18 August 2005 GST/HST Interpretation 62985 - Application of GST/HST to Employee gifts

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 (with attachments), concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the importation of the tractor described herein.

All legislative references are to the Excise Tax Act (ETA) and the regulations therein, unless otherwise specified.

Statement of Facts

Our understanding of the facts based on the information provided in your letter and attachments, along with information from XXXXX Web site at XXXXX is as follows:

•   In the course of its business of importing and distributing agricultural tractors and their parts in Canada, your client, XXXXX will import into Canada a XXXXX Tractor, model XXXXX that it has acquired by way of sale from XXXXX.

•   XXXXX is a Canadian company with offices across Canada and is registered for GST/HST purposes XXXXX

•   The XXXXX Tractor, model XXXXX is designed for agricultural use with a rating of XXXXX kW at power takeoff.

•   The XXXXX line of tractors are described as agricultural products on XXXXX Web site.

Ruling Requested

You request confirmation that the importation of the XXXXX Tractor, model XXXXX by XXXXX is a non-taxable importation pursuant to section 213 of the ETA and Schedule VII to the ETA.

Ruling Given

Based on the facts set out above, we rule that the importation of the XXXXX Tractor, model XXXXX by XXXXX is a non-taxable importation for GST/HST purposes pursuant to section 213 of the ETA and section 6 of Schedule VII to the ETA.

This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Goods and Services Tax Rulings. We are bound by this ruling provided that none of the above issues is 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

Generally, all goods imported into Canada are taxable for GST/HST purposes unless specifically relieved under section 213 of the ETA. Importations of goods relieved of tax under section 213 of the ETA are set out in Schedule VII to the ETA.

Section 6 of Schedule VII to the ETA provides for the non-taxable importation of prescribed property the supply of which is zero-rated pursuant to section 10 of Part IV of Schedule VI to the ETA. Property that is prescribed property for purposes of section 10 of Part IV of Schedule VI to the ETA is described in the Agriculture and Fishing Property (GST/HST) Regulations. Tractors supplied by way of sale that are designed for farm use with a rating of at least 44.74 kW at power takeoff are prescribed property for purposes of section 10 of Part IV of Schedule VI to the ETA.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (613) 952-8812.

Yours truly,

Jeff Frobel
Border Issues Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate

2005/08/17 — RITS 63045 — Municipal Designation