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
January 22, 2010
Case Number: 108218
Business Number: XXXXX
Dear XXXXX:
Subject:
GST/HST INTERPRETATION
Service of Arranging for Overseas Medical Treatment
Thank you for your letter of XXXXX, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the service of arranging for overseas medical treatment. Your request has been transferred from the XXXXX GST/HST Rulings Centre to us for reply. We apologize for the delay in responding to you.
Statement of Facts
We understand that:
• XXXXX (the Company), a GST/HST registrant located in XXXXX, arranged for you to travel to XXXXX to receive XXXXX.
• The Company provided you with an estimate of the costs for the XXXXX and of the costs for yourself and your XXXXX to travel to XXXXX. All amounts mentioned in the estimate are in Canadian dollars. The breakdown of the estimate, XXXXX, is as follows:
XXXXX visa x XXXXX
$XXXXX
Travel insurance x XXXXX
XXXXX
Transit hotel x XXXXX
XXXXX
Airfare x XXXXX
XXXXX
XXXXX hotel (XXXXX night)
XXXXX
Hospital charges
XXXXX
XXXXX resort (XXXXX days)
XXXXX
Sub total
$XXXXX
Service charge @ XXXXX%
XXXXX
GST on service charges ($XXXXX @ XXXXX%)
XXXXX
Total
$XXXXX
• Also, on the estimate, the Company indicated that copies of the actual invoices would be provided on completion of the XXXXX, and that the prices were approximate.
• You paid an advance of $XXXXX to the Company.
• On XXXXX, you and your XXXXX traveled to XXXXX where you had XXXXX.
• On XXXXX, the Company provided you with a final invoice for the actual costs as follows:
XXXXX visa x XXXXX
$XXXXX
Travel insurance x XXXXX
XXXXX
Transit hotel x XXXXX
XXXXX
Airfare x XXXXX
XXXXX
XXXXX - XXXXX hotel
XXXXX
XXXXX Hospital charges XXXXX
XXXXX
XXXXX resort XXXXX
XXXXX
Postage and courier XXXXX
XXXXX
Sub total
$XXXXX
Service charge @ XXXXX%
XXXXX
$XXXXX
GST @ XXXXX% XXXXX
XXXXX
Total (Paid in full)
$XXXXX
Advance Paid
$XXXXX
Balance
$XXXXX
Refunded (previously)
XXXXX
Balance due (cheque to follow)
$XXXXX
• You noted that on the estimate, the GST was applied to the Company's service charge only, whereas on the final invoice, the GST was applied to the total amount invoiced.
• The Company gave you copies of the actual invoices for the costs you incurred. You forwarded these copies to us, except for a portion of the XXXXX invoice that was missing. The XXXXX is a travel agent whose invoice includes airfare, transit hotel accommodation and travel insurance. However, you provided us with copies of the invoices in respect of the insurance policies that the insurer, XXXXX, sold to you through the XXXXX.
• Certain suppliers in XXXXX have made invoices in your name, whereas suppliers in Canada XXXXX have made invoices in the Company's name.
• XXXXX.
Ruling Requested
You would like to know whether or not the GST applies on the total amount invoiced by the Company or on the service charge only. You also asked if you can recover any or all of the GST that you paid to the Company.
Your request for a ruling is a determination of fact, and the circumstances are such that all of the pertinent facts cannot be established. In accordance with paragraph 27 of GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, copy enclosed, a ruling cannot be issued. However, we are pleased to provide you with the following interpretation.
Interpretation Given
Generally, most supplies of property and services made in Canada are taxable and are subject to GST at the rate of 5%, unless the supply is zero-rated. Zero-rated supplies are supplies included in Schedule VI of the Excise Tax Act (ETA) and are taxable at the rate of 0%.
Certain supplies of property and services made in Canada may be exempt from GST. Exempt supplies are supplies included in Schedule V to the ETA.
Supplies of property and services that are made outside Canada are not subject to GST.
In our view, based on the available information, you have received multiple supplies of property and services either from or through the Company. As a result, whether GST is payable on these multiple supplies depends on the GST tax status of each supply. In this regard:
• supplies of the Company's services, which includes the postage and courier services, are taxable at the rate of 5%;
• supplies of the return air transportation from Canada to XXXXX are taxable at the rate of 0% (i.e., zero-rated supplies);
• supplies of the visas required to enter XXXXX and the travel insurance are GST exempt; and
• supplies of the following property and services are made outside Canada, and therefore, are not subject to GST:
- the XXXXX/hospital charges XXXXX;
- the in-transit hotel accommodation in XXXXX;
- the XXXXX hotel accommodation in XXXXX; and
- the XXXXX resort accommodation in XXXXX.
To summarize, you should not have been charged GST on the supplies that were zero-rated, exempt or made outside Canada. You should have only been charged $XXXXX GST in respect of the Company's service charge and the postage and courier services XXXXX.
Generally, when a supplier such as the Company has charged and collected an excess amount as or on account of tax from a consumer, the consumer has two options to obtain a refund. The consumer may return to the supplier to ask for a refund of the excess amount of tax charged and collected, or file a general application for rebate for tax paid in error with the Canada Revenue Agency (CRA).
Our records indicate that you have recently filed a general application for rebate (i.e., form GST 189) with the CRA for $XXXXX in respect of the GST paid to the Company. A Notice of Assessment dated XXXXX, was mailed to you advising that your request for a rebate was disallowed because XXXXX.
If you disagree with the Notice of Assessment, you have 90 days from the date of the notice of assessment to file a notice of objection. See your notice of assessment for details on how to file an objection.
Should you choose to file a notice of objection, you must also submit the XXXXX with the objection. XXXXX. Also, please include a copy of this letter with your objection.
Please note that a person is not entitled to both a refund from a supplier, and a rebate from CRA, in respect of the same transaction.
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, 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.
If you require clarification with respect to any of the issues discussed in this letter, please call Michèle Routhier at 613-954-9700. 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,
J. Sitka
Director
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
Enc. GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service
UNCLASSIFIED