8 June 1995 GST/HST Interpretation 11845-2[4] - The Application of the Goods and Services Tax (GST) to Farm Livestock Sold for Export

                                                                        C.N.: 1286 XXXXX
File: 11845-2
 XXXXX                                                                                June 8, 1995

Dear Mr. XXXXX

In a memorandum dated July 8, 1994, addressed to you (File: 11845-2, C.N.: 1842), I discussed the application of the Goods and Services Tax (GST) to farm livestock sold for export.

The first paragraph on page two of that memorandum states that commission charges levied on the sale of the livestock are fees for services provided in Canada and pursuant to paragraph 7(a) of Part V of Schedule VI to the Excise Tax Act the commissions charges are subject to the GST at 7%. We have reviewed the memorandum and have determined that the information relating to commissions requires revision. Our revised position is as follows:

Where the commission relates to a sale of zero-rated farm livestock, and the vendor resells the livestock at his cost, the commission may be considered an amount which can be characterized as the vendor's "mark-up" and it is reasonable to consider the commission to be part of the consideration for the zero-rated farm livestock. In this case, the amount charged for the commission would be zero-rated.

The remainder of the information in the letter of July 8, 1994, remains unchanged. We regret any inconvenience that this may cause. If you would like to discuss this matter further, please do not hesitate to contact Ken Syer at (613) 952-9590.

J.A. Venne
Director
Special Sectors
GST Rulings and Interpretation

c.c.:      K. Syer
            E. Vermes
            G. Ryhorchuk
            J. A. Venne

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