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: 131274
July 6, 2011
Dear [Client]:
Subject:
GST/HST RULING
Supply of books by way of rental and the point-of-sale rebate for printed books
Thank you for your letter of [mm/dd/yyyy], concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) and the Rebate to the supply of printed textbooks by way of rental.
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.
Statement of Facts
We understand the facts to be as follows:
1. [...] (the University) is a post-secondary educational institution that is a registered charity under the Income Tax Act. Accordingly, the University is a public institution under the Excise Tax Act (ETA) and is registered for GST/HST purposes.
2. The University supplies textbooks to students through its bookstore located on campus, for classes offered by the University.
3. The University introduced the [...] under which it supplies printed textbooks to students by way of rental for a specified time. Students from other post-secondary institutions may not rent textbooks from the University.
4. There are [...] rental timeframes: [...] days. Students are able to extend rentals by [...] days.
5. The rental fee is [...].
6. There is an option, but not an obligation, to buy the rented printed textbook during or after the rental. The University subtracts the rental fee paid from the listed price of the new printed textbook and charges the difference to the student.
7. The University states that the printed textbooks available through the rental program qualify as printed books for purposes of the rebate for books.
Ruling Requested
You would like to know if the printed textbooks supplied by way rental qualify for the rebate.
Ruling Given
Based on the facts set out above, we rule that the printed textbooks supplied by way of rental qualify for the rebate.
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, the regulations thereto or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.
Explanation
For GST/HST purposes, under subsection 165(2) supplies of goods and services that are made in the participating provinces that 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 rebate of the provincial part of the HST payable on supplies of qualifying printed books.
Subsection 5(1) of Part 3 of the British Columbia Consumption Tax Rebate and Transition Act provides the legislative basis for the point of sale rebate for books in that province. This provision states that the point of sale rebate is available in respect of a taxable supply (emphasis added) made in British Columbia of "qualifying property". The definition of "qualifying property" under that Act includes "prescribed books". When something is prescribed it is done so by way of regulation. Section 15 of the British Columbia Consumption Tax Rebate and Transition Act Regulations states that, for purposes of the point of sale rebate, "printed book" has the same meaning as that in section 259.1 of the Excise Tax Act. (To determine the types of books that qualify for the rebate you may consult the enclosed copy of GST/HST Info Sheet GI-65 Harmonized Sales Tax in Ontario and British Columbia - Point-of-Sale Rebate on Books.) The term "supply" is defined, in part, in section 123(1) of the ETA as including "the provision of property or a service in any manner, including... rental". Therefore, the taxable supply of a book in British Columbia by way of rental is eligible for the point of sale rebate for the provincial part of the HST.
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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