1 September 1996 GST/HST Interpretation 11725-8[1] - Expenses Incurred by Private Lawyers Who Supply Legal Services to Legal Aid Services Which Are Non-government Entities

                                                                        File: 11725-8
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Gentlemen:

I refer to my letters of August 30, 1990, November 19, 1990 and January 21, 1991 to you concerning expenses incurred by private lawyers who supply legal services to legal aid services which are non-government entities and in particular to XXXXX[.]

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"When a lawyer incurs certain expenses on behalf of clients who receive legal aid services from a non-government legal aid services plan ("the Plan") and is reimbursed by the Plan, these expenses, usually referred to as disbursements, form part of the consideration for legal services supplied by the lawyer to the Plan under section 178 of the Excise Tax Act (the Act). The rationale that these expenses have to be pre-approved by the Plan to ensure "re-imbursement" is not sufficient to make the lawyer an agent of the Plan. Accordingly, the Plan is eligible for a 100% rebate of GST payable in respect of such disbursements under section 258 of the Act."

If you have any questions on the foregoing, please contact Bao Tran, of my staff, at (613)-952-9587.

Yours truly,

J.A. Venne
Director
Special Sectors
GST Rulings & Interpretations

c.c.:      Bao Tran