30 July 1999 GST/HST Ruling HQR0001837 - Section 6 of Part III of Schedule V to the Excise Tax Act (ETA)

Dear XXXXX

Thank you for your letter of April 15, 1999, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to XXXXX[.]

Ruling Requested

You are asking if a university can elect to have its XXXXX taxable by virtue of section 6 of Part III of Schedule V to the Excise Tax Act (ETA), as both courses are being recognized by regulatory bodies.

Ruling Given

It is the Department's position that a university cannot elect, pursuant to section 6 of Part III of Schedule V to the ETA , to have the supply of it XXXXX taxable.

Section 6 of Part III of Schedule V to the ETA provides that:

"a supply of

(a) a service of instructing individuals in courses leading to, or for the purpose of maintaining or upgrading, a professional or trade accreditation or designation recognized by a regulatory body, or

(b) a certificate, or a service of administering an examination, in respect of a course, or in respect of an accreditation or designation described in paragraph (a),

where the supply is made by a professional or trade association, government, vocational school, university or public college or by the regulatory body, except where the supplier has made an election under this section in prescribed form containing prescribed information."

This section is aimed at exempting tuition or examination fees charged by professional or trade associations, governments, vocational schools, universities, public colleges, or provincial or federal regulatory bodies for courses supplied for the purpose of obtaining, maintaining or upgrading a professional or trade accreditation or designation recognized by a regulatory body, such as an accounting designation. This section also provides the supplier of such courses with the option to elect to have the supply of the courses taxable.

It is the Department's position that the supply of XXXXX courses by universities for a diploma or a degree does not fall within section 6. Section 6 applies to courses "leading to or for the purposes of maintaining or upgrading a professional or a trade accreditation." This section does not apply to courses which are taken for a diploma or a degree. The supply of those courses are exempt under section 7 of Part III of Schedule V to the ETA which provides that: "A supply made by a school authority, public college or university of a service of instructing individuals in, or administering examinations in respect of, courses for which credit may be obtained toward a diploma or degree."

On April 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%[.] Example: Goods that are delivered or made available in a participating province are subject to the HST, 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.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 957-1175.

Yours truly,

Don Gagnon
Educational Services and Indians Unit
Division
GST/HST Rulings and Interpretations Directorate