File: 11845-2
C.N.: 1450
XXXXX October 4, 1995
This is in response to your fax of September 29, 1995, regarding the GST status of the supply of a modified highway truck with a manure spreader attached.
As per you fax, the facts of the case are as follows:
1) The trucks are highway truck tractors designed primarily for the carriage of freight with a gross vehicle mass rating of 7250 kg. or greater.
2) The trucks are modified. The frame is extended and a PTO installed if necessary. Once modified, a used box manure spreader is mounted to the chassis of the truck.
3) The objector used the truck(s) in his farming operation and later sold three of the units without collecting the GST.
Pursuant to the Agriculture and Fishing Property (GST) Regulations the supply of "liquid, box or flail manure spreaders" are zero-rated when supplied by way of sale. The question at hand is whether this truck is of the type of equipment included in the Regulations.
It is our opinion that the good being supplied remains a highway truck. The addition of the box manure spreader does not change this fact.
The box manure spreader supplied separately would be considered a zero-rated supply under the Regulations. However, once attached to the truck it is no longer considered a manure spreader in its own right, it is part of a greater whole, namely the highway truck tractor, which is not zero-rated for GST purposes.
Recently, we had a similar case where an airplane with attached crop dusting equipment was being imported and the issue was raised regarding whether the plane should be considered under the Regulations as a "self-propelled field sprayer or duster with a total a tank capacity of at least 300 litres". It was our opinion that the primary character of the importation remained that of an airplane and the importation was therefore subject to the GST at 7%.
Similarly, with your case, the primary character of the supply remains that of a highway truck tractor. Therefore the supply of the modified truck tractor remains taxable at 7%. Under the Agriculture and Fishing Property (GST) Regulations it is the intention of the Department of Finance to be restrictive. They have stated that it is not their intention to zero-rate the supply of road worthy vehicles.
If you would like to discuss this matter further, please do not hesitate to contact Ken Syer at (613) 952-9590.
Enikö Vermes
Manager
Health Care, Goods and Services
GST Rulings and Interpretations
Policy and Legislation Branch
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