12 August 1999 GST/HST Interpretation HQR0001881 - Offset of Taxes by a Refund or Rebate (GST) Regulations - Form GST 303B

Thank you for your e[-]mail message of July 7, 1999 addressed to Duncan Jones, manager, Financial Institutions Unit, concerning joint filers and closely related corporations.

Our understanding of your questions is as follows:

1) Can limited partnerships file jointly form GST 303 (A&B), Application to offset taxes by refunds or rebates?

2) Why was the following paragraph, stated in the "Instructions" section, taken out from the old form GST 303B and not included in the existing form.

"The co-ordinator and or any member may not withdraw from or add members to this agreement any earlier than one year after the date the application became effective."

In addition, you wish to know when this requirement ceased to be effective.

Comments:

1) Subsection 228(7) of the Excise Tax Act (the "Act") provides that in circumstances and conditions prescribed by regulations, the tax remittable by one person may be offset by the amount of any refund or rebate another person is entitled to claim. Under the Offset of Taxes by a Refund or Rebate (GST) Regulations SOR/91-49, as amended by SOR/93-242 (the "regulations"), this set-off is only available to members of a "closely related group".

Subsection 123(1) of the Act, defines "closely related group" as follows:

"closely related group" means a group of corporations each member of which is closely related, within the meaning assigned by section 128, to each other member of the group.

A limited partnership is a type of partnership, and generally a partnership is a separate person for GST/HST purposes. Since it is not a corporation, it is not eligible for joint filing under the regulations.

2) The regulations do not require that a one year time limit be imposed on the co-ordinator or any members of the closely related group before changing the agreement. The policy requiring the one year time limit may have been operationally based. Form GST 303B was revised in 1996 and the paragraph referring to the one year time limit was removed. This suggests that the policy regarding the one year time limit would not have been in effect since that time.

J.E. Allard
Technical Analyst
Specialty Tax Unit