3 July 2002 GST/HST Interpretation 37229 - Application of the GST to Postage Stamps

Dear XXXXX:

Thank you for your letter of XXXXX, concerning the application of the Goods and Services Tax (GST) to the purchase of postage stamps from the XXXXX. I apologize for the delay in responding to your request.

Interpretation Requested

You indicated that you believe the XXXXX collected GST in error from you on postage stamps that you purchased for your brother in the circumstances described in your letter and that a reimbursement of that tax is therefore available to you.

Interpretation Given

For GST/HST purposes, a postage stamp is generally considered to be a stamp authorized by the XXXXX for use as evidence of the payment of postage, where "postage" is generally considered to mean the charge or surcharge payable for the collection, transmission and delivery by the XXXXX of goods. A freight transportation service for GST/HST purposes generally means a service of transporting tangible personal property and includes a service of delivering mail.

A supply of a freight transportation service is zero-rated under section 6 of Part VII of Schedule VI of the Excise Tax Act (ETA) if it is in respect of the transportation of tangible personal property from a place in Canada to a place outside Canada and the value of the consideration for the supply is $5 or more. The purchase of postage stamps will only qualify for zero-rating on the basis of this provision if the value of the postage is $5 or more and, at the time of purchase, the postage is affixed to mail destined for an address outside Canada and the mail is directly transferred to a XXXXX official. Where this does not occur, GST at a rate of 7% applies to the purchase of the postage stamps. Therefore, based on the information provided, XXXXX correctly collected tax from you on the purchase of the postage stamps and there is no provision in the ETA that would provide for the payment of a refund or rebate to you of that tax.

The foregoing comments represent our general views with respect to the subject matter of your letter. Proposed amendments to the Excise Tax Act, if enacted, could have an effect on the interpretation provided herein. These comments are not rulings and, in accordance with the guidelines set out in section 1.4 of Chapter 1 of the GST/HST Memoranda Series, do not bind the Canada Customs and Revenue Agency with respect to a particular situation.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at your convenience at (613) 952-8810.

Yours truly,

Patrick McKinnon
Manager
Border Issues Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate