23 October 2000 GST/HST Ruling 28991 - GST Book Rebate

Dear XXXXX:

Thank you for your letter of February 28, 2000, requesting whether School District No. XXXXX is entitled to claim the 100 per cent book rebate for the GST paid on certain cost items described below.

Statement of Facts

Our understanding of the facts is as follows:

1. The School District has leased digital reproduction equipment, "Docutech" from Xerox (including digital software), to be used to print or publish portions of textbooks for use in the classroom. The equipment is to be used exclusively for printing textbook materials.

2. Expenses incurred by the School District to print or publish textbook materials include:

•   Docutech (Xerox) equipment (described above): leased equipment including digital software interface

•   Xerox - cost per page print charges

•   Copyright - cost per page

•   Paper cost - per page

•   Binding, covers, folders, etc.

Ruling Requested

Do the above cost items qualify for a 100 per cent GST rebate? Are there any specific exceptions?

Ruling Given

Based on the facts set out above, we rule that the School District is not entitled to claim a 100 per cent book rebate for the GST paid on the above items.

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 (i.e., the ETA), or to our interpretative policy; and that you have fully described all necessary facts and transaction(s) for which you requested a ruling.

Explanation

In accordance with section 259.1 of the ETA, certain specified persons (e.g., an organization that operates a post-secondary college or post-secondary technical institute, a school authority, a university) are entitled to a 100 per cent rebate for the GST payable in respect of the acquisition or importation, otherwise than for the purpose of sale, of the following categories of items:

(a) a printed book (or update thereof);

(b) an audio recording all or substantially all of which is a spoken reading of a printed book; and

(c) a printed version of religious scripture (bound or unbound).

For purposes of the 100 per cent book rebate, the phrase "printed book" takes on its ordinary meaning subject to specific exclusions set out in subsection 259.1(1) of the ETA. For instance, a printed book does not generally include a magazine or periodical that either is not purchased by subscription or that has more than 5 per cent of its printed space devoted to advertising; nor does it include a newspaper. Also excluded are books designed primarily for writing or drawing on or affixing items, such as clippings, pictures, coins, stamps or stickers. Agendas, calendars, directories and rate books (e.g. insurance rate books) are also excluded.

A complete list of exclusions to the definition of "printed book" can be found in the enclosed Technical Information Bulletin B-076 Proposed Rebate For Printed Books, Audio Recordings of Printed Books, And Printed Versions of Religious Scriptures Under The GST/HST.

The items described in the statement of facts that are purchased by the School District do not fall within any of the categories of items described under (a), (b) or (c) above for which the 100 per cent book rebate is available. However, in accordance with section 259 of the ETA, assuming that the School District is a "school authority" for purposes of the ETA, it will qualify for a 68% school authority rebate in respect of those items.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-0420.

Yours truly,

Lorrie McAnulty
Charities, NPO's and Educational Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate