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: 132588
Business Number: [...]
August 29, 2011
Dear [Client]:
Subject:
GST/HST RULING
Point of Sale rebate on the supply of publications for children that relate to fire safety
Thank you for your letter of February 10, 2011, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to publications for children related to fire safety.
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 fire safety publications to fire departments, who then distribute the material to children in their respective areas.
2. The publications provided are activity and colouring books that contain information for children to identify dangers in the home and what to do in the event of a fire.
3. The publications provided are:
a. [...] (Product A) is [...] pages, with the contents being [...]
b. [...] (Product B) is [...] pages, all pages are designed to be coloured upon [...].
c. [...] (Product C) is [...] pages, of which [...] pages are to be coloured upon. The [...] remaining pages are designed to be drawn upon [...].
d. [...] (Product D) is [...] pages all of which are designed to be coloured [...]
e. [...] (Product E) is [...] pages all of which are designed to be coloured upon [...]
Ruling Requested
You would like to know if the publications, Products A through E, are printed books for purposes of the Point-of-Sale rebate for books.
Ruling Given
Based on the facts set out above, we rule that the supply of Product A is a printed book for purposes of the Point-of-Sale rebate on books, but the supply of Products B, D, and E are colouring books, and Product C is a book designed for drawing upon. Therefore Products B, C, D, and E are excluded from the definition of a printed book and not eligible for the Point-of-Sale rebate on books.
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), and 5% GST in the remaining provinces. This includes the sale of most books and other similar publications. However, the participating provinces provide a Point-of-Sale (POS) rebate of the provincial part 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 colouring book or a book designed primarily to be drawn on. Primarily is not defined in the ETA, therefore the ordinary meaning of greater than 50% is used.
Product A is a printed book for purposes of the POS book rebate. Products B, D, and E are all colouring books, and Product C is designed primarily for drawing on. Therefore Products B, C, D, and E are excluded from the POS book rebate.
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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