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.
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TO:
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XXXXX
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FROM:
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Anne Kratz
General Operations
Excise and GST/HST Rulings Directorate
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Date:
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July 27, 2004
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Subject:
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Section 201 of the Excise Tax Act
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This is in response to your e-mail regarding the maximum ITC that may be claimed by a corporation for the GST paid or payable on the acquisition of a passenger vehicle for use exclusively in the commercial activities of the corporation.
Your interpretation of section 201 of the Excise Tax Act (ETA) is that the maximum ITC that may be claimed in respect of a passenger vehicle acquired in a non-participating province where the rate of provincial sales tax if XXXXX% is equal to 7% of $XXXXX or $XXXXX and not 7% of $30,000 or $2,100.
Interpretation Requested
You ask the Canada Revenue Agency (CRA) to confirm your interpretation that the maximum ITC that may be claimed in respect of a passenger vehicle in a non-participating province where the rate of provincial sales tax is XXXXX% is equal to $XXXXX.
Interpretation Given
The CRA confirms your interpretation of the legislation as it is written. I wish to point out that in Press Release 89-083 issued by the Department of Finance on August 14, 1989, prior to amendments to the ETA relating to GST receiving Royal Assent, the Department of Finance proposed that the threshold amount of a passenger vehicle for capital cost purposes would be applied to purchase costs exclusive of all federal and provincial taxes. We have brought this issue to the attention of the Department of Finance which is currently reviewing this issue and expects to make an announcement in the very near future.
We note that a response was provided to you XXXXX regarding the method to be used in calculating GST on automobile operating expense benefits. In addition, with respect to the issue as to whether the deeming provision for commercial activity in section 173 of the ETA has an impact on the definition of passenger vehicle for purposes of the ETA, this issue was answered XXXXX.
Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 954-7931.
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Owen Newell
Anne Kratz |
2004/08/13 — RITS 49032 — Supplies Made Under a Life Lease Agreement
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