2 October 1998 GST/HST Ruling HQR0000932 - Application of the GST/HST to Supplies of Designated Company Services Made to a Municipality

GST/HST Rulings and Interpretations
Place Vanier, Tower C, 9th Floor
25 McArthur Avenue
Vanier, Ontario
XXXXX                                                                                 K1A 0L5

Dear Sir:

I refer to your letter of October 31, 1997 (with attachments), the June 29, 1998 documentation from XXXXX and your submission of September 16, 1998 concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the transaction(s) described below.

Our understanding of the facts and the transactions is as follows.

Statement of Facts

1. XXXXX[.]

Ruling Requested

1. Are the supplies of the designated company services made by XXXXX [t]o municipalities under the Members Agreement exempt under the para-municipal provisions of section 28 of Part VI of Schedule V to the Act?

2. Are the supplies of the designated company services made by XXXXX to the XXXXX under the user agreement taxable at 7%?

3. Are the supplies of the designated company services made by XXXXX to the XXXXX treated as zero-rated supplies for ITC purposes?

Ruling Given

1. The supplies made by XXXXX to the member municipalities are exempt under paragraph 28(a) of Part VI of Schedule V to the Act.

2. The supplies made by XXXXX to XXXXX under the user agreement are taxable supplies.

3. The supplies made by XXXXX to XXXXX are treated as zero-rated supplies for ITC purposes.

This ruling is subject to the general limitations and qualifications outlined in section 1.4 of Chapter 1 of the GST Memoranda Series. We are bound by this ruling provided that none of the above issues is currently under audit, objection, or appeal; that there are no relevant changes in the future to the Excise Tax Act, or to departmental interpretative policy; and that you have fully described all necessary facts and transaction(s) for which you requested a ruling.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact Ms. Enikö Vermes, Manager, Municipalities, at (613) 954-5127 or the undersigned at (613) 954-4280.

Yours truly,

Owen W. Newell, CGA
Municipalities Unit
Governments and Public Service Bodies Division
GST/HST Rulings and Interpretations Directorate