|
XXXXX
|
File #: 11715-1(glr)
XXXXX HQR0000287
XXXXX s. 142, 165, 179
XXXXX Sch. VI/V/7
|
October 31, 1996
I refer to XXXXX E-mail messages of September 11 and October 2, 1996, his facsimile message of September 11, 1996, my E-mail message of October 2, 1996, and my telephone conversation with XXXXX on October 8, 1996, concerning the status for Goods and Services Tax (GST) purposes of mailing house services supplied by a Canadian mailing house to an unregistered non-resident mailing house.
Departmental officers understood, from discussions with officials of the Department of Finance, that Division II tax at 7% would not apply to mailing house services being supplied to an unregistered non-resident mailing house provided the service was in respect of prescribed property (such as magazines) under section 143.1 of the Excise Tax Act (Act). This was the information contained in my facsimile message dated January 5, 1995, to XXXXX of your office. However, the proposed amendment to subparagraph 179(1)(a)(i) of the Act, contained in the Notice of Ways and Means Motion of April 23, 1996, to exclude property of a registered person from the application of the drop-shipment rules, does not reflect this understanding.
Although the drop-shipment rules in section 179 will not apply to the supply of the mailing house services, the general rules in the Act will apply to the supply.
The supply to the unregistered non-resident mailing house cannot be zero-rated under Schedule VI, Part V, section 7 to the Act in view of the exclusion in paragraph 7(e) for a service in respect of tangible personal property that is situated in Canada at the time the service is performed. As there are no other zero-rating provisons which could apply, the supply of the mailing house services is subject to the GST at 7% under the provisions of subsection 165(1) of the Act, calculated on the value of the consideration for the supply of the services.
Attached for your information is a copy of GST Q&A #6.e.29 (revised May 1996) dealing with the supply of mailing house services to non-residents.
Please contact me at (613) 952-6743 if further information is required.
Garry L. Ryhorchuk
Senior Policy Officer
Border Issues Unit
General Operations and Border Issues Division
GST Rulings and Interpretations
Policy and Legislation Branch
Attachment
| c.c.: |
R. Nanner
G. Ryhorchuk
Telephone: (613) 954-5021
Fax: (613) 990-1233 |
Email this Content