24 March 2000 GST/HST Interpretation 8316 - Inquiry re: Section 6/Part III/Schedule V Election and Definition of "Vocational School"

Dear XXXXX

This is in reply to inquiries you have made on the above-noted subjects. Specifically, we refer to your facsimile messages of August 12, 1999, and September 23, 1999. Our comments are set out below.

Please note that as of November 1, 1999, Revenue Canada became the Canada Customs and Revenue Agency.

On April 1, 1997, the Harmonized Sales Tax (HST) replaced the Goods and Services Tax (GST) and the provincial sales tax in the three participating provinces of Nova Scotia, New Brunswick and Newfoundland with a harmonized rate of 15%. Supplies of goods and services made in a participating province are subject to tax at the harmonized rate, unless a relieving provision applies. As the supplies about which you are inquiring are being made only in XXXXX, we will address only the GST implications in this ruling.

Interpretation Requested

You are asking about the operation of the election in section 6 of Part III of Schedule V of the Excise Tax Act ("section 6" and "the Act") when another exemption applies. Specifically, you suggest a hypothetical situation where a public college makes a supply of a course in auto mechanics leading to a diploma and such a supply is exempt pursuant to section 7 of Part III of Schedule V ("section 7") of the Act. This supply is also exempt pursuant to section 6 because the course is accepted for professional or trade accreditation or designation by a regulatory body.

However, in your scenario, the public college makes an election in prescribed form, pursuant to section 6. Your question is, under these circumstances, would the exemption in section 7 still apply? Or, put another way, would the election in section 6 override any other exemption that might apply?

Interpretation Given

We would advise you that, in the hypothetical situation that you describe, the supply of the auto mechanics course by the public college would still be exempt under section 7, even though the public college made an election, pursuant to section 6. The purpose of the election in section 6 is to give suppliers the option of not having the exemption under section 6 apply. However, this election does not render other applicable exemptions inoperative. That is, if other exemptions apply, then the supply will still be exempt pursuant to those exemptions, notwithstanding that an election has been made pursuant to section 6.

Interpretation Requested

You asked if one particular school within a school authority would qualify as a vocational school, assuming that the particular school satisfies all requirements of the definition of "vocational school", as set out in section 1 of Part III of Schedule V ("section 1") of the Act. This definition is set out below.

"'vocational school' means an organization that is established and operated primarily to provide students with correspondence courses, or instruction in courses, that develop or enhance a student's occupational skills."

Interpretation Given

We draw your attention to the definition of "person" as set out in subsection 123(1) of the Act. It is set out below.

"'person' means an individual, a partnership, a corporation, the estate of a deceased individual, a trust, or a body that is a society, union, club, association, commission or other organization of any kind."

In response to your question, we would advise that, assuming the particular school is not a separate person, then that school will not meet the definition of "vocational school" in the Act.

We interpret the definition of "vocational school" to apply to an entity that can meet the definition of "person," in its own right.

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, or to departmental 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 (613) 952-9215.

Yours truly,

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