2 February 2000 GST/HST Ruling 1504 - Eligibility for Section 259 Rebate

Dear XXXXX

This is in reply to your letter of November 16, 1998, to XXXXX concerning the above-noted subject. Your inquiry was forwarded to our office for reply. 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 (PST) in the three participating provinces of Nova Scotia, New Brunswick and Newfoundland with a harmonized rate of 15%. It is our understanding that, in this case, no supplies are made in the participating provinces, and, for this reason, our response will address only the GST.

Statement of Facts

Our understanding of the facts, based on the documentation submitted, is set out below.

1. XXXXX is a technical career education center providing technical education to secondary and post-secondary students. It was established in XXXXX pursuant to the XXXXX XXXXX[.]

2. XXXXX[.]

3. XXXXX uses an approved XXXXX secondary school curriculum. It is funded by school taxes levied by the XXXXX school divisions.

4. XXXXX serves secondary students from the XXXXX participating school divisions and also provides instruction to post-secondary students. Secondary students generally spend half days at XXXXX and the other half at their home high school. Post-secondary students attend classes either full-time or part-time, depending on their individual training plans.

5. The XXXXX is not formally recognized as a post-secondary institution by the XXXXX[.]

6. XXXXX is operated on a non-profit basis. It is registered for GST purposes with GST XXXXX[.]

Ruling Requested

Does the XXXXX qualify as a "school authority" pursuant to the definition in subsection 123(1) of the Excise Tax Act ("the Act")? If so, would it then be eligible to claim a rebate as a "school authority", pursuant to section 259 of the Act?

Ruling Given

Based on the facts set out above, we rule that XXXXX qualifies as a "school authority", pursuant to subsection 123(1). XXXXX also qualifies as a "selected public service body", pursuant to subsection 259(1) of the Act. Therefore, XXXXX is entitled to file a rebate claim as a "school authority", pursuant to subsection 259(3) of the Act.

Analysis

School Authority

The definition of "school authority", as set out in subsection 123(1), is as follows:

"'school authority' means an organization that operates an elementary or secondary school in which it provides instruction that meets the standards of educational instruction established by the government of the province in which the school is operated."

XXXXX qualifies as a "school authority" since it is established pursuant to the XXXXX [i]s a school division and it operates a secondary school which teaches a provincially approved school curriculum.

Rebate Entitlement

Section 259 provides a rebate to specified claimants for non-creditable GST charged to them on purchases that are generally related to making exempt supplies.

Subsection 259(1) defines one group of claimants, which is the "selected public service body". This group includes "a school authority that is established and operated otherwise than for profit". XXXXX qualifies as a "school authority" and as a "selected public service body". Therefore, XXXXX should be claiming rebates at the rate for a "school authority", which is 68%. (We were advised that this registrant currently claims the rebate at the rate prescribed for public colleges, which is 67%. XXXXX does not qualify as a "public college", as defined in subsection 123(1) of the Excise Tax Act, and so should not be claiming the rebate at that rate. The definition of "public college" requires that a qualifying college receive government or municipal funding which is in the nature of operating subsidies. XXXXX receives no such funding and, as such, does not qualify as a "public college".)

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 our interpretative policy; and that you have fully described all necessary facts and transaction(s) 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
Excise and GST/HST Rulings and Interpretations Directorate