11 April 2006 GST/HST Ruling 49291 - Importation of donated works of art XXXXX

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 treatment of goods sent to Canadian Forces Post Office Boxes (5000 series). We apologize for the delay in replying.

The following is our understanding of the relevant information:

•   Your client, XXXXX a resident, is registered for GST/HST purposes.

•   XXXXX supplies goods and sends them to Canadian Forces Post Office Boxes (for which a particular 5000 series number is assigned to each Canadian Forces deployment outside Canada) via the Canadian Forces Post Office XXXXX. The goods shipped to such post office boxes are exported from Canada for delivery to the address of the corresponding Canadian Forces Post Office outside Canada.

Interpretation Requested

The supply of goods XXXXX, shipped to Canadian Forces Post Office Boxes (5000 series), is zero-rated (taxed at 0%) pursuant to section 12 of Part V of Schedule VI to the Excise Tax Act ("the Act").

Interpretation Given

A taxable (other than zero-rated) supply made in Canada is subject to GST at a rate of 7%, or HST at a rate of 15%, if it is made in the participating provinces of Nova Scotia, New Brunswick and Newfoundland and Labrador.

Pursuant to paragraph 142(1)(a) of the Act, a supply by way of sale of tangible personal property ("TPP") is deemed to be made in Canada if the TPP is, or is to be, delivered or made available in Canada to the recipient of the supply. A supply by way of sale of TPP is deemed to be made outside Canada, under paragraph 142(2)(a) of the Act if the TPP is, or is to be, delivered or made available outside Canada.

If TPP that is supplied by way of sale is deemed to be made in Canada, it may be zero-rated as an export under section 12 of Part V of Schedule VI to the Act if the supplier:

•   ships the TPP to a destination outside Canada that is specified in the contract for carriage of the TPP;

•   transfers possession of the TPP to a common carrier or consignee that has been retained by the supplier on behalf of the recipient or by the recipient's employer to ship the TPP to a destination outside Canada; or

•   sends the TPP by mail or courier to an address outside Canada.

Based on the information provided, the goods supplied XXXXX that it sends to the Canadian Forces Post Office Boxes (5000 series) are considered to have been sent to an address outside Canada for purposes of section 12 of Part V of Schedule VI to the Act. As a result, the supply of the goods would be zero-rated (taxed at 0%) pursuant to section 12 of Part V of Schedule VI to the Act.

The foregoing comments represent our general views with respect to the subject matter of your letter. Proposed amendments to the Excise Tax Act, if enacted, could have an effect on the interpretation provided herein. These comments are not rulings and, in accordance with the guidelines set out in section 1.4 of Chapter 1 of the GST/HST Memoranda Series, do not bind the Canada Revenue Agency with respect to a particular situation.

For your convenience, find enclosed a copy of section 1.4 of Chapter 1 of the GST/HST Memoranda Series.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-6743.

Yours truly,

Cheryl R. Leyton
Border Issues Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate

2006/03/13 — RITS 50387-1 — Revision to Interpretation [Re Applicability of the GST/HST on the Lease of a Parking Authority]