29 January 2004 GST/HST Ruling 49283 - GST/HST Book Rebate

Please note that the following documents, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ces documents, bien qu'exacts au moment émis, peuvent ne pas représenter la position actuelle de l'Agence.

Dear Sir/Madam:

Thank you for your letter XXXXX (with attachments), concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the transaction(s) described below.

Statement of Facts

Our understanding of the facts, the transaction(s), and the purpose of the transaction(s) is as follows:

The XXXXX is a registered charity as defined by the Income Tax Act, and is therefore a charity for purposes of the Excise Tax Act (the ETA).

The XXXXX is not registered for the GST/HST.

The XXXXX maintains a Lending Library/Resource Centre which consists of various printed books within its building.

Clients of the XXXXX and the general public are able to borrow the books from the Lending Library/Resource Centre. Borrowers must sign the books out and are permitted to borrow the books for a period of up to five days.

Ruling Requested

Is the XXXXX eligible for a rebate of 100% of the GST or the federal component of the HST paid on the purchase of printed materials, videos and audio tapes?

Ruling Given

Based on the facts set out above, we rule that the XXXXX is eligible for the rebate of 100% of the GST or the federal component of the HST paid on the purchase of printed books, audio recordings of printed books and printed versions of religious scriptures that are acquired for purposes other than resale as outlined in section 259.1 of the ETA.

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 ETA, 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 or the federal component of the HST 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.

As outlined in paragraph 5 of GST/HST Memoranda Series 13.4 Rebates for Printed Books, Audio Recordings of Printed Books, and Printed Versions of Religious Scriptures, a copy of which is enclosed, "a public lending library is interpreted to mean a place where a collection of documents and other items such as films and recordings are kept and maintained and that is open to the public for its use. It includes libraries from which these documents and other items can be borrowed, as well as libraries accessible to the public for research purposes only."

An explanation of the terms printed book, audio recording and scripture is contained in the enclosed Memoranda.

Please note that there is no federal book rebate of GST or the federal component of the HST paid or payable on the acquisition or importation of printed books that are acquired to be given away free of charge.

In addition to the rebate for printed books referred to above, pursuant to section 259 of the ETA, a charity may apply for a Public Service Body (PSB) rebate of 50% the GST they paid out on eligible purchases and expenses. Please find enclosed, the GST/HST guide RC4034(E), GST/HST Public Service Bodies' Rebate, which contains detailed information on rebates. Enclosed in the guide is a copy of form GST66, Application for GST/HST Public Service Bodies' Rebate and GST Self-Government Refund, which you may use to file for the book rebate and the PSB rebate. Please note that the rebates must be filed within four years after the end of the claim period in which the GST/HST was paid or became payable.

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