1 April 1997 GST/HST Interpretation HQR0000487 - Condominium Lockers

Dear Sir:

Thank you for your letter of November 12, 1996 to our XXXXX Tax Services Office concerning the application of the Goods and Services Tax (GST) to the sale of lockers by your client, a condominium corporation in XXXXX From my telephone conversation with you on April 2, 1997, and the above letter, I understand the facts are as follows:

Statement of Facts

1. Your client is the original owner of XXXXX lockers in the basement of a condominium building. It sells XXXXX lockers each year to the condominium unit owners in the building, for an average price of XXXXX each.

2. A unit owner who buys a locker obtains a separate deed to the locker. This deed is separate from the deed to the condominium unit. There are By-laws which restrict what an owner can do with a locker; for example, it can only be sold to another unit owner.

3. Your client has been collecting and remitting the GST on the above sales of lockers.

Interpretation Requested

What is the GST status of the supply of a locker from the condominium corporation to a unit owner?

Interpretation Given

1. Based on the information provided, the supply of a locker qualifies for exemption from GST under section 13 of Part I of Schedule V to the Excise Tax Act ("the Act")

2. With regard to sales before July 1996, your client may refund to the purchasers the tax amounts collected in error on the lockers, under section 232 of the Act, subject to a four-year time limit from the end of the reporting period in which the sales. For sales after June 1996, the time limit under the same provisionis two years from the date of sale. Prescribed information must also be provided as required by section 3 of the attached "Credit Note Information Regulations". Your client will then be entitled to a refund of the same amounts from our Department.

3. Your client must also refund to the Department the any input tax credits(ITCs) taken in error related to GST paid on its expenses connected with the lockers. Your client is also not entitled to any ITCs on any current or future expenses incurred in respect of the lockers.

The foregoing comments represent our general views with respect to the subject matter of your letter. Proposed or future amendments to the legislation may result in changes to our interpretation. These comments are not rulings and, in accordance with the guidelines set out in section 1.4 of Chapter 1 of the GST Memoranda Series, do not bind the Department with respect to a particular situation.

For your convenience, find enclosed a copy of section 1.4 of Chapter 1 of the GST Memoranda Series.

Should you have any further questions or require clarification on the above or any other Excise/GST matter, please call me at (613) 9587. For any questions on the necessary adjustments to your client's GST account, please call ou XXXXX[.]

Yours truly,

Bao Tran
Real Property
Financial Institutions & Real Property Division
GST Rulings and Interpretations

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b.c.c.:   H.Q.Quality Assurance