19 December 2002 GST/HST Interpretation 34786 - Entitlement of to PSB Rebate

Dear XXXXX:

Thank you for your letter of XXXXX requesting a review of our previous decision concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the daily rate amounts paid to XXXXX by the XXXXX. We apologize for the delay in responding to your request.

In our previous ruling dated XXXXX we indicated the XXXXX would not be entitled to a Public Service Body (PSB) rebate in respect of the XXXXX rate paid by them directly to XXXXX. This decision is based on the information available which indicates that the XXXXX rate be spent on items including lodging, food, local transit and respite care. We determined that these supplies would not be all or substantially all taxable supplies (other than zero-rated supplies) which is one of the conditions the XXXXX has to meet in order to be deemed to have received the supplies and paid the tax under section 174 of the Excise Tax Act (ETA).

In your request for review you suggest that the supplies being purchased by the XXXXX are all or substantially all subject to GST (other than zero-rated supplies). You indicate that not all transit services provided by municipalities are exempt XXXXX.

As described by the XXXXX, the XXXXX rate is intended to cover expenses related to XXXXX on daily living established by provincial and federal authorities. When considering the types of expenses the rate is intended to cover, we cannot conclude that these would be all or substantially all taxable supplies (other than zero-rated supplies). Accordingly, we are maintaining our previous position.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-0420.

Yours truly,

Debra Murphy
Charities, NPO & Educational Services Unit
Public Service Bodies & Governments Division
Excise and GST/HST Rulings Directorate