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Attention: XXXXX
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February 28, 1994
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Dear XXXXX:
Thank you for your letter dated February 3, 1993, requesting an interpretation concerning the application of the GST to the XXXXX. We regret the delay in our response resulting from extensive consultations concerning the issues surrounding political parties and the GST.
This interpretation is based upon our current understanding of the Excise Tax Act (ETA) and regulations thereunder in their present form and does not take into account the effects of any proposed or future amendments thereto or future changes in interpretation.
While we trust that these comments will be of assistance to you, they do not constitute a GST ruling and are therefore not binding upon the Department in respect of any particular fact situation.
You have requested confirmation of the following:
i) that the XXXXX, XXXXX associations and affiliated organizations of the Party constitute a single person for GST purposes; and
ii) that the Party is engaged exclusively in commercial activities and, subject to the usual restrictions, is entitled to claim input tax credits for GST paid on all its purchases.
On the basis of information provided in your letter and in subsequent conversations with XXXXX and with XXXXX and XXXXX of the Party, we confirm that the XXXXX, the XXXXX associations and affiliated organizations XXXXX constitute a single person for the purposes of the GST. As the XXXXX is a separately incorporated entity, it will constitute a separate person in its own right under the GST.
As we have not been provided with a detailed description of the nature and scope of all the activities carried on by XXXXX we cannot confirm that it is engaged exclusively in commercial activities. However, based on the information provided, it appears that the Party is engaged in regular and continuous activities which include making supplies of admissions to conventions and fund-raising events, both to its members and to the media, supplies of printing services, and supplies of memberships for which an election has been made under section 17 of Part VI of Schedule V to the ETA to be treated as non-exempt. On this basis, we confirm that XXXXX is engaged in a commercial activity and thus, may register for the GST.
We have not been provided with specific information concerning the activities of the XXXXX and therefore cannot confirm that it also will be entitled to register for GST purposes.
The Party may claim input tax credits to recover the GST paid on all purchases, except to the extent that the purchase is acquired for the purpose of making exempt supplies. Where purchases (e.g., overhead), are acquired both for consumption and use in the course of commercial activities and for the purpose of making exempt supplies, the Party will be required to apportion its input tax credits between these activities.
The Party will be entitled to claim input tax credits in respect of purchases acquired for the purpose of making taxable admissions to fund-raising events and conventions, for printing services and for admissions or other rights sold to the media in the course of an XXXXX[.]
As you have indicated that an election has been made to treat membership to the Party as non-exempt, the Party will be entitled to claim input tax credits to recover the GST paid on purchases acquired for the purpose of making supplies of membership. We consider that activities such as research, strategic planning, policy development and XXXXX are incurred by the Party for the purpose of supplying its memberships. Therefore, the Party will be entitled to claim input tax credits to recover the GST paid on purchases incurred in the course of these activities.
I trust that this will be of assistance. If you would like to discuss these issues further, please contact Joanne Houlahan at (613) 954-7945 or Elaine Bonnah at (613) 952-6761.
Yours truly,
J.A. Venne
Director
Tax Policy - Special Sectors
Policy and Legislation
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