruction in music or a music lesson. Activities involving music entertainment or appreciation and recreational courses that include an element of music (e.g. ballroom dancing, aerobics) would not be considered music lessons.
Whether a particular activity or program is a music lesson is a question of fact. The CRA considers the following questions to 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 musical skills, or for some other purpose such as recreation?
* How is the program advertised and promoted?
We are of the opinion that the [Program A], the [Program B], and the [Program C] qualify as music lessons for GST/HST purposes. Therefore, the programs are exempt from GST/HST. Children enrolled in the programs receive instruction in fundamental concepts of music such as dynamics, tempo and pitch. The programs also develop musical skills such as in-tune singing and a sense of beat. The programs are based on established pedagogies for music education and the instructors are highly qualified music educators. Although the programs contain some non-musical elements such as ABCs, dance and play, the primary focus of each program is instruction in music and the programs are promoted as music lessons.
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 613-954-3158. 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,
Heather Reardon
Charities, Non-Profit Organizations and Educational Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
Email this Content