6 March 2008 GST/HST Interpretation 102760 - Inquiry about the GST/HST housing rebate for rental housing.

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 of XXXXX, and attachments concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the temporary importation of XXXXX equipment.

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

Effective January 1, 2008, the rate of the GST has been reduced from 6% to 5% and the rate of HST from 14% to 13%. The new rates apply to supplies for which the GST/HST is paid on or after January 1, 2008, without having become payable before that date. Specific transitional rules apply to certain supplies, for example, real property. For more information on the transitional rules for the reduction of the GST/HST rate, please refer to GST/HST Notice 226, GST/HST Rate Reduction in 2008 on the Canada Revenue Agency (CRA) Web site at www.cra-arc.gc.ca/E/pub/gi/notice226/README.html.

Statement of Facts

Our understanding of the facts are as follows:

•   Your client, XXXXX is not resident in Canada and is not registered for GST/HST purposes.

•   XXXXX will temporarily import XXXXX equipment consisting of XXXXX to be tested XXXXX.

•   The testing will take place in XXXXX. * The equipment has a total value of approximately $XXXXX and will be shipped into Canada XXXXX and will be returned to XXXXX.

•   For purposes of this test, XXXXX.

•   The Canada Border Services Agency has determined that the conditions of Item 17 of the Temporary Importation (Excise Levies and Additional Duties) Regulations (i.e., articles to be tested and specialized test equipment permanently attached to or installed on those articles) are met for the temporary importation of the XXXXX equipment.

Ruling Requested

You would like to know whether the temporary importation of the XXXXX equipment for testing purposes is a non-taxable importation for GST/HST purposes.

Ruling Given

Based on the facts set out above, we rule that the importation of the XXXXX equipment is non-taxable for GST/HST purposes pursuant to section 8 of Schedule VII to the ETA and section 213 of the ETA.

This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are 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 8 of Schedule VII to the ETA deems goods described in the Non-Taxable Imported Goods (GST/HST) Regulations imported under specific circumstances to be non-taxable for GST/HST purposes.

Pursuant to subparagraph 3(i)(i) of the Non-Taxable Imported Goods (GST/HST) Regulations, goods described in item 17 of the schedule to the Temporary Importation (Excise Levies and Additional Duties) Regulations that are imported in circumstances where the terms and conditions of those regulations are met, are considered non-taxable importations for GST/HST purposes.

The Canada Border Services Agency has determined that the conditions of Item 17 of the Temporary Importation (Excise Levies and Additional Duties) Regulations (i.e., articles to be tested and specialized test equipment permanently attached to or installed on those articles) are met for the temporary importation of the XXXXX equipment.

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

2008/01/31 — RITS 58133 — Transfers of Farmland