16 September 1998 GST/HST Ruling HQR0001148 - Instruction Provided by First Aid Training Organization

                                                                        GST/HST Rulings and Interpretations
Directorate
Place Vanier, Tower C, 10th Floor
25 McArthur Avenue
Vanier, ON K1A 0L5

Dear Mr. Weisbloom:

Thank you for your request of April 22, 1998, with attachments, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to courses provided by a number of first aid training organizations. Please disregard our letter of June 1, 1998 on the same subject.

Statement of Facts

Our understanding of the background facts is as follows:

The following three organizations (collectively referred to XXXXX supply courses largely related to occupational first aid courses according to the requirements of XXXXX

•   XXXXX The businesses operated for a number of years with the understanding that their courses (listed below) were exempt from GST:

•   XXXXX The businesses are registered for GST purposes; they have reported small amounts of GST collectible and claimed ITC's on all of their purchases. The businesses are also registered under XXXXX Audit assessed and determined that their supplies were taxable on the following basis:

•   prior to January 1, 1997 - courses did not fall within sections 6 nor 8 of Part III of Schedule V to the Excise Tax Act (ETA);

after January 1, 1997 - XXXXX did not fall within the meaning of "vocational school" set out in section 1 of Part III of Schedule V to the ETA.

Notices of objection have been filed by the XXXXX organizations.

Ruling Requested

•   Under our policy, do the above organizations fall within the meaning of "vocational school" as described in section 1 of Part III of Schedule V to the ETA?

•   Is it our view that courses supplied by the above organizations are exempt under sections 6 or 8 of Part III of Schedule V to the ETA?

Ruling Given

1. It is the Department's position that XXXXX is a "vocational school" in that it was established and operated primarily to provide students with courses that "develop or enhance students' occupational skills".

2. The courses provided by XXXXX are exempt under section 8 of Part III of Schedule V to the ETA. They are not exempt under section 6 of Part III of Schedule V to the ETA.

Explanation

An organization will qualify as a vocational school if it meets all the requirements in the definition. Pursuant to section 1 of Part III, a "vocational school" means an "organization that is established and operated primarily to provide students with correspondence courses, or instruction in courses, that develop or enhance students' occupational skills."

To determine whether an organization is established primarily to provide courses that enhance students' occupational skills, we will examine its governing documents. These documents, which include letters patent, articles of incorporation, memoranda of agreement, and by-laws, should contain information as to the reason or purpose for the establishment of the organization. In circumstances where that information is not readily available, how the organization is operated will be evidence of the purpose for its establishment.

The Department will consider an organization to be providing instruction in skill enhancing courses if the courses it provides are not in respect of sports, games, hobbies or other courses that are designed to be taken for recreational purposes or for personal interest. The purpose or the intent of the courses may be obtained from a review of the curriculum and the organization's promotional material. Further, with respect to the operated primarily requirement, most of the organization's revenue and human resources should be attributed to the provision of courses that enhance students' occupational skills.

As you are aware, section 6 of Part III of Schedule V to the ETA sets out that courses (or examinations or certificates in respect of the courses) provided by a vocational school are exempt where the courses lead to, or maintain, or upgrade a professional or trade accreditation or designation recognized by a regulatory body. Notwithstanding that the XXXXX regulates First Aid under the Occupational Health and Safety Regulation, it is the Department's position that courses provided by XXXXX do not lead to, maintain, or upgrade a professional or trade accreditation or designation. Therefore, in our view, courses supplied by XXXXX are not exempt under section 6 of Part III of Schedule V to the ETA.

Section 8 of Part III of Schedule V to the ETA exempts the service of instructing in courses leading to a certificate that attests to the competence of individuals to practice a trade or vocation, where the vocational school is regulated by provincial legislation respecting vocational schools. In our view, courses provided by XXXXX meet the requirements of section 8 of Part III of Schedule V. More particularly, the First Aid courses offered by XXXXX are intended to be taken as part of a program of courses by persons that require such training in order to perform their trade and maintain their chosen occupation. Therefore, the courses "attest to the competence of the individuals to practice or perform a trade or vocation", and are exempt supplies pursuant to section 8 of Part III of Schedule V to the ETA.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-4157.

Yours truly,

Kristine A. Allen
Education and Indians Unit
Public Service Bodies and Governments Division
GST/HST Rulings and Interpretations Directorate