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.
[Addressee]
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
Case Number: 129519
Business Number: [...]
March 29, 2012
Dear [Client]:
Subject:
GST/HST RULING
Point-of-Sale book rebate on the supply of instructor manuals
Thank you for your letter of September 28, 2010, concerning the application of the Harmonized Sales Tax (HST) Point-of-Sale rebate for books (the Rebate) for the provincial portion of the HST to the supplies of publications supplied by your company.
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 the facts to be as follows:
1. [...] (the Company) supplies instructor's manuals to [...] regarding [...].
2. You have supplied three complete sample publications (the Products) for our review:
a. [...] (Product A). This is a publication which provides information on maintaining a healthy lifestyle. Product A is bound [...]. It contains an introduction section, [#] chapters and one appendix totalling [#] pages. Product A includes basic fitness theory which includes chapters on the following: [...]. Each of the chapters is designed to instruct, and there are limited spaces for writing notes and answering questions.
b. [...] (Product B). This is a training publication to enable people to become [...]. Product B is [...] and is bound [...]. It contains [#] progressive modules and [#] appendices totalling [#] pages. Product B includes exercises with blank spaces for the user to complete; and
c. [...] (Product C). This is a publication about strengthening the body [...]. Product C is [...] bound. Product C contains [#] sections totalling [#] pages on the following: Introduction; [...]. Product C includes exercises with blank spaces for the user to complete.
3. In addition to the examples listed in above, the Company sent [#] partial publications used for [...]. According to the Company, these publications will be in the same physical format as the examples in number [...] [2] above, bound by [...]:
a. [...] (Product D) [...] - This publication is understood to contain [#] chapters and one appendix, and is used to assist [...]
b. [...] (Product E) [...] - This publication is understood to contain [#] sections used to train instructors [...]
c. [...] (Product F) [...] - This publication is understood to contain [#] sections and is a reference source to assist [...]
Ruling Requested
You would like to know if the supplies of Products A, B, C, D, E and F are qualifying printed books for purposes of the Rebate for the provincial portion of the HST.
Ruling Given
Based on the facts set out above, we rule that supplies of Product A, Product B, and Product C are qualifying printed books for purposes of the Rebate pursuant to section 259.1 of the ETA.
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
For GST/HST purposes, most supplies of goods and services that are made in the participating provinces are taxable supplies subject to the HST (15% in Nova Scotia, 13% in Ontario, New Brunswick, Newfoundland and Labrador, and 12% in British Columbia). In general, this includes the sale of most books and other similar publications. However, the participating provinces provide a point-of-sale (POS) rebate for the provincial portion of the HST payable on supplies of qualifying property.
Qualifying property includes printed books and updates of printed books, audio recording all or substantially all of which is a spoken reading of a printed book, and bound or unbound printed versions of scripture of any religion. The term "printed book" is not defined in the ETA. Therefore, for purposes of the rebate, the term takes on its ordinary meaning; however, certain types of publications are excluded from the definition of printed book under subsection 259.1(1) of the ETA, and are therefore excluded from the POS book rebate.
Under section 259.1 of the ETA, a printed book excludes, in part, anything that is, or the main component of which is: a book designed primarily for writing on. The Products contain exercises with blanks to be filled in by course participants which enhance the learning process. The Products are considered to be designed primarily for educational purposes and are not considered to be designed primarily for writing on for the purposes of section 259.1. Therefore, Products A, B and C are considered to be qualifying property for purposes of the Rebate.
Interpretation Given
We can only issue a ruling when all the relevant facts of a transaction or series of transactions are presented. Product D, Product E and Product F are only partial publications and therefore a ruling cannot be issued. While we cannot provide rulings on incomplete publications, we can offer some general information that will provide you with some guidance when determining the GST/HST status of the supply of the finished publications.
As noted above, qualifying property for purposes of the Rebate includes "printed books". The term "printed book" is not defined in the ETA. However, it is Canada Revenue Agency policy that a "printed book" includes publications which consist of a number of printed sheets that are bound together with continuous text and may contain printed words, pictures, diagrams or other visual aids including Braille and musical notation.
Under the legislation, certain publications are however excluded from the definition. The exclusion from the rebate for books, the main component of which is designed primarily for writing on is only one of the exclusions. For more details on the exclusions please refer to Memorandum 13.4 Rebates for Printed Books, Audio Recordings of Printed Books, and Printed Versions of Religious Versions of Scriptures which is available at the following web address: http://www.cra-arc.gc.ca/E/pub/gm/13-4/README.html.
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 613-954-5124. 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,
Angela Stachowski
Goods Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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