XXXXX
Dear XXXXX
Thank you for your letter of February 18, 1993, concerning the application of GST to supplies by school authorities and/or student councils. We regret the delay in responding.
It is understood that two different registrants were audited by the XXXXX. One was a student council at a high school and the other was a high school, which should have been set up as a branch of the school board. Both were in the same school district. You have requested confirmation of your opinion that the student council is not a separate person from the school and therefore the school authority.
If the student council was incorporated separately, this would clearly indicate that it is a separate person. However, since the student council is not incorporated separately, it is necessary to determine whether the majority of facts concerning the operation of the student council support the idea that it is a separate person from the school authority, or whether the majority of facts support the idea that it is part of the school authority.
The following facts that you have provided would support the idea that the student council is a separate person;
(a) separate books and records are maintained on behalf of the student councils; and
(b) separate bank accounts are kept on behalf of the student councils.
However, the following facts that you have provided would support the idea that the student council is not a separate person, but is instead part of the school authority:
(a) the student councils are operating shops on the premises of the schools, where they sell promotional items and food, and use the school halls for dances, but the student councils are not charged any rent by the school board for the use of school board real property;
(b) contracts with suppliers of the student councils are entered into in the name of the school in which the student councils are located, rather than in the names of the student councils;
(c) the school principals exercise significant control over the activities of the student councils, and the ongoing activities of the student councils are controlled by faculty advisors;
(d) all profits of the student councils from such activities as the operation of shops in the schools and the staging of dances are turned over to the schools in which the student councils are located, in order to fund field trips and to subsidize other events.
The majority of the relevant facts indicate that the student councils are not functioning as separate persons for the purpose of making supplies, so the student councils should be regarded as part of the school board for GST purposes.
You stated in a discussion with Don Dawson that the Question and Answer data base indicates that student councils are not part of the related school authorities, and you questioned whether this is always correct. We have reviewed the Question and Answer data base and, in our view, we have not taken the position that student councils are always to be considered as separate from their related school authorities.
The answer to GST 4.C.13. (a copy of which is attached) indicates that if a student council is a separate person from the school authority and is making supplies as a separate person, it is not eligible for rebates pursuant to section 259 of the Excise Tax Act.
The response also indicates that, in order to decide whether a student council is making supplies as a separate person from its related school authority, one should look at whether the student council has its own bank account, whether it makes purchases in its own name, and whether the school authority has the right to the assets of the council if it is disbanded.
Other issues may be relevant in individual cases, and each situation should be considered on a factual basis. Thus, the answer clearly indicates that in some instances, a student council may be considered to be part of a school authority, rather than being considered a separate person for GST purposes.
If you have any questions regarding this letter, please do not hesitate to contact Don Dawson at (613) 954-4393.
Sincerely,
J.A. Venne
Director
Tax Policy - Special Sectors
Policy and Legislation
Excise/GST
| c.c.: |
J.A. Venne
J. Houlahan
D. Dawson |
Email this Content