18 August 2004 GST/HST Interpretation 53883 - Temporary Importation of Amusement Ride

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.

Dear XXXXX:

Thank you for your letter XXXXX (and accompanying documentation), requesting that the services provided by XXXXX be designated to be a municipal transit service for purposes of claiming the rebate provided to municipalities under section 259 of the Excise Tax Act ("ETA").

As you may be aware, section 24 of Part VI of Schedule V of the ETA exempts a supply made to a member of the public of a municipal transit service, or of a public passenger transportation service that has been designated by the Minister of National Revenue to be a municipal transit service.

An organization whose public passenger transportation service has been designated to be a municipal transit service under this section may also apply for designation as a municipality under subsection 259(1) of the ETA in order to be eligible to claim the 100% municipal rebate for the Goods and Services Tax/Harmonized Sales Tax ("GST/HST") paid on purchases related to its exempt designated service.

From the information provided with your letter and from my subsequent telephone discussions with XXXXX, we understand the nature of this organization's operations to be as follows.

XXXXX.

XXXXX is a registered charity under the Income Tax Act and as such, is also a charity for purposes of the GST/HST.

XXXXX

XXXXX

XXXXX

XXXXX

XXXXX

XXXXX

XXXXX

Based on this information, it is our view that XXXXX is not making its own supply of a public passenger transportation service directly to the public. Rather, the City is the entity that is providing the public passenger transportation service XXXXX and it has entered to an agreement with XXXXX to operate this service on its behalf.

The operating service provided by XXXXX to the City is not a public passenger transportation service that qualifies for designation as a municipal transit service for purposes of the ETA. Therefore, XXXXX is not eligible for designation as a municipality under subsection 259(1) in order that it may claim the municipal rebate for the tax paid on purchases related to this service.

As noted above, XXXXX is a charity for purposes of the GST/HST. The operating service it provides to the City is not subject to the GST/HST as it falls under the exemption set out in section 1 of Part V.1 of Schedule V to the ETA for certain supplies by charities. Therefore, no tax applies to the consideration paid by the City to XXXXX for this service.

As a charity, XXXXX is entitled to claim a 50% rebate for the GST/HST it pays on purchases related to its exempt operating service to the City.

The transportation service provided by the City through XXXXX is an exempt municipal transit service under section 24 set out above. Therefore, no tax applies to the consideration paid by the individual users for the service, namely the fares collected by XXXXX on the City's behalf. The City is entitled to claim the 100% municipal rebate provided under subsection 259(3) of the ETA for the tax paid on purchases related to the supply of this exempt service.

If you have any questions or require clarification concerning XXXXX request for municipal designation, please contact me at (613) 952-9590.

If you have any other questions concerning the application of the GST/HST to this organization, please contact the XXXXX GST/HST Rulings Centre XXXXX, or by calling toll-free at 1-800-959-8287.

Yours truly,

Elaine Bonnah
Municipalities and Health Care Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate

2004/08/25 — RITS 53938 — Definition of "Consideration" for GST/HST Purposes