Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
XXXXX
XXXXX
XXXXX
XXXXX
XXXXX
Case Number: 97929
June 13, 2008
Subject:
_GST/HST Interpretation
XXXXX
Dear XXXXX:
Thank you for your letter XXXXX, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to your supplies of day camps XXXXX and how your customers can claim a refund for tax paid in error.
At issue in this decision was the tax status of your supplies of day camp services to children 14 years of age and under XXXXX, the Canada Revenue Agency (the CRA) considers your supplies of these services to be exempt and HST is not collectible on exempt supplies.
Should the facts of your situation change you may request a ruling from the CRA that explains how the relevant provisions of the Excise Tax Act (the ETA) apply to the new or changed facts.
Please note that GST/HST registrants who sell taxable goods and services are entitled to claim input tax credits (ITCs) for the GST/HST paid on purchases consumed, used or supplied in the course of their commercial activities. However, no ITCs may be claimed for the GST/HST paid on purchases to the extent that they are acquired for the purpose of providing exempt goods and services.
Generally, where a person makes both taxable and exempt supplies, in order to calculate a person's eligibility for ITCs, the inputs used to earn revenues must be apportioned between those used to make taxable supplies and those used to make exempt supplies. For additional information on ITC eligibility, please refer to the enclosed GST/HST Memoranda Series 8.1 General Eligibility Rules.
Where ITCs have been claimed incorrectly on an expense that was used in exempt activities, adjustments are required to the applicable GST/HST returns to correct the over-claimed ITCs. All requests for adjustments to previously filed GST/HST returns should be made in writing, provide details of the requested adjustments, and be addressed to your local tax centre. Please note that interest will apply to these adjusted amounts, and where adjustments relate to a tax remittable before April 1, 2007, a 6% penalty will also apply.
GST/HST collected in error, e.g., on a supply that should have been exempt, must be included the net tax calculation of the supplier. Generally speaking, when the recipient of a supply pays an amount as GST/HST in error the recipient can request a refund or credit of the amount from the supplier. Under the ETA, a supplier may refund or credit the tax within two years after the day the amount was charged or collected and must provide the recipient with a credit note containing prescribed information. The prescribed information is described in paragraph 16 of the enclosed GST/HST Memoranda Series 12.2 Refund, Adjustment, or Credit of the GST/HST Under Section 232 of the Excise Tax Act. If you take this approach, you can deduct the amount of GST/HST credited in determining your net tax for the reporting period in which you issued the credit note, to the extent the amount has previously been included in determining your net tax for that reporting period or a preceding reporting period.
Where the a refund or credit note is not issued by the supplier, the recipient may make an application to the CRA for a rebate of tax paid in error by completing and submitting application form GST189 General Application for Rebate of Goods and Services Tax (GST)/Harmonized Sales Tax (HST). This form is available on the website noted below, or may be obtained by calling 1-800-959-2221. The time limit to apply for this rebate is within two years after the day the recipient paid the tax.
The foregoing comments represent our general views with respect to the subject matter of your request. These comments are not rulings and, in accordance with the guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, do not bind the CRA with respect to a particular situation. Future changes to the ETA, regulations, or our interpretative policy could affect this interpretation.
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) 954-4206. 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,
Carol A. Gaudet
Charities, Non-profit organizations and Educational Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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