8 February 1995 GST/HST Interpretation 1995-02-08[3] - Grain Aeration System Multiple/Single Supplies

                                                                        February 8, 1995
11845-2(PDL)
CN 915

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I am responding to your letter of March 30, 1994, sent to Mr. H. L. Jones regarding the application of the multiple/single supply policy to the supply of grain aeration equipment. Since the supplies in question are agricultural equipment, Mr. Jones has forwarded to me a copy of your request with attachments.

I understand that a farmer has purchased grain drying systems from different suppliers and that each supplier applied the GST differently. One invoice dated April 27, 1993, itemized the supply as one item, a XXXXX , and did not charge GST. The other invoice itemized the supply as two items, a XXXXX and a XXXXX , and applied GST on the XXXXX . The farmer is questioning the different tax application. The second supply in which GST was applied is understood to have occurred on December 30, 1993.

Section 10, Part IV of Schedule VI to the Excise Tax Act zero-rates a supply of prescribed property. The prescribed property which is listed in the Agriculture [and] Fishing Property (GST) Regulations is zero-rated when supplied by way of sale. Subparagraph (1)(f) of section 2 of the Schedule to the Regulations provides for grain bins or tanks with a capacity of not more than 181 cubic metres or 5000 bushels. Bins or tanks meeting the size requirements, when sold with parts (floors, skids, hopper bottoms or drying facilities) and invoiced as a complete unit, are zero-rated. Parts, such as floors, skids, hopper bottoms are taxable at the rate of 7% when sold separately. It is understood that the grain bins in question meet the size requirements for a zero-rated status.

For purposes of the initial supply on April 27, 1993, the supply is considered a single supply of a zero-rated grain bin.

Notwithstanding the above, the Agriculture and Fishing Property (GST) Regulations were amended effective June 10, 1993 to include "grain dryers". Effective June 11, 1993, the supply of grain dryers by way of sale is zero-rated. Therefore on December 30, 1993, the supply of a grain dryer by way of sale is zero-rated.

You may contact Pamela Lafrance, Policy Officer, Goods and Health Care at (613) 957-9152 for further information.

Yours truly,

E. Vermes
A/Manager
Tax Policy - Goods and Health Care
GST Policy and Legislation

            L. Jones
Director
General Tax Policy

            P. Lafrance
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