22 May 2003 GST/HST Ruling 44659 - Zero-rated Continuous Journey

Dear XXXXX:

Thank you for your facsimile XXXXX (with attachments), to XXXXX the XXXXX GST/HST Rulings Centre concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to an itinerary that involves two flights supplied by XXXXX XXXXX XXXXX (XXXXX). Your request was transferred to us for response.

Statement of Facts

Our understanding of the facts is as follows:

XXXXX is a regional carrier in XXXXX that is registered for purposes of the GST/HST.

XXXXX XXXXX, doing business as XXXXX XXXXX (XXXXX), is a GST/HST-registered travel agent.

XXXXX has booked the following flights for XXXXX and XXXXX XXXXX (the XXXXX) of XXXXX on XXXXX:

XXXXX to XXXXX XXXXX, XXXXX XXXXX XXXXX to XXXXX has advised you that the XXXXX flights are connecting with other flights that qualify as a zero-rated continuous journey for purposes of the GST/HST.

To reserve flights on XXXXX, XXXXX is required to contact XXXXX directly to request the reservations. XXXXX then books the flights, charges the XXXXX credit card, prints an electronic ticket confirmation and an itinerary and forwards both of these documents to XXXXX.

XXXXX then sends the XXXXX tickets to the XXXXX address in XXXXX.

The above information was obtained from your facsimile XXXXX and an e-mail XXXXX and facsimiles XXXXX from XXXXX XXXXX.

Ruling Requested

What is the tax status of the passenger transportation services in respect of which tickets for XXXXX and XXXXX were issued to the XXXXX?

Ruling Given

Based on the facts set out above, we rule that the passenger transportation services in respect of which tickets for XXXXX and XXXXX were issued to the XXXXX meet the definition of "continuous journey" in subsection 1(1) of Part VII of Schedule VI to the Excise Tax Act (ETA). As such, the passenger transportation services provided by XXXXX to the XXXXX in relation to XXXXX and XXXXX are zero-rated under paragraph 3(c) of Part VII of Schedule VI to the ETA and are subject to the GST at a rate of 0% under subsection 165(3) of the ETA.

This ruling is subject to the general limitations and qualifications outlined in section 1.4 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(s) for which you requested a ruling.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-8806.

Yours truly,

Marjorie Stevens
Services and Intangibles Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate