CRA indicates that it generally will not make a designation of a municipality under the ETA retroactive to the extent this changes the tax status of supplies already made
A registered charity (Corporation A) which has been making exempt supplies of accommodation to residents of housing sites and long-term care facilities as well as providing housing management services to the Province and to Corporation B regarding units owned by them has applied to be designated as a municipality for GST/HST purposes.
CRA noted that such change in status (although generating enhanced rebates for non-creditable expenses) would cause some of the supplies made by Corporation A to cease to be exempted by virtue of the exclusion in Sched. V, Pt. VI, s. 2(n), for example, the supplies of its management services, and the optional supplies of laundry and cable services. CRA then stated:
Retroactive determinations will generally not be granted where the retroactive determination would change the tax status of supplies that have already been made. The effects of a municipal determination discussed herein would only apply as of the effective date of the municipal determination.