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: 112425[r]
February 2, 2011
Dear [Client]:
Subject:
GST/HST INTERPRETATION
Allocations for purposes of claiming input tax credits
Thank you for your letter of November 12, 2010, in response to our letter of October 6, 2010, case number 112425, which concerned the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to issues surrounding allocations of capital real property and input tax credits.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
As stated in our letter of October 6, 2010, it is a question of fact whether the methods used by a person to determine the extent to which properties or services are for consumption or use, or are acquired, for the purpose of making taxable supplies for consideration or for other purposes are fair and reasonable. Further, an appropriate allocation in one set of circumstances may not be an appropriate allocation in other circumstances.
With respect to common area space outside of buildings and structures, we reiterate that if the particular space is not for use for the purpose of making taxable supplies for consideration, we would usually consider the space to be used for purposes other than making taxable supplies for consideration.
In a particular set of circumstances, it is possible that common area space could be attributed to making taxable supplies for consideration. For example, if a sidewalk leads to a parking lot from which a university makes only taxable supplies for consideration and it is unlikely that the sidewalk would be used for any other reason than accessing the parking lot, the sidewalk may be attributed to the making of taxable supplies for consideration. Other particular circumstances would have to be considered on a case by case basis. Nonetheless, green space that forms part of a university's property, that is not specifically used to make taxable supplies, and that is generally accessible to any person entering the university is not considered to be used by the university for the purpose of making taxable supplies for consideration.
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 613-954-8852. 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,
Hugh Dorward
Real Property Unit
Financial Institutions and Real Property Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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