Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
GST/HST Rulings Directorate
5th floor, Tower A, Place de Ville
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 247341
Business Number: […]
[Dear Client]:
Subject: GST/HST ruling
Delivery services provided through […][the Platform]
Thank you for your correspondence of [mm/dd/yyyy], concerning the application of the goods and services tax/harmonized sales tax (GST/HST) to delivery services provided through […][the Platform]. […]
The HST applies in the participating provinces at the following rates: 13% in Ontario; and 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island. The GST applies in the rest of Canada at the rate of 5%.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
STATEMENT OF FACTS
We understand the following:
1. The relevant provisions of the […][Platform Terms] version last modified [mm/dd/yyyy], include:
[…]:
[…][The Platform Terms govern a consumer’s access and use of the Platform](Footnote 1)
[…][If a consumer requests delivery services through the Platform the Delivery Terms will also apply]
[…][The Delivery Terms is a separate agreement between a consumer and the Platform]
[…]
2. The relevant provisions of the […][Delivery Terms] version last modified [mm/dd/yyyy], include:
[…]:
[…][The Delivery Terms apply when consumer requests a delivery service through the Platform]
[…][The Platform Terms apply to the consumer’s access and use of the Platform].
[…]:
[…][The Delivery Terms govern a consumer’s use of delivery services sold by the Platform](Footnote 2)
[…][The Delivery Terms do not apply if a consumer orders from a merchant that uses its own delivery staff]
[…]:
[…][The merchant is responsible for the goods]
[…][A consumer may use the Platform to order goods and request delivery services]
[…][Information on options that do not include delivery services]
[…][The Platform charges the consumer for delivery services]
[…]:
[…][Information on Platform and merchant charges]
[…][The consumer is required to pay the Platform for the delivery service]
[…][Information on canceling an order]
[…][Issues with delivery services must be addressed with the Platform. The Platform may provide refunds for delivery services].
[…]:
[…][The Platform limits its liability for the delivery service to the consumer to the amount paid by the consumer for that service]
[…]
3. The relevant provisions of the […] (Agreement) version [mm/dd/yyyy], include:
[…]:
[…][The Agreement applies to delivery driver’s use of the Platform].
[…][The Platform purchases delivery services from the delivery driver and resells it to consumers]. […][The delivery driver may receive instructions about the delivery service from the merchant or consumer].
[…][The Agreement is between a delivery driver and the Platform](Footnote 3).
[…]
[…][The Platform has agreements with merchant and consumer to provide a delivery service. The delivery driver provides its services to the Platform, which the Platform provides to consumers or merchants]
[…][Information on relationship between a delivery driver and the Platform]
[…]
[…]:
[…][Definitions]
4. […][Information on the Platform webpage about refunds to consumers. The merchant is not responsible for refunds the Platform provides to consumers that are related to delivery services]
RULING REQUESTED
You would like to know the tax status of your […][delivery services] provided through [the Platform].
RULING GIVEN
Based on the facts set out above, we rule that:
[…], the [delivery services] you provide to [the Platform] […][are] a zero-rated supply of a freight transportation service, pursuant to subsection 1(2) and section 11 of Part VII of Schedule VI.
EXPLANATION
According to the [Delivery Terms] the consumer is advised that they may place orders for […][goods] and request [delivery services] using [the Platform].
The consumer can place orders via […][the Platform] that do not require [delivery services][…]. […][The Platform Terms apply] to the sale and purchase of any [goods] or delivery services provided by a merchant to a consumer.
If a consumer chooses [delivery services], [the Platform] will request and arrange for a […][delivery driver] to undertake the [delivery services] and will charge the consumer directly for the [delivery services].
For the [delivery services] provided to the consumer, [the Platform] limits its liability to the amount paid by the consumer for that service.
The […] webpage for merchants confirms that merchants are not responsible for refunds provided to consumers that are for [delivery services] provided by [delivery drivers]. [The Platform] is assuming liability.
The Agreement indicates that […][the Platform enters] into separate agreements with merchants and consumers to provide deliveries of [goods]. Under the Agreement, the [delivery driver] agrees to sell [delivery services] to [the Platform] which [the Platform] resells to consumers or merchants, as the case may be.
Regardless of whom [the Platform] resells the [delivery services] to, the Agreement is clear that [the Platform] is the recipient of the [delivery driver’s] services.
Delivery Service
Interlining is the process whereby several carriers take part in the supply of a freight transportation service during the course of a continuous freight movement from the origin of the freight movement to its destination, but only one carrier invoices the shipper or the consignee.
Section 11 of Part VII of Schedule VI zero-rates:
"A supply of a freight transportation service made by a carrier of the property being transported to a second carrier of the property being transported, where the service is part of a continuous freight movement and the second carrier is neither the shipper nor the consignee of the property being transported".
"Carrier" is defined in subsection 123(1) as the person who supplies a freight transportation service. For a person to be considered a "carrier", the person need only assume liability as a supplier of a freight transportation service.
"Continuous freight movement" is defined in subsection 1(1) of Part VII of Schedule VI as the transportation of tangible personal property by one or more carriers to a destination specified by the shipper of the property, where all freight transportation services supplied by the carriers are supplied as a consequence of instructions given by the shipper of the property.
Based on the facts provided, for [delivery services], a merchant (shipper) and a consumer (consignee) contracts with [the Platform] for the delivery of goods received from the shipper’s premises to the consignee. [The Platform] is the carrier that invoices and receives payment from the consignee or shipper and subcontracts the performance of the work to [delivery drivers] (another carrier) such as yourself.
Under subsection 225(1), all amounts that became collectible and all other amounts collected by you in a particular reporting period as or on account of GST/HST, are required to be included in determining your net tax for the particular reporting period. Thus, where an amount of GST/HST was collected by you on the delivery services in a particular reporting period, then you must include the full amount of that tax in determining your net tax for that reporting period.
You may refund or credit the amount as or on account of tax within two years after the day the amount was charged or collected to the recipient pursuant to section 232, provided all the conditions of the provision are satisfied. For more information, refer to GST/HST Memorandum 12.2, Refund, Adjustment, or Credit of the GST/HST under Section 232 of the Excise Tax Act.
Where a refund or credit is not issued by the supplier, the person who has paid an amount as GST/HST on supplies that qualify as a zero-rated supply may make an application to the Canada Revenue Agency for a rebate of tax paid in error under section 261 using Form GST189, General Application for Rebate of GST/HST.
DISCLAIMER
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1-4, Excise and GST/HST Rulings and Interpretations Service, the Canada Revenue Agency (CRA) is bound by the ruling(s) given in this letter provided that: none of the issues discussed in the ruling(s) are currently under audit, objection, or appeal; no future changes to the ETA, regulations or the CRA’s interpretative policy affect its validity; and all relevant facts and transactions have been fully and accurately disclosed. The interpretation(s) given in this letter, including any additional information, is not a ruling and does not bind the Canada Revenue Agency (CRA) with respect to a particular situation. Future changes to the ETA, regulations, or the CRA’s interpretative policy could affect the interpretation(s) or the additional information provided herein.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 343-553-3972.
Should you have additional questions on the interpretation and application of the GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287 or by fax to 1-418-566-0319.
Sincerely,
David Phoenix, CPA, CGA
Industry Sector Specialist
Services and Intangibles Unit
General Operations and Border Issues Division
GST/HST Rulings Directorate
FOOTNOTES
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