19 July 2002 GST/HST Ruling 39947 - Eligibility for a Rebate on Printed Books Under Section 259.1 of the ETA

Dear XXXXX:

Thank you for your letter of XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to your purchases of printed books and other religious material. We apologize for the delay in responding.

Statement of Facts

According to your letter, a telephone conversation with XXXXX on XXXXX and additional information submitted our understanding of the facts is as follows:

The XXXXX ("Church") is a registered charity as defined by the Income Tax Act and is not registered for the Goods and Services Tax.

The Church maintains a collection of various printed books, religious materials, video and audio tapes within its' building. The collection consists of approximately XXXXX books and XXXXX videos and recordings. The library is open during regular hours (8:30 am to 5 pm) Monday to Friday and on Sundays. The library is used primarily by members of the Church and it is open to the public for their use.

The various printed materials and tapes purchased for the Church library are not for resale. All items are catalogued with a reference index and are signed out for a specified period of time. A follow up system is in place for overdue returns.

There is a budget for the purchase of new printed material for the Church.

Ruling Requested

Is the Church eligible for a rebate of 100% of the GST paid on the purchase of printed materials, videos and audio tapes?

Ruling Given

Based on the facts set out above, we rule that the Church is eligible for the rebate of 100% of the GST paid on the purchase of certain printed books, audio recordings of printed books and printed versions of religious scriptures as outlined in section 259.1 of the Excise Tax Act (ETA).

Video tapes do not qualify under the provisions of section 259.1. Therefore, the Church would not be entitled to a 100% rebate of the GST paid on the purchase of video tapes.

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.

Explanation

Section 259.1 of the ETA provides for a rebate of 100% of the GST paid by a specified person in respect of the purchase of certain printed books and scripture that are acquired for purposes other than resale.

A charity that operates a public lending library is considered to be a "specified person" pursuant to paragraph 259.1(e) and is eligible to claim a rebate of 100% of the GST paid on qualifying books and other material acquired other than for resale.

For purposes of the rebate, "charity" has the meaning assigned to it under subsection 123(1) of the ETA, that is, a registered charity or a registered Canadian amateur athletic association within the meaning of subsection 248(1) of the Income Tax Act but not including a public institution.

As outlined in Technical Interpretation Bulletin entitled Proposed Rebate for Printed Books, Audio Recordings of Printed Books and Printed Versions of Religious Scriptures under the GST/HST (TIB B-076), a copy of which is enclosed, "a public lending library for purposes of this rebate is interpreted to mean a place where a collection of documents and other items such as films and recordings are kept and maintained and which is open to the public for their use. It includes libraries from which these documents and other items can be borrowed, as well as those libraries accessible to the public for research purposes only".

The rebate provision for printed material, pursuant to subsection 259.1(2) of the ETA, is for the GST paid on the purchase of:

"... (a) a printed book or an update of such a book,

(b) an audio recording all or substantially all of which is a spoken reading of a printed book, or

(c) a bound or unbound printed version of scripture of any religion, ..."

A further explanation of the terms printed book, audio recording and scripture is contained in the Policy Bulletin B-076.

Enclosed is a copy of form GST66(00), Application for GST/HST Public Service Bodies' Rebate and GST Self-Government Refund, which you may use to file for the rebate. Please note that the claim must be filed within four years after the end of the claim period in which the GST became payable.

In addition to the rebate for printed books referred to above, pursuant to section 259 of the ETA, a charity may apply for a 50% rebate of the GST they paid out on eligible purchases and expenses. Please find enclosed, the GST/HST guide, Public Services Bodies' Rebate, which contains detailed information on rebates.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at 613-954-3158.

Yours truly,

Debra Murphy
Charities, Non-Profit Organizations and Educational Services Unit
Public Service Bodies and Government Division
Excise and GST/HST Rulings Directorate

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