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: 122497
Business Number: [...]
October 6, 2011
Dear [Client]:
Subject:
GST/HST RULING
Charges [by a Municipality] for repair of privately owned bridge
Thank you for your letter of March 18, 2010, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to charges by [...] ([the Municipality]) to residents for a privately owned bridge of the residents.
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
From the incoming document and from conversations with, and information supplied by you, we understand the facts to be that:
1. [The Municipality] paid for repair services on a bridge that is privately owned by a group of local residents called the [...] Bridge.
2. The bridge was in a state of disrepair and the repairs were required within a [...]-month time period to enable higher-quality fire safety service to the residents.
3. The bridge was not replaced - only repairs were conducted.
4. The amount of the contract that [the Municipality] entered into with the contractor, [...] [the Contractor], was for $[...] plus $[...] HST.
5. The reason that [the Municipality] became involved is that the residents were not able to get funding up front in the amount required for the repairs, and the residents felt the repairs were urgently needed for the fire safety purposes. Therefore, the residents approached [the Municipality] to arrange for the repairs since it had money to afford them.
6. [The Municipality] contracted for the repairs with [the Contractor], assuming liability for payment.
7. [The Municipality] then sought reimbursement from the individual property owners in the form of a local improvement charge to the individual property owners.
8. There is no formal documentation nor stipulation indicating the payments to be reimbursement due to an agency relationship nor existence of a loan situation.
Ruling Requested
You would like to know if the supply of the repair services on the privately-owned bridge by [the Municipality] to the property owners is taxable or if it is for an exempt supply under sections 21 or 21.1 of Part VI of Schedule V.
Ruling Given
Based on the facts set out above, we rule that the supply of the repair services on the privately-owned bridge by [the Municipality] to the individual property owners is exempt from GST/HST pursuant to section 21.1 of Part VI of Schedule V.
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.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-4390. 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,
John Ware
Municipalities and Health Care Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
Email this Content