8 February 2005 GST/HST Interpretation 37828 - Temporary Importation of Amusement Rides

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 in which you request a reconsideration of the ruling issued to XXXXX concerning the application of the Goods and Services Tax (GST) to the sales of XXXXX lots, described below.

This ruling cancels and replaces the ruling issued XXXXX.

All legislative references in this ruling are to the Excise Tax Act, unless otherwise noted.

Background

The facts, the transactions, and the purpose of the transactions relied upon in the previous ruling are as follows:

1. Prior to 1991, XXXXX entered into ground leases of land with individuals (the lessees) with respect to XXXXX lots (i.e., XXXXX lots).

2. The agreements were for a period of no less than XXXXX years and stipulate the following:

•   A XXXXX ground-lease amount.

•   The lessee will erect on the land a XXXXX of at least XXXXX square feet of enclosed floor space within XXXXX months of the date of the agreement.

•   The XXXXX will be built in accordance with the provisions of the XXXXX Act and Regulations, all zoning and building by laws and all other statutory requirements.

•   The lessee will pay for all expenses related to the construction of the XXXXX.

•   The lessee will pay all municipal assessments and all charges for utilities relating to the property (land and XXXXX included)

•   The lessee was to build the XXXXX for his or her own use and enjoyment as a seasonal place of residence and was not to use the XXXXX as a place to conduct a business.

•   The lessee had the option of removing the XXXXX from the land, if not, XXXXX would have the option of removing the XXXXX at the lessee's expense.

3. A XXXXX was built on each XXXXX lot in accordance with the terms of the lease prior to 1991. The list provided on XXXXX indicates a total of XXXXX were built.

4. The XXXXX rest on cement blocks or cement post foundations. The XXXXX are affixed to the ground by way of XXXXX. It is possible that the ground was not excavated and the cement blocks were just laid on the ground.

5. The sample pictures provided represent the way all the XXXXX are built.

6. Some XXXXX have flush toilets, running water, plumbing and septic systems; others have gray water plumbing, running water and outhouses or electrical chemical toilets. Municipal and sewage water systems are not available.

7. The XXXXX lots are not located in a residential trailer park.

8. The XXXXX lot sizes are equal to or less than one-half hectare.

9. The XXXXX are seasonal or secondary places of residence.

10. The XXXXX lots are located XXXXX.

11. From XXXXX sold the fee simple interest in XXXXX of the XXXXX lots to the lessees for prices ranging from $XXXXX to $XXXXX. XXXXX collected, and remitted approximately $XXXXX in GST.

The following additional facts were obtained from a subsequent submission made by XXXXX or from a review of the documents submitted prior to the issuance of the XXXXX ruling.

Additional Facts

12. XXXXX.

13. The XXXXX stated in a letter XXXXX that the transaction documents submitted for purposes of this ruling (i.e. the Lease Agreement and XXXXX with respect to XXXXX) are typical of the approximately XXXXX other similar transactions ^[xxxiv]1.

14. XXXXX.

15. In a letter addressed to the Canada Revenue Agency XXXXX stated XXXXX.

Amended Transactions

Taking into consideration the terms of the Lease Agreement and the additional facts set out in this ruling, it is our position that XXXXX made separate supplies of XXXXX lots (i.e., leased land) by way of sale.

Ruling Requested

You would like to know if the sales of the XXXXX lots are exempt from GST and if they are, whether the GST can be refunded to the purchasers.

Amended Ruling

We rule that the sales of the XXXXX lots are exempt from GST in accordance with section 5.2 of Part I of Schedule V.

We also rule that the GST collected in error on the above sales cannot be refunded to the individuals as the two-year deadline to grant such refunds has expired pursuant to subsection 232(1).

This ruling is 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 this ruling 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 Excise Tax Act, or to our interpretative policy; and that you have fully described all necessary facts and transactions for which you requested a ruling.

Explanation

In response to your letters XXXXX we confirm that XXXXX was not subject to self-supply under section 191(1) in respect of residential complexes that include the XXXXX lots referred to in this ruling. We concur that with respect to the above transactions, XXXXX did not give possession of a residential complex under a lease, licence or similar arrangement as described under subparagraphs 191(1)(b)(i) or (b)(ii) nor did XXXXX occupy a residential complex as described under subparagraph 191(1)(b)(iii).

Since XXXXX was not subject to self-supply under subsections 191(1) or (2) nor did XXXXX receive an exempt supply of a residential complex that was the last supply of the complex, sales of the XXXXX lots made by XXXXX to the lessees are not exempt under section 4 of Part I of Schedule V. The sales of the XXXXX lots made by XXXXX to the lessees are however exempt under section 5.2 of Part I of Schedule V.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 954-8852.

Yours truly,

Daryl J.A. Hooley
Real Property Unit
Financial Institutions and Real Property Division
Excise and GST/HST Rulings Directorate

2005/02/16 — RITS 46992 — Application of GST/HST to Supplies Shipped from Supplier Directly to Recipient's Clients