File: 12000-1
Doc: 564
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Subject:
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XXXXX and the Supply of Passenger Transportation services to a Tour Operator
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This letter is in response to your facsimile of June 17, 1994 to Pam Lafrance concerning the application of the Goods and Services Tax (GST) to the sale of XXXXX and the supply of passenger transportation services to a Canadian tour operator. I regret the delay in responding to your inquiry.
XXXXX
Statement of Facts
1. XXXXX[.]
2. The pass, which must be purchased XXXXX days prior to the first day of travel, is used in conjunction with a ticket book containing XXXXX coupons, each with the same ticket number.
3. Passengers can present the XXXXX ticket book to a ticket agent or bus terminal agency ticket office, at which time the agent prepares a travel coupon and provides schedule information.
4. The coach driver detaches the travel coupon upon boarding. The driver retains half the coupon and the other half is returned to the customer.
5. When most or all of the coupons have been used, a new ticket coupon booklet may be obtained at a major coach terminal provided the present one has not expired. In the case where a second ticket book is provided, the ticket number may differ from that of the first book.
6. A totally unused travel pass is refundable (less a XXXXX cancellation fee), no refund is allowed where the pass is partially used.
7. Eligible travel routes also includes departures or arrivals at XXXXX[.]
8. Passes may be purchased from various terminals and locations in Canada and from agents in XXXXX.
9. The pass is not transferable, and in order to acquire a new coupon book, pass holders are required to provide identification.
10. XXXXX charges GST on the XXXXX.
Question:
If a travel pass purchaser begins or ends his journey in XXXXX would the purchase of the travel pass be zero-rated under section 2 of Part VII of Schedule VI? If not, would there be any situations where section 2 would apply?
Answer:
There is no indication or requirement that a pass must be used for a journey which originates, terminates, or includes a stopover at a place outside Canada. For this reason it cannot be said that passes sold in XXXXX are always zero-rated. As such, the supply of XXXXX will be subject to GST at 7%. A passenger who is able to provide evidence, satisfactory to the Minister, that the pass was used in respect of a journey which satisfied the zero-rating conditions of section 2 of Part VII of Schedule VI to the Act, may apply to XXXXX for a refund of the GST pursuant section 232 of the Act. If a refund is not issued by XXXXX, the passenger may apply to the Department for a rebate of the GST as tax paid in error pursuant to section 261 of the Act.
Question:
Would we consider the XXXXX to be a single ticket or voucher in respect of all services or would we consider the XXXXX to be 2 or more tickets or vouchers with respect to 2 or more legs of a single journey?
Answer:
The XXXXX is non-transferable, non-refundable (except if none of the coupons are used), it is sold for a single consideration and it is issued for a specified period of time, therefore, it is our opinion that the XXXXX is considered a single ticket.
The possible addition of a second ticket coupon booklet does not change the status of the pass. The additional booklet is a matter of convenience, used in circumstances where the time period on the pass has not expired but all the coupons in the previous booklet have been used. It allows the traveler to make the most use of the pass under the original conditions of purchase.
Bus transportation supplied to a Canadian tour operator
Statement of Facts
1. A bus owner/operator under contract supplies a passenger transportation service to a Canadian tour operator.
2. The tour operator puts together a package whereby passengers will take the bus from XXXXX, where they will board a plane to XXXXX, where upon they board a cruise ship to the XXXXX.
3. Upon completion of the cruise, passengers will fly from XXXXX and then board the bus to return to XXXXX.
Question:
Is the bus operator's supply of transportation services zero-rated as part of a continuous journey within the provisions of section 2 of Part VII of Schedule VI?
Answer:
Yes. The supply of the passenger transportation service by the bus operator to the Canadian tour operator will be zero-rated pursuant to section 2 of Part VII of Schedule VI to the Act.
If you have any questions or comments, please do not hesitate to contact either Dwayne Moore at 954-4206 or Tom Alley at 952-9218[.]
Yours truly,
J.A. Venne
Director
Tax Policy - Special Sectors
GST Policy & Legislation
c.c.: A. Belyea
c.c.: T. Alley
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