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
Case Number: 110050
Business Number: XXXXX
February 25, 2009
Subject:
GST/HST INTERPRETATION
Dear XXXXX:
Thank you for your letter of XXXXX concerning the calculation of non-creditable tax charged for purposes of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST).
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
We understand the following:
1. An organization is eligible to file a public service body (PSB) rebate under subsection 259(3) XXXXX.
2. Pursuant to subsection 259(3) XXXXX, the organization is entitled to a rebate of 50% of its non-creditable tax charged.
3. The organization receives a substantial portion of its funding from the federal government.
4. Some of the federal government funding programs specify that upon submission of invoices, the organization receives a grant equal to the actual expenses incurred plus 50% of the GST paid in respect of those expenses.
Interpretation Requested
You would like to know how the organization should calculate its non-creditable tax charged when determining its PSB rebate when it receives a grant equal to the actual expenses incurred plus 50% of the GST paid in respect of those expenses. Specifically, would the amount representing the GST be considered an amount "for which it can reasonably be regarded the person has obtained or is entitled to obtain a rebate, refund or remission under any other section of this Act or under any other Act of Parliament" as described in subparagraph 259(1)(b)(ii) of the definition of "non-creditable tax charged"?
Interpretation Given
It is the CRA's position that an amount representing a percentage of GST/HST paid that is included in a grant pursuant to a funding agreement is not considered to be an amount in subparagraph 259(1)(b)(ii) that is "... a rebate, refund or remission under any other section of this Act or under any other Act of Parliament."
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 Canada Revenue Agency with respect to a particular situation. Future changes to the ETA, regulations, or our interpretative policy could affect this interpretation.
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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