31 March 1999 GST/HST Interpretation HQR0001400 - General Charity Exemption

Dear XXXXX

This is in reply to your e-mail of October 28, 1998, sent to Susan Eastman of this Unit, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the XXXXX  by the XXXXX  XXXXX[.] Our understanding of the limited facts is as follows:

1. The XXXXX is a charity for GST/HST purposes.

2. For the purpose of fund-raising the XXXXX foundation XXXXX[.]

3. XXXXX  is a GST/HST registrant and in the past, has collected and remitted GST on the XXXXX[.]

Information Provided

Most supplies by a charity are subject to the general charity exemption under section 1 of Part V.1 of Schedule V. However, the paragraphs under that section describe certain exclusions from the general exemption. It is our view that the XXXXX  XXXXX is excluded from section 1 of Part V.1 of Schedule V by paragraph (d). This paragraph excludes from this exemption the sale of "... tangible personal property that was acquired, manufactured, or produced by a charity for the purpose of making a supply of the property, and the property was neither donated to the charity nor used by another person before its acquisition by the charity. ..."

Even though the general charity exemption may not apply in this situation, it is quite possible that the fund-raising exemption under section 3 of Part V.1 of Schedule V may apply. This provision exempts the sale of personal property or services in the course of a fund-raising activity of a charity, with specific exclusions. Pursuant to these exclusions, the XXXXX  will not be exempt under section 3 if both of the following conditions are met:

1. the XXXXX either throughout the year or a significant portion of the year; and

2. during that period, the XXXXX  regular or continuous basis.

The Department XXXXX  be a significant portion of the year. However, to be excluded from the exemption in section 3, the calendars would also have to be sold on a regular or continuous basis throughout that period. Therefore, if the XXXXX on a sporadic basis during that period, then it is possible that the fund-raising exemption in section 3 would apply to these sales by the charity. As you discussed with Michael Place of this Division, you would require more information from the XXXXX concerning the frequency of when XXXXX For your further information concerning the meaning of "a regular or continuous basis throughout the period", we are enclosing a copy of our ruling concerning the XXXXX  XXXXX (it may also be found on our ruling database).

Should you have any further questions or require clarification on the above matters, please do not hesitate to contact me at (613) 952-3551.

Donna Harding
Charities and Non-Profit Organizations Unit
Public Service Bodies and Governments Division

encl.