File #11915-7-4
Ref. s. 8/Pt. III/Sch. V
Document #1003
XXXXX August 8, 1995
Dear XXXXX
This refers to your facsimile message to Mr. Don Dawson on November 3, 1994, concerning the GST status of supplied truck driver training courses made by the XXXXX[.]
Facts
(1) The information you supplied us with indicates that XXXXX is a private, for-profit organization that is registered under XXXXX[.]
(2) XXXXX has been certified by the Ministry of Employment and Immigration for purposes of subsection 118.5(1) of the Income Tax Act.
(3) XXXXX makes the following supplies, using instruction in actual vehicles, as well as classroom instruction:
(a) a XXXXX full time training course involving group instruction, including both classes and practical training, to prepare the student to write a test administered by XXXXX in order to acquire a class AZ licence, which permits individuals to drive tractor trailers on a commercial basis;
(b) a supply of one on one tutoring to prepare the student to write a test to acquire a class AZ licence (this is separate and distinct from the four week group course for the AZ training);
(c) an upgrading course, including both classes and practical training, to prepare a person with a DZ licence to write the AZ licence test; and
(d) a course, including both classes and practical training, to prepare a person with a class G licence to write the DZ licence test, which permits individuals to drive large single unit trucks on a commercial basis;
XXXXX also provides classroom only courses to prepare individuals to write AZ and DZ licence tests.
(4) XXXXX also provides the following courses that are not intended to prepare an individual to write a licence test;
(a) refresher courses for people with AZ or DZ licences;
(b) air brake courses; and
(c) skid control courses.
(5) Individuals who satisfactorily complete any of the courses referred to above receive certificates stating that they have completed the course in a satisfactory manner. However, no certificate is issued for the one on one tutoring.
(6) XXXXX provides written driver evaluations for a fee, but the evaluations are not courses.
(7) XXXXX has approved the XXXXX full-time training course to prepare the AZ licence test. You indicated that employees of the Ministry stated that Ministry approval means that it has reviewed the course and found the course to meet provincial standards. Such approval of the core curriculum of a vocational school is a normal requirement for registration under XXXXX[.]
(8) You indicated that a representative of XXXXX advised you that in order for a person to receive a Class AZ and/or DZ licence, they must possess a Class G licence, pass a medical examination, pass a written test and pass a road test within one year of passing the written test. The Ministry does not require a person to take any truck driver training courses.
Request
You requested a decision as to whether section 8 of Part III of Schedule V to the Excise Tax Act (ETA) exempts any of the following supplies offered by XXXXX
(a) a XXXXX full time training course to prepare individuals to write a test administered by the XXXXX in order to acquire a class AZ licence;
(b) one on one tutoring for the AZ course;
(c) an upgrading course to prepare an individual with a DZ licence to write the AZ licence test;
(d) a course to prepare an individual with a class G licence to write the DZ licence test;
(e) classroom only courses to prepare individuals to write AZ and DZ licence tests;
(f) a refresher course for individuals with AZ or DZ licences;
(g) air brake courses;
(h) skid control courses; or
(i) driver evaluations.
Response
Since XXXXX is certified by the Minister of Employment and Immigration for purposes of subsection 118.5([1]) of the Income Tax Act, it is a vocational school pursuant to section 1 of Part III of Schedule V to the ETA.
Section 8 of Part III of Schedule V to the ETA exempts, among other things, a supply by a vocational school of a service of instructing individuals in, or administering examinations in respect of, courses leading to documents that attest to the competence of individuals to practice or perform a trade or vocation where the supplier is governed by federal or provincial legislation respecting vocational schools.
All the courses listed above, except for the refresher course, are exempted by section 8, because they lead to documents attesting to the competence of individuals to practice or perform a trade or vocation, and XXXXX is governed by provincial legislation respecting vocational schools, as it is registered under XXXXX[.] The individual tutoring is also exempted, since it is taken in conjunction with the four week, full time AZ training course and is intended to help the individual obtain the certificate for completion of the course.
We wish to emphasize that, contrary to what Mr. Dawson indicated in his telephone conversations with you, the courses are not considered to lead to a licence issued by XXXXX because the courses are not required in order to write the provincial licence examinations. The documents that we are referring to as attesting to the competence of individuals to practice or perform a trade or vocation are the graduation certificates issued by XXXXX to individuals who successfully complete the course.
The refresher course is not exempted by section 8, since it does not lead to a document attesting to the competence of individuals to practice or perform a trade or vocation. It merely provides a refresher course to individuals who are already competent to practice or perform a trade or vocation. The driver evaluations are also not exempted by section 8, since they are not courses.
Since no other exempting provisions apply to the refresher course or the driver evaluations, they are taxable. However, if the total amount of taxable supplies made in one year by XXXXX does not exceed $30,000, XXXXX need not remain registered for GST purposes and, if it is not registered or required to be registered, it is not required to remit GST on its taxable supplies.
During a telephone conversation of June 20, 1995, between Mr. Dawson and XXXXX indicated that his client required information concerning allocation of input tax credits. It may therefore be necessary to acquaint the taxpayer with the provisions of sections 141, 169, 199 and 206 of the ETA, as they apply to different types of input tax credits. Since XXXXX indicated that XXXXX is particularly concerned with what input tax credits can be claimed with regard to its recent purchase of highway truck tractors for use in the instruction of its students, you may wish to emphasize the primary usage rule in section 199 of the ETA. If the highway truck tractors recently purchased by XXXXX are capital personal property, their treatment is subject to section 199.
I note that the request for an interpretation came from an accounting firm, rather than from the trucking school. Please ensure that you have obtained a letter of authorization from the trucking school before responding to the accounting firm about GST matters affecting the trucking school.
If you require any further information concerning this matter, please contact Mr. Don Dawson at 954-4393.
J.A. Venne
Director
Tax Policy - Special Sectors
GST Policy and Legislation
| c.c.: |
J. Houlahan
D. Dawson
XXXXX |
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