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.
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Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5XXXXX
XXXXX
XXXXXXXXXX
XXXXX
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Case Number: 59954February 7, 2006
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Subject:
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GST/HST INTERPRETATION AND APPLICATION RULING
XXXXX Camps
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Dear XXXXX:
Thank you for your letter XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the supply of various XXXXX camp programs to children and youths in Canada. We apologize for the delay in responding to your request.
All legislative references are to the Excise Tax Act (ETA) and the regulations therein, unless otherwise specified.
Statement of Facts
Based on the information in your letter, various telephone conversations XXXXX and information XXXXX, our understanding of the facts is as follows:
1. XXXXX is a XXXXX organization XXXXX.
2. The XXXXX is a registered charity within the meaning assigned under subsection 248(1) of the Income Tax Act and therefore a charity for purposes of the GST/HST under subsection 123(1) of the ETA.
3. The XXXXX is registered for purposes of the GST/HST as one legal entity with some separate filing division accounts XXXXX.
4. XXXXX.
5. The ages for the XXXXX programs are as follows:
XXXXX
XXXXX
XXXXX
XXXXX
XXXXX
6. There are some optional summer camp programs offered by XXXXX, which are separate and distinct from any of the regular membership activities. Some of these programs are open to non-members. XXXXX.
XXXXX
7. XXXXX.
8. XXXXX:
• XXXXX;
• XXXXX;
• XXXXX.
9. XXXXX.
10. The proposed fee for the XXXXX Camp is $XXXXX per participant. The fee will cover transportation to XXXXX and return, food, program, out trips, entertainment, camp memorabilia, entrance fees XXXXX, administration, operational and planning costs, internet and phone access and health care.
11. XXXXX. The daily activities at the camp will include three structured program times, one free time and two optional programs in the early morning or late night. Depending on the activity, it may take place either on or off site. Daily activity choices within the camp program include:
• waterfront XXXXX
• adventure XXXXX
• sports XXXXX
• service XXXXX
• arts XXXXX
• science and technology XXXXX
• out-trips XXXXX.
12. During the XXXXX Camp, the XXXXX and other volunteer members XXXXX will supervise XXXXX XXXXX through the day by: accompanying them to various camp activities; providing guidance, direction, instruction; and being in charge of and providing for their XXXXX safety and well being. They also supervise the XXXXX overnight during the program.
Ruling Requested
You would like to know if the supply of the XXXXX Camp program by the XXXXX to XXXXX is exempt of the GST?
Ruling Given
Based on the facts set out above, we rule that the supply of the service of the XXXXX Camp program by the XXXXX is subject to the GST at the rate of 7%.
Explanation
Generally, supplies of property and services made by a charity are exempt of GST/HST in accordance with section 1 of Part V.1 of Schedule V, unless such supplies are excluded under paragraphs 1(a) through (n). Paragraph 1(f) excludes from exemption a service involving, or a membership or other right entitling a person to, supervision or instruction in any recreational or athletic activity. The two exceptions to this exclusion (i.e. the services remain exempt) are where the services are provided primarily to children 14 years of age or under and the services do not involve overnight supervision throughout a substantial portion of the program, or, where the services are intended to be provided primarily to individuals who are underprivileged or who have a disability.
In order to attend the XXXXX Camp program, participants must be members XXXXX and they must be XXXXX of age. Participation in the camp program is optional and is charged for separately from any regular membership fees XXXXX. The XXXXX Camp program is a service which involves learning opportunities for young members of the XXXXX in areas such as leadership, life skills, recreation, healthy living, decision-making and problem solving. However, as the supply of the XXXXX Camp program does involve supervision or instruction in recreational and athletic activities and overnight supervision throughout the XXXXX, it is excluded from exemption under paragraph 1(f) of Part V.1 of Schedule V. The supply of the XXXXX Camp program does not qualify under any other exemption provided for in Schedule V and it is therefore subject to the GST.
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.
Interpretation Requested
You would like to know whether the supply of overnight camp programs by XXXXX is exempt of GST/HST under section 1 or section 5 of Part V.1 of Schedule V?
Interpretation Given
In the absence of specific transactions involving supplies of the different types of overnight camp programs provided we are unable to issue you a ruling with respect to your enquiry, as rulings can only be issued with regard to a clearly defined fact situation of a particular person. However we are pleased to provide you with the following interpretation of the relevant provisions of the ETA.
The Harmonized Sales Tax applies to taxable supplies (other than zero-rated supplies) made in the participating provinces of Nova Scotia, New Brunswick, and Newfoundland and Labrador at a rate of 15%. Whether GST at 7% or HST at 15% applies to a taxable supply made in Canada (other than zero-rated) depends on whether the supply is deemed made in a participating province.
Section 1 of Part V.1 of Schedule V is the general exempting provision for supplies of property and services made by charities with certain exceptions such as paragraph 1(f), outlined above. Other examples of exclusions from the provision (i.e. goods and services that are taxable) include: an admission to a place of amusement; new goods acquired, manufactured or produced by the charity for resale; theatre subscriptions, etc. For more information, you may refer to the guide GST/HST Information for Charities, available on our website.
Please note, as discussed, that the overriding volunteer exemption (formerly under section 3 of Part VI of the Schedule V) was repealed with the introduction of section 1 of Part V.1 of Schedule V in January 1997 and therefore is no longer applicable.
Generally, where a charity supplies a camp program involving supervision or instruction in recreational or athletic activities primarily to children 14 years of age or under, or the program is intended to be provided primarily for individuals who are underprivileged or have a disability, the supply of the service may be exempt from the GST/HST under section 1 of Part V.1 of Schedule V. However, if the supply of the camp program is intended primarily for persons over 14 years of age or it involves overnight supervision throughout a substantial part of the program, then the supply of the service will be excluded from the general exempting provision under paragraph 1(f) of Part V.1 of Schedule V. Overnight supervision would include supervision by volunteers of the charity, such as the qualified program leaders XXXXX.
Similarly, where a charity supplies a membership entitling a person to supervision or instruction in recreational or athletic activities provided primarily to children 14 years of age or under, or the membership is intended to be provided primarily for individuals who are underprivileged or have a disability, the supply of the membership may be exempt of the GST/HST under section 1 of Part V.1 of Schedule V. However, if the activities are intended primarily for persons over 14 years of age or are in respect of a program involving overnight supervision throughout a substantial part of the program, then the supply of the membership will be excluded from the general exempting provision under paragraph 1(f) of Part V.1 of Schedule V.
The XXXXX membership does entitle XXXXX of various ages to the right to participate in some recreational and athletic activities. Summer camp programs are generally optional activities and separate from the regular membership program. The membership and the various camp programs should be examined independently in respect of the general exempting provision for charities and the above noted exclusions.
Section 5 of Part V.1 of Schedule V is a specific exemption for charities in instances where they may provide certain tangible personal property or services at a price intended only to recover the purchase cost of the supplies. In respect of services, such as a camping program, this provision would only be considered in instances where a service is acquired by the charity for re-supply in the same form as it was acquired.
The foregoing comments represent our general views with respect to the subject matter of your letter. Proposed amendments to the ETA, 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.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-952-0420.
Yours truly,
Debra Murphy
Charities, NPO & Educational Services Unit
PSB & Governments Division
Excise and GST/HST Rulings Directorate
2006/02/08 — RITS 60810 — [ITC for Tax on Imported Goods]
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