21 June 1994 GST/HST Interpretation 1994-06-21 - Van Purchased in Canada and Subsequently Exported to

Attached is a copy of a letter dated December 13, 1993 XXXXX, written by XXXXX, to the above-referenced firm. The letter concerns the application of the Goods and Services Tax (GST) to a van purchased in Canada and subsequently exported to XXXXX[.] The letter is in response to a telephone conversation XXXXX[.]

I understand that XXXXX paid for a van purchased from XXXXX in June, 1993. The vendor transferred title to the van to an orphanage in XXXXX[.]The van was shipped directly from XXXXX via common carrier to the orphanage. No documentary evidence was submitted to substantiate the facts.

XXXXX has concluded that since title to the van was transferred to the orphanage in XXXXX it is the orphanage who would be considered as the "recipient". As a result, the supply of the van would be zero-rated under Schedule VI, Part V, section 12 to the Excise Tax Act (Act).

Subsection 123(1) of the Act states, in part, that

'"recipient" of a supply of property or a service means

(a) where consideration for the supply is payable under an agreement for the supply, the person who is liable under the agreement to pay that consideration,"

I would suggest that a copy of the vehicle sale agreement be obtained from XXXXX. If the agreement for the supply of the van were between XXXXX and XXXXX it is likely that XXXXX would have been liable to pay the consideration, and not the XXXXX orphanage. Therefore, XXXXX would be the "recipient" of the supply of the van. The subsequent transfer of title in the van to the XXXXX orphanage would not be relevant. If this were the case, the supply of the van would not be zero-rated under Schedule VI, Part V, section 12, but would be subject to the GST at 7%.

If you require any additional information, please contact Mr. Garry Ryhorchuk of my staff at (613) 952-6743.

H.L. Jones
Director
General Tax Policy
Policy and Legislation