GST/HST Rulings and Interpretations
Directorate
Place Vanier, Tower C, 10th Floor
25 McArthur Avenue
Vanier, Ontario K1A 0L5
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Subject:
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GST/HST APPLICATION RULING
Application of HST to Postage
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Dear XXXXX
Thank you for your letter of May, 1998 concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to postal services that was forwarded by XXXXX to this office for reply.
Statement of Facts
Our understanding of the facts, the transaction(s), and the purpose of the transaction(s) is as follows:
• Your business is registered for the purposes of the Excise Tax Act.
• You mailed a shipment with Canada Post Corporation (CPC) from your place of business in XXXXX to a customer in XXXXX[.]
• CPC charged XXXXX plus applicable GST and HST for the postage applied to this shipment.
Ruling Requested
You requested that HST was incorrectly applied by CPC to the postage.
Ruling Given
Based on the facts set out above, we rule that HST was correctly applied by CPC.1, 1997, the harmonized sales tax (HST) replaced the goods and services tax (GST) and the provincial sales tax (PST) in the three participating provinces of Nova Scotia, New Brunswick and Newfoundland with a harmonized tax rate of 15%, to the extent that they are taxable supplies (which are not zero-rated), tax must be collected at the harmonized rate.
This ruling is subject to the general limitations and qualifications outlined in section 1.4 of Chapter 1 of the GST/HST 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.
Explanation
The Excise Tax Act contains specific instruction on circumstances when HST will be applied. These specifics may be referred to in Part VII of Schedule IX to the Excise Tax Act. The legislation, in part, specifies that where the postage service is $5 or more, the application of GST/HST is determined by the address where the mail is sent. From the information that you have provided, the delivery is to an address in Newfoundland, a participating province, and the CPC invoice is in excess of $5. On the strength of these facts, CPC was correct in applying HST.
Prior to the implementation of HST an information mailing was sent to all registrants explaining the application of GST/HST. Please find enclosed a copy of our publication "General Information for GST/HST Registrants" in the event your copy has been misplaced.
Important Other Information
In closing, I would also draw your attention to the fact that as a registrant you are also bound by the Excise Tax Act to apply HST when making supplies of picture frames or other tangible personal property in a participating province. Please refer to page 9 of the enclosed publication.
Should you have any further questions or require clarification on the above matter, please refer to the enclosed announcement "Revenue Canada - GST/HST Rulings and Interpretations Service".
Yours truly,
David Crawford
General Operations Unit
General Operations and Border Issues Division
GST/HST Rulings and Interpretations Directorate
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