6 July 2004 GST/HST Interpretation 51874 - Acquisition of Medical Services by Indian bands and band-empowered entities

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 of XXXXX (with attachments), requesting a ruling concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the construction and operation of a XXXXX.

Statement of Facts

Our understanding of the facts, the transactions, and the purpose of the transactions is as follows:

1) XXXXX

2) XXXXX

3) XXXXX

4) The construction and operating costs of the XXXXX will be recovered through a toll charged to users of the XXXXX.

5) XXXXX

6) XXXXX

7) XXXXX.

Rulings Requested

1) That the XXXXX be determined a municipality under subsection 123(1) of the ETA XXXXX.

2) That the XXXXX tolls charged and collected by XXXXX be exempt from GST pursuant to section 2 of Part VIII of Schedule V to the ETA.

3) That any supplies between XXXXX be exempt from GST pursuant to section 28 of Part VI of Schedule V to the ETA.

Response

1) Our response to your first ruling request is not a ruling but confirmation of the determination of XXXXX as a municipality. XXXXX

Rulings Given

Based on the facts set out above, we provide the following rulings.

2) Section 2 of Part VIII of Schedule V exempts a supply of a right to use a road or bridge where a toll is charged for the right.

The term "toll" is not defined in the ETA. However, The Concise Oxford Dictionary defines "toll" as a charge payable for permission to pass a barrier to use a bridge or road, etc. Similarly, Black's Law Dictionary defines the term "toll" as a sum of money for the use of something, generally applied to the consideration which is paid for the use of a road, highway, bridge or the like, of a public nature.

XXXXX we would characterize the toll XXXXX for the right to use the XXXXX as a "toll" for the purposes of section 2 of Part VIII of Schedule V.

Therefore, XXXXX the supply of the right to use the XXXXX will be exempt from the GST pursuant to section 2 of [P]art VIII of Schedule V to the ETA. XXXXX will not be required to collect the GST on a toll charged as consideration for the supply of the right.

3) XXXXX is a determined municipality for purposes of the GST/HST. XXXXX has been determined to be a municipality for purposes of the GST/HST as a para-municipal organization of XXXXX. Supplies made between XXXXX and XXXXX on or after the effective date of XXXXX determination will fall under the exemption from the GST/HST provided in paragraph 28(a) of Part VI of Schedule V to the ETA.

These rulings are subject to the general limitations and qualifications outlined in section 1.4 of Chapter 1 of the GST/HST Memoranda Series. We are bound by these rulings provided that none of the above issues is currently under audit, objection, or appeal; that there are no relevant changes in the future to the ETA, or to our interpretative policy; and that you have fully described all necessary facts and transactions for which you requested rulings.

Should you have any questions concerning the application of the tax to the toll to be charged by XXXXX, please contact Alyson Trattner, Manager, Services and Intangibles Unit at (613) 952-8813. For questions concerning XXXXX status as a municipality please contact me at (613) 952-9590 or Tim Krawchuk, Manager, Municipalities and Health Care Services Unit at (613) 941-3268.

Yours truly,

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

2004/06/18 F — RITS 52054 — Crédit de taxe sur les intrants pour la taxe payée à l'importation