1 July 1996 GST/HST Interpretation 11585-32[7] - Input Tax Credit Entitlement of a Trust

Dear Sir:

This is in reply to your letter of January 26, 1996 concerning the input tax credit entitlement of the XXXXX. The XXXXX is responsible for administering the XXXXX pension plan, XXXXX[.] The XXXXX was created pursuant to a trust agreement XXXXX XXXXX and is made up of XXXXX trustees - XXXXX trustees appointed by the XXXXX and XXXXX trustees appointed by the XXXXX.

In your letter you state that the XXXXX is a trust, and is therefore a "person" within the meaning of subsection 123(1) of the Excise Tax Act. It is engaged in "commercial activity" to the extent that it delivers administrative services to the employers, and the XXXXX should hence be eligible for input tax credits for GST payable on supplies used in the course of delivering these services.

Our Comments:

We note that although the XXXXX is a trust and, therefore a "person" for purposes of Part [I]X of the Excise Tax Act, it does not make any taxable supply of the administrative services to any participating employer(s) of the plan; and no specific consideration is charged by the XXXXX to the employers for it services. Under these circumstances, it is our view that the supplies acquired by the XXXXX cannot be said to have been acquired "for use in the course of its commercial activities". Under the current provisions of the Excise Tax Act, there is no legislative basis to allow the XXXXX input tax credits for GST paid or payable by it on these supplies.

We trust our comments will be of assistance.

Yours truly,

J. Sitka
A/Director
Financial Institutions and Corporate Re-organizations Division
GST Rulings and Interpretations