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
Case Number: 99354
Business Number: XXXXX
Attention: XXXXX
XXXXX
January 30, 2009
Subject:
GST/HST RULING
Eligibility for the public service body rebate
Dear XXXXX:
Thank you for your letter of XXXXX, concerning the XXXXX eligibility for a rebate of Goods and Services Tax (GST)/Harmonized Sales Tax (HST).
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
Statement of Facts
We understand the following:
1. XXXXX.
XXXXX
XXXXX
XXXXX
XXXXX
Rulings Requested
You would like to know if the XXXXX is entitled to claim XXXXX% of the non-creditable tax charged relating to GST paid on expenses relating to the XXXXX project.
You would also like to know if the information requirements imposed under subsection 286(1) of the ETA are applicable if the XXXXX is entitled to claim XXXXX% of the non-creditable tax charged relating to GST paid on expenses relating to the XXXXX project.
Rulings Given
Based on the facts set out above, we rule that the XXXXX is entitled to claim a PSB rebate in respect of the non-creditable tax charged relating to GST paid on goods and services that relate to the property it holds in the XXXXX Trust (that is, on its XXXXX% beneficial interest in the trust property).
We also rule that the information requirements imposed under subsection 286(1) of the ETA are applicable to the XXXXX for all rebate applications.
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
Under subsection 259(3) a university may apply for a PSB rebate of 67% of "non-creditable tax charged" in respect of property or services. "Non-creditable tax charged" is generally tax paid on property or services that is not recoverable by way of an input tax credit (ITC).
Although the Administrator applied for and received various sources of funding, the XXXXX established that the Administrator received those funds on behalf of the Participants, one of which is the XXXXX. The XXXXX XXXXX also authorized the Administrator to contract in its name on behalf of the Participants in carrying out the XXXXX project.
The XXXXX Trust acknowledges that the Administrator received funding from various sources on behalf of the Participants, and held all assets purchased with this funding in trust for the benefit of those Participants.
The XXXXX and the XXXXX Trust established that the Administrator was an agent acting on behalf of the Participants to manage the funding and the XXXXX XXXXX. There are no provisions in the ETA that permit an agent (in this case the Administrator) to request a PSB rebate on behalf of a principal (in this case the XXXXX).
In addition, the property XXXXX was acquired in a bare trust. Based on the information found in GST/HST Technical Information Bulletin B-101 Trusts, GST/HST Technical Information Bulletin B-068 Bare Trusts, and GST/HST Policy Statement P-015 Treatment of Bare Trusts under the Excise Tax Act, a beneficiary, and not the bare trustee, is regarded as being the person who acquires property for GST/HST purposes. In the case of eligibility for PSB rebates on property held in a bare trust, it is the CRA's position that each beneficial owner should claim a rebate in respect of the GST paid on its share in the trust property.
As the XXXXX holds a XXXXX% beneficial interest in the XXXXX Trust, and this trust is a bare trust, the XXXXX owns XXXXX% of the property held by the XXXXX Trust. The funds in the XXXXX Trust were used to pay for the XXXXX. Therefore, the XXXXX may claim the PSB rebate in respect of the GST paid on the goods and services relating to the property it owns in the XXXXX Trust (that is, its XXXXX% beneficial interest in the trust property) for the XXXXX.
Subsection 286(1) of the ETA provides that very person who makes an application for a rebate shall keep records in such form and containing such information as will enable the determination of the amount of any rebate or refund to which the person is entitled. This would include any rebates relating to the GST paid for the XXXXX.
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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