28 March 2002 GST/HST Ruling 33377 - Status as School Authority and Eligibility to Claim Book Rebate

Dear XXXXX:

Thank you for your letter of November 6, 2000 (with attachments), concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the transaction described below. We apologize for the delay in our response.

Statement of Facts

Our understanding of the facts, the transactions, and the purpose of the transactions is as follows:

•   XXXXX (the Council) is a registered charity for purposes of subsection 248(1) of the Income Tax Act, and therefore a charity for purposes of the Excise Tax Act (the ETA). It is located in XXXXX.

•   The Council was incorporated on XXXXX under the XXXXX[.]

•   The Council is currently not a GST/HST registrant, but has been filing for the public service body (PSB) rebate as a school authority.

XXXXX.

XXXXX

Ruling Requested

1. Does the Council qualify as a school authority for purposes of the ETA and for claiming PSB rebates?

2. Does the Council qualify for a rebate of 100% of the GST or the federal portion of the HST paid or payable on the acquisition or importation of a printed book?

Ruling Given

Based on the facts set out above, we rule that the Council does not qualify as a school authority for purposes of the ETA or the PSB rebate.

Based on the facts set out above, we rule the Council qualifies for a rebate of 100% of the GST or the federal portion of the HST paid or payable on the acquisition or importation of a printed book.

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 ETA, or to our interpretative policy; and that you have fully described all necessary facts and transaction for which you requested a ruling.

Explanation

A "school authority" is defined in subsection 123(1) of the ETA as 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.

The Council does not provide instruction at the elementary or secondary school level. As a result, the Council does not meet the definition of school authority for purposes of the ETA.

Accordingly, the Council is not eligible for the 68% PSB rebate of the non-creditable tax charged available to school authorities.

The Council is further not eligible to claim the PSB rebate available to universities and to public colleges (that are established and operated otherwise than for profit), as it does not meet the definition of a university nor a public college under the ETA.

A "university" is defined in subsection 123(1) of the ETA as a recognized degree-granting institution or an organization that operates a college affiliated with, or a research body of, such an institution. The Council is not a degree-granting institution nor is it affiliated to one.

A "public college" is defined in subsection 123(1) of the ETA as an organization that operates a post-secondary college or post-secondary technical institute

(a) that receives from a government or a municipality funds that are paid for the purpose of assisting the organization in the ongoing provision of educational services to the general public, and

(b) the primary purpose of which is to provide programs of instruction in one or more fields of vocational, technical or general education.

The Council is not established and operated pursuant to the relevant federal or provincial legislation governing the establishment of colleges nor is it recognized as one.

Please find enclosed policy papers P-220 Domestic Entities That Qualify As a "University" in the Excise Tax Act ("ETA") and P-186R Funding For Public Colleges. Please refer to these publications for more information on the meaning of "university" and "public college" for purposes of the ETA.

However, the Council is eligible for a PSB rebate of 50% of the non-creditable tax charged available to charities.

This ruling is applicable to rebate claims for non-creditable tax charged in respect of property or services acquired by the Council on or after XXXXX. This means that the Council will no longer be able to claim a PSB rebate XXXXX for non-creditable tax paid in respect of property or services acquired on or after XXXXX, but a PSB rebate of 50%. Should you provide new information or make representations in respect of this decision, we would be pleased to reconsider this ruling.

A rebate of 100% of the GST or the federal portion of the HST paid or payable on the acquisition or importation of a printed book is available under section 259.1 of the ETA. Only a person, who is a specified person on the last day of a claim period of the person or of the person's fiscal year that includes that claim period, qualifies for the rebate.

A "specified person" includes a charity that operates a public lending library. 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.

As the Council operates a public lending library it qualifies for a rebate of 100% of the GST or the federal portion of the HST paid or payable on the acquisition or importation of a printed book.

Qualifying book rebates will be paid if the rebate claim is submitted within four years after the end of the claim period of the person in which the GST or the federal portion of the HST became payable. The definition "claim period" currently used for the purpose of claiming PSB rebates also applies for the purposes of section 259.1. The rebate should be claimed on line 307 of form GST 66 Goods and Services Tax Rebate Application for Public Service Bodies.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 954-4206.

Yours truly,

Carol A. Gaudet
Charities, Non-Profit Organizations and Educational Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate