7 September 2000 GST/HST Ruling 26962 - Conference Sponsored by the

Dear XXXXX:

Thank you for your letter of February 8, 2000, concerning the application of the Goods and Services Tax ("GST")/Harmonized Sales Tax ("HST") to the various supplies made by the XXXXX during a conference which it hosts. Our comments are set out below.

Statement of Facts

Our understanding of the facts, based on the documents you have submitted, is set out below.

1. XXXXX is a national voluntary organization which facilitates and supports XXXXX and development activities around the world. XXXXX advocates for XXXXX policy and programming which contributes to global objectives of XXXXX through building partnerships with Canadian and other institutions or organizations. XXXXX is a registered charity under the Income Tax Act. Accordingly, it qualifies as a "charity", pursuant to the definition in subsection 123(1) of the Excise Tax Act. XXXXX has been assigned Business Number XXXXX by the Canada Customs and Revenue Agency.

2. XXXXX members include XXXXX XXXXX and other professionals in fields related to international XXXXX[.]

3. XXXXX activities include the following:

•   lobbies policy and decision-makers for XXXXX to be an integral part of Canada's development activities;

•   supports student/young professional international XXXXX initiatives and interests;

•   offers and supports professional development events, such as the XXXXX Conference XXXXX;

•   develops XXXXX information for Canadian travelers;

•   implements technical cooperation programs;

•   promotes Canadian academic community involvement in XXXXX; and

•   undertakes special assignments such as the first exploratory workshop in the Americas on the XXXXX.

4. XXXXX is funded by grants from such organizations as the World Health Organization, the World Bank and CIDA. XXXXX only revenue generating activity is from fees earned at its conferences.

5. XXXXX will hold the 2000 XXXXX Conference XXXXX ("the Conference") in the fall of 2000 XXXXX. The Conference is open to XXXXX members and non-members. It is estimated that about 20% of participants will be non-residents, either from the U.S. or developing countries. Participants at the conference may register for the full four days or just register for daily sessions. XXXXX members are eligible for reduced registration fees, no matter which option they choose. All registrants receive an admission to the Conference; a Conference program and abstracts; admission to an opening reception; and a complimentary lunch on two days of the Conference.

6. There are several optional events which participants may or may not attend, at their own discretion. These events are available for an additional charge and include a working breakfast and an international night dinner. (For the optional events, there is no difference in the fee paid by members or non-members. Students, however, may attend these events for a reduced fee.)

7. During the Conference, XXXXX invites various commercial organizations and non-governmental organizations ("the exhibitors") to participate in the Conference by setting up booths displaying information on their own organizations and activities. For example, the XXXXX may set up a display of one of its projects, the XXXXX. From the space it has rented at the Conference site in the XXXXX, XXXXX supplies space (and a certain number of tables and chairs) to each exhibitor for a fee.

Rulings Requested

What is the tax status of the following supplies:

•   supplies made in return for the conference registration fee;

•   supplies of optional events; and

•   supplies made to exhibitors.

Rulings Given

Based on the facts set out above, we are providing the rulings set out below.

Ruling No. 1 - Supplies Received for Registration Fee

For their registration fee, Conference participants receive admission to the Conference, a Conference program and abstracts, admission to an opening reception and complimentary lunch on two days of the Conference. This is a single supply of personal property made for the consideration of the registration fee. This supply is exempt from GST pursuant to the exemption in section 1 of Part V.1 of Schedule V to the Excise Tax Act ("the Act"). Therefore, XXXXX should not charge GST on the registration fee for the Conference.

Ruling No. 2 - Supplies of Optional Events

Conference participants may purchase tickets to optional events such as a working breakfast and an international night dinner. The working breakfast is a single supply of personal property made for the consideration paid for the ticket. This supply is exempt pursuant to the exemption in section 1 of Part V.1. Therefore, XXXXX should not charge GST on the supply of the working breakfast.

The supply of a ticket to the international night dinner is not exempt under section 1 of Part V.1 because it is within the exclusion to the exemption in paragraph (e) of section 1, being an admission to a "place of amusement". Therefore, XXXXX must charge GST on tickets to the international night dinner.

Ruling No. 3 - Supplies made to Exhibitors

As set out in the facts, XXXXX supplies booth space (real property) to Conference exhibitors for a fee. XXXXX will also supply tables and chairs (personal property), up to a certain limit, if required by these exhibitors. Based on our understanding that the Conference's primary objective is to supply the booth space, and that the provision of the tables and chairs does not materially affect the amount of consideration charged, it is our position that the supply of the tables and chairs is incidental to the supply of the real property, pursuant to section 138 of the Act. This supply of real property is exempt pursuant to the exemption in section 1 of Part V.1. Therefore, XXXXX should not charge GST on this supply made to exhibitors.

Analysis

Legislation

Section 1 of Part V.1 of Schedule V to the Act provides a general exemption for all supplies of property or services made by a charity, with certain specified exclusions. One of these "exclusions" from the exemption falls under paragraph 1(e); i.e. "an admission in respect of a "place of amusement" unless the maximum consideration for a supply by the charity of such an admission does not exceed one dollar."

Subsection 123(1) contains definitions of key terms which appear in section 1 and these follow.

'property' means any property, whether real or personal, moveable or immovable,

tangible or intangible, corporeal or incorporeal, and includes a right or interest of any kind, a share and a chose in action, but does not include money.

'service' means anything other than

(a) property,

(b) money, and

(c) anything that is supplied to an employer by a person who is or agrees to become an employee of the employer in the course of or in relation tothe office or employment of that person.

'place of amusement' means any premises or place, whether or not enclosed, at or in any part of which is staged or held any

(a) film, slide show, sound and light or similar presentation,

(b) artistic, literary, theatrical, musical or other performance,entertainment or exhibition,

(c) fair, circus, menagerie, rodeo or similar event, or

(d) race, game of chance, athletic contest, or other contest or game, and includes a museum, historical site, zoo, wildlife or other park, place where bets are placed and any place, structure, apparatus, machine or device the purpose of which is to provide any type of amusement or recreation.

"138. Incidental supplies - For the purposes of this Part, where(a) a particular property or service is supplied together with any other property or service, and(b) it may reasonably be regarded that the provision of the otherproperty or service is incidental to the provision of the particular property or service, the other property or service shall be deemed to form part of the particular property or service so supplied."

Ruling No. 1 - Supplies Made for the Registration Fee

For the registration fee, conference participants receive intangible personal property (admission to the Conference and the opening reception) and tangible personal property (the Conference program, the abstracts for the Conference presentations and the complimentary lunch). We consider these to be elements of a single supply of personal property since each of the above elements on its own would not be of much use to the recipient, and since the usefulness of all the elements is contingent upon the receipt of the others.

For example, the usefulness of the Conference program and abstracts are contingent upon admission to the Conference. Because XXXXX is a charity, the general exemption in section 1 of Part V.1 applies to this supply and no exclusion to the exemption applies. Therefore, XXXXX should not charge GST on this supply.

Ruling No. 2 - Supplies of Optional Events

The supply of tickets to the working breakfast is a single supply of personal property. The general exemption in section 1 applies to this supply and, since no exclusion to the exemption applies to it, XXXXX should not charge GST on tickets to this event.

The supply of the admission to the international night dinner falls within the exclusion to the general exemption in paragraph 1(e), being an admission to a "place of amusement" for an amount in excess of one dollar. Therefore, XXXXX must charge GST on tickets to this event.

Ruling No. 3 - Supplies made to Exhibitors

Section 138 of the Act provides, in summary, that where there is a single consideration for two (or more) supplies, and one supply is incidental to the other "particular" supply, that one supply is deemed to "form part of" the particular supply. Under our policy, we consider a supply to be incidental to a particular supply if the supplier's primary objective is to provide the particular supply, and if the consideration would be the same or only marginally different if only the particular supply were made.

Although the facts concerning the supply of the space in question are limited, it does appear that the supply of the tables and chairs are quite incidental to the supply of the exhibit space under this criteria. On this basis, we find the supply, including the tables and chairs, to be one of booth space. Since there is no apparent exclusion to the general exemption under section 1 of Part V.1, this supply is exempt under this section.

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 future to the Excise Tax Act, or to our interpretative policy; and that you have fully described all necessary facts 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 952-9215.

Yours truly,

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