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, 14th floor
320 Queen Street
Ottawa ON K1A 0L5
XXXXX
XXXXX
XXXXX
XXXXX
Case Number: 99409
Attention: XXXXX
XXXXX
March 4, 2009
Subject:
GST/HST RULING
Testing Services Supplied XXXXX
Dear Madam:
Thank you for your letter of XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) on the testing of materials by the XXXXX. We apologize for the delay in providing our reply.
All legislative references are to the Excise Tax Act ("ETA") and the regulations thereunder, unless otherwise specified.
Statement of Facts
1. XXXXX is a "Hospital Authority" as defined in subsection 123(1).XXXXX.
2. XXXXX is also a registered charity for income tax purposes.
3. XXXXX.
4. XXXXX charges a fair market value fee for the lab work and report.
Ruling Requested
You would like to know whether the testing services that are supplied by the XXXXX are exempt from HST.
Ruling Given
The supply of testing services provided by XXXXX is exempt from the GST/HST pursuant to section 2 of Part VI of Schedule V unless it is a supply that is zero-rated under Part V of Schedule VI.
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
Generally all supplies of goods and services made in Canada are subject to the GST/HST at the rate of 5% or 13% unless specifically relieved under the ETA. Pursuant to section 2 of Part VI of Schedule V a supply made by a public institution of any personal property or service is exempt from GST/HST. Paragraphs (a) to (o) in that section contain exclusions to the general exemption.
Subsection 123(1) defines "public institution" as a registered charity (within the meaning assigned by subsection 248(1) of the Income Tax Act) that is a school authority, a public college, a university, a hospital authority or a local authority determined under paragraph (b) of the definition of "municipality" to be a municipality. The subsection also defines "hospital authority" as an organization that operates a public hospital and that is designated by the Minister as a hospital authority for the purposes of this Part.
XXXXX was designated as a hospital authority for purposes of subsection 123(1) XXXXX. XXXXX is also currently registered as a charitable organization for purposes of the Income Tax Act. Therefore, XXXXX meets all of the criteria listed in the definition of public institution. As the supply of the testing services described above generally does not fall into the exclusions to the general exemption, these services supplied by XXXXX are exempt from GST/HST. However, paragraph 2(a) of Part VI of Schedule V excludes any property or service that is zero-rated in Schedule VI from the exemption. Testing services provided in circumstances described in Part V of Schedule VI would be zero-rated rather than exempt. This means that pursuant to subsection 165(3) the supply of such services would be taxable at a rate of 0%.
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,
Art Blommesteijn
Municipalities and Health Care Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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