Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.
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Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
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Case Number: 47891
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March 15, 2004
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Dear XXXXX
Thank you for your letter XXXXX (with attachments) requesting XXXXX a Goods and Services Tax/Harmonized Sales Tax (GST/HST) interpretation relating to the discounting of Visitor GST/HST Rebates XXXXX.
Background
The following is our understanding:
1. XXXXX XXXXX (the discounter) is in the business of supplying services to non-resident visitors to Canada (the visitor) in connection with the visitors rebate (the rebate) provided under the authority of section 252 of the Excise Tax Act (ETA).
2. The discounter assists the visitor in obtaining the rebate from the Canada Revenue Agency (CRA). The rebate is provided either prior to the visitor's departure from Canada (i.e., the Instant Rebate Service) or after the discounter receives the rebate from the CRA (i.e., the Mail-In Rebate Service).
3. Whether using the Instant Rebate Service or the Mail-In Rebate Service, the visitor must complete the Discounter's Refund Agreement (the agreement) containing a Power of Attorney (the POA).
4. The agreement provides that the visitor authorizes the discounter to claim and receive, on the visitors behalf, the rebate that is or becomes payable to the visitor. A condition to this authorization is that the discounter will calculate the claimed rebate based on the information provided by the visitor and that the discounter will pay to the visitor a sum equal to the claimed rebate less XXXXX service fee XXXXX.
5. XXXXX
(a) XXXXX
(b) XXXXX
(c) XXXXX
(d) XXXXX
6. The Instant Rebate Service can be summarized as follows:
The discounter prepares the application on behalf of the visitor and pays (in cash, credit to a credit card or by cheque) an amount equal to the estimated rebate less the service fee. These payments are made in the currency of the visitor's choice. The discounter then submits the application, along with a copy of the agreement, to the CRA on behalf of the visitor. The CRA sends the rebate cheque XXXXX deposited into the discounter's bank account. The deposit is converted to Canadian currency and applied against the advance made to the visitor.
7. The Mail-In Rebate Service can be summarized as follows:
The visitor mails the application with all supporting documentation to the discounter. The discounter prepares and submits the application, along with a copy of the agreement, to the CRA on behalf of the Visitor. The CRA sends the rebate cheque XXXXX. The rebate cheque is deposited into the discounter's bank account. Only after being deposited into the discounter's bank account is payment of an amount equal to the rebate less the service fee made to the visitor (by credit to a credit card or by cheque). These payments are made in the currency of the visitor's choice.
Interpretation Requested
1. The Instant Rebate service is a financial service within the meaning of that term in section 123 of the ETA?
2. The Mail-In Rebate service is a financial service within the meaning of that term in section 123 of the ETA?
Interpretation Given
Based on the information provided,
1. The Instant Rebate service is a financial service within the meaning of that term in section 123 of the ETA.
2. The Mail-In Rebate service is not a financial service within the meaning of that term in section 123 of the ETA. The Mail-In Rebate service is supply of a service that is made in the course of a commercial activity and subject to GST/HST.
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)-954-7945 or Duncan Jones at (613)-952-9210.
Yours truly,
Susan Mills
Specialty Tax Unit
Financial Institutions and Real Property Division
Excise and GST/HST Rulings Directorate
Legislative References: |
252, 123(1) Definition of "financial service", Financial Services Regulations |
NCS Subject Code(s): |
I-11685-3, 11720-1 |