13 October 2000 General Information Letter 31658 - GENERAL INFORMATION LETTER Self-Assessment of the Harmonized Sales Tax

Dear XXXXX:

Thank you for your letter of June 14, 2000 concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) where XXXXX purchases services in a non-participating province.

In the example provided, XXXXX purchases services from a supplier in a non-participating province and the service is performed 90% or more in the non-participating province. Therefore, pursuant to section 144.1 of the ETA and paragraph 2(a) of Part V of Schedule IX to the ETA, the supply of the service is determined to be made in the non-participating province. Accordingly, the supplier will charge the GST at the rate of 7% in accordance with subsection 165(1) of the ETA.

Under subsection 220.08(1) of the ETA, every person who is a resident in a participating province and is the recipient of a taxable supply made in a non-participating province of a service that is acquired by the person for consumption, use or supply primarily in participating provinces must self-assess tax. The amount of tax will equal the particular province's tax rate multiplied by the value of consideration for the supply multiplied by the extent to which the person acquired the service for consumption, use or supply in the participating province. Based on the example provided, none of the exclusions for self-assessing the tax, as referred to in subsection 220.08(3) and listed in Part II of Schedule X to the ETA, apply. Subsection 220.09(1) then requires registrants to report and remit the tax to the Receiver General for the reporting period in which the tax became payable.

XXXXX Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-0370.

Yours truly,

Brent Fleming
Governments Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate