24 October 2003 GST/HST Interpretation 44667 - Rebate on Printed Books Under Section 259.1 of the Excise Tax Act

Dear XXXXX:

Thank you for your letter XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to printed material for purposes of the 100% rebate of the GST under section 259.1 of the Excise Tax Act (ETA).

As you outlined, the XXXXX is an educational service organization representing approximately XXXXX schools in XXXXX. A school representative recently questioned whether sheet music qualifies for the 100% rebate of GST for printed books.

Interpretation Requested

Is sheet music considered to be a "printed book" for purposes of the 100% rebate of the GST under section 259.1 of the ETA?

Interpretation Given

We are unable to issue a ruling with regard to your general enquiry as rulings can only be issued with regard to a clearly defined fact situation of a particular person. However, we are pleased to provide you with the following interpretation of the relevant provisions of the ETA.

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 school authority is regarded as a "specified person" for purposes of the book rebate. A school authority, as defined under subsection 123(1) of the ETA, "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".

The term "printed book" takes on the ordinary meaning subject to specific exclusions set out in subsection 259.1(1) of the ETA, such as newspapers, a brochure or pamphlet, books designed primarily for writing on, etc. The GST/HST Memorandum 13.4, Rebates for Printed Books, Audio Recordings of Printed Books, and Printed Versions of Religious Scriptures outlines the exclusions in more detail and is included for your reference.

Sheet music is not specifically listed as being excluded from the definition of printed book under subsection 259.1(1) of the ETA. You suggest that this factor, the point that sheet music is used like a textbook in the classroom and that it is often kept in a library indicate it is a printed book for purposes of the rebate.

The common dictionary definition indicates a book consists of a number of printed sheets that are fastened together in some way. It may contain printed words, printed pictures, diagrams and other visual aids including Braille and music. The usage and the placement of printed material would not change the physical identity of the good.

"Printed sheet music", as the term is ordinarily understood, is music published on single sheets of paper that are often folded or interleaved. Sheets of paper, not bound or fastened, are not considered to be a printed book for purposes of section 259.1 of the ETA, unless they are unbound versions of scripture of any religion.

As you may be aware, subsection 259(3) of the ETA provides for a rebate of the GST/HST paid on the purchase of certain goods and services by selected public service bodies. School authorities established and operated on a non-profit basis may be eligible for the rebate at the rate of 68% of the non-creditable tax charged. Accordingly, if a qualifying school authority is not eligible for the 100% printed book rebate, they may look to the provisions under subsection 259(3) of the ETA for recovery of a portion of the GST/HST paid. Enclosed is the GST/HST guide, Public Service Bodies' Rebate, which contains more detailed information on this rebate provision.

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 613-952-0420.

Yours truly,

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