19 September 2007 GST/HST Interpretation 97506 - Foreign Convention and Tour Incentive Program

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 XXXXX concerning the meaning of "all-inclusive price" in the definition of tour package for the purposes of the Foreign Convention and Tour Incentive Program (FCTIP).

All legislative references are to the Excise Tax Act (ETA) and the regulations thereunder, unless otherwise specified. GST refers to the Goods and Services Tax and HST refers to the Harmonized Sales Tax.

We understand that after reviewing GST/HST Notice No. 221, Questions and Answers on the Cancellation of the Visitor Rebate Program and the Implementation of the New Foreign Convention and Tour Incentive Program (the Notice), you would like clarification on when itemization on an invoice is acceptable for a tour to be considered sold for an all-inclusive price and to qualify as an eligible tour package. Particularly, in your email you refer to question 3.7 of the Notice that provides the meaning of "all-inclusive price" and question 3.21 that is an example of a tour that is not sold for an all-inclusive price.

Interpretation Requested

You would like to know if Canada Revenue Agency (CRA) would consider a package as sold for an all-inclusive price where the descriptions of the properties and services included in the package are itemized on the invoice together with the individual pricing for each of the properties and services that make up the total package price.

Interpretation Given

For the purposes of the GST/HST rebate for tour packages under the FCTIP, an eligible tour package must:

•   include either short-term and/or camping accommodation in Canada and at least one service,

•   be sold for an all-inclusive price, and

•   not include a convention facility or related convention supplies.

An all-inclusive price, as set out in the answer to question 3.7 of the Notice, means a single price for all property and services sold together in a package. However, for information purposes, tour operators sometimes list the prices for certain tour components of a package separately on an invoice. The CRA accepts that such packages are sold for an all-inclusive price.

For example, tour operators in some provinces are required to list the price of the accommodation included in a tour package separately on an invoice to inform the purchaser of the amount on which the applicable provincial sales tax was calculated. The CRA accepts that these packages are sold for an all-inclusive price, even though the price of the accommodation is listed separately, because it is only listed separately for information purposes.

Alternatively, some tour operators list the prices for their tour components separately on an invoice because they are making multiple supplies or making supplies on behalf of other persons. For example, a Fully Independent Travel (F.I.T.) tour that contains hotel accommodation in Canada and a flight sold separately on the same invoice will not qualify as a tour package as these are two separate sales. Similarly, a F.I.T. tour that contains hotel accommodation in Canada and a flight sold to the traveller by separate persons or by an agent acting on behalf of separate persons will not qualify as a tour package.

In the example in question 3.21 of the Notice, each component of the tour is priced and sold separately on the same invoice. The prices are not listed for information purposes only; the properties and services are sold individually. Therefore, the tour is not an eligible tour package but rather separate supplies of the individual tour components.

As the matter of whether a tour operator has made a single supply of an eligible tour package or multiple supplies of tour components may vary on a case by case basis, we would be pleased to review and offer comments with respect to any specific packages that you may have questions about.

The foregoing comments represent our general views with respect to the subject matter of your request. These comments are not rulings and, in accordance with the guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, do not bind the CRA with respect to a particular situation. Future changes to the ETA, regulations, or our interpretative policy could affect this interpretation.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 780-442-7433.

Yours truly,

Carla Schur-Ellison
Services and Intangibles Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate

2007/09/10 — RITS 50595 — Tax Status of Courses