1 September 2000 GST/HST Interpretation 31950 - Meaning of "An Establishment Operated by the Supplier"

Dear XXXXX:

This is in response to your telephone conversation of July 10, 2000, with Michael Place of this office concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to payments made by the XXXXX (the Society) to outside sources.

Following our interpretation letter issued to you on June 27, 2000, you have requested that we clarify the interpretation given to the phrase "an establishment operated by the supplier." According to the interpretation letter, "a service provided to the Society by an outside source which owns and operates a group home is exempt under section 2 of Part IV of Schedule V to the ETA." You pointed out that the Society has several group homes where the operators rent the facility and inquired as to whether a rented facility also qualified as "an establishment operated by the supplier" (i.e., whether "owns" included "owns or rents").

This will confirm that whether an operator owns or rents a group home, the facility qualifies as "an establishment operated by the supplier." That is, it is our view that the provision recognizes that an "establishment operated by the supplier" may be an establishment that is either owned or leased by the supplier.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 954-4206.

Yours truly,

Hélène McGraw
Charities, NPOs, and Educational Services Unit
Division
Excise and GST/HST Rulings Directorate