GST/HST Ruling

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.

Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 11th floor
320 Queen Street
Ottawa ON K1A 0L5

[Addressee]

Case Number: 126881
Business Number: […]

Dear [Client]:

Subject: GST/HST RULING
Eligibility to claim an 83% public service bodies’ rebate

Thank you for your letters of [mm/dd/yyyy], with attachments, concerning […] (the Corporation) [and its] eligibility to claim the 83% public service bodies’ (PSB) rebate of the goods and services tax (GST) and the federal part of the harmonized sales tax (HST), and an 87% PSB rebate of the provincial part of the HST under section 259 of the Excise Tax Act (ETA) in respect of its activities. We apologize for the delay in our response.

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 ETA unless otherwise specified.

STATEMENT OF FACTS

We understand the facts to be:

1. The Corporation is a registered charity within the meaning assigned to that expression by subsection 248(1) of the Income Tax Act, and is a charity for purposes of the ETA. […]

2. […][Information about the Corporation]

3. […]

4. The Corporation operates […][X] […]

5. […]

6. […]

7. […]

8. […]

9. Individuals wishing to apply for admission to […][X] must contact their regional Community Care Access Centre (CCAC). CCACs are local organizations that were established by the MOHLTC and perform the function of assessing the needs of people to determine the type of care and services required, and admission to long-term care facilities. The CCAC determines eligibility and if granted, an individual can choose from a list of Long-Term Care Homes, […].

10. The MOHLTC website, since updated, provided information on care services, long-term care homes and support services, such as:

“Residential care services provide a place for seniors to live, and offer different types and levels of support. In Ontario, there are three main types of residential care: supportive housing, retirement homes and long-term care homes”.

“Long-Term Care Homes are designed for people who need access to 24-hour nursing care, supervision or higher levels of personal care. These homes are also known as nursing homes, municipal homes for the aged, or charitable homes. Residents pay for accommodation charges and the care is funded by the Ministry of Health and Long-Term Care.”

“Long-Term Care Homes are places where seniors can live and receive support services. They are often the right choice for seniors who need help with the activities of daily living, access to 24-hour nursing care or supervision in a secure setting.”

“In general, Long-Term Care Homes offer higher levels of personal care and support than those typically offered by either retirement homes or supportive housing.”

“The requirements in the LTCHA ensure that residents of these homes receive safe, consistent, and high-quality resident-centred care in settings where residents feel at home, are treated with respect, and have the supports and services they need for their health and well-being.”

“All Long-Term Care Homes offer 24-hour supervision and nursing care.”

“Homes must prepare a "plan of care" for each resident, outlining the care requirements and levels of service offered. This plan must be reviewed at least every three months and adapted as the needs of the resident change.”

11. In-house employees providing health care services at [X] include Registered Nurses (RNs), Registered Practical Nurses (RPNs), and health care aides. Visiting health care providers include doctors, physiotherapists, […].

Residents receive medical treatments and care from qualified medical staff, such as doctors and nurses. […][Residents of X include] frail, sick and dependent […][individuals] who have been assessed by the local CCAC through a standardized process as deemed in need of nursing care and medical attention. The multidisciplinary care teams consist of medical doctors, RNs, RPNs, personal support workers and other paramedical professionals such as physiotherapists, dietician, pharmacist, consulting geriatrician and psychiatrist, dentist and other specialists on referral basis.

12. Health care services provided at [X] generally include:

• 24-hour nursing services and assistance with daily living

• daily physician’s services and visit for each resident

• […][other health care services]

• […]

13. Medically necessary health care services that residents receive at [X] include the provision of medication and its regular monitoring. An annual examination is provided to residents. […][Some other health care services are also provided at X]

Physician services are provided on an ongoing, continual basis in that physicians regularly visit and provide 24-hour on-call services. All residents of [X] have a physician on-call at all times.

On site procedures that physicians perform include physical examinations, ordering of x-rays, and request of blood work for diagnosis.

14. Medical services provided by physicians for the residents, and work that physicians perform […] include the following:

• all residents, upon admission are assigned to a designated physician as their attending family doctor;
• the attending physician will look after the residents’ on-going medical concerns/illness, treatment, medication prescription, providing physician orders for care, specialist referrals;
• the physicians provide weekly rounds to residents and medical attentions to individuals needing medical consultation and/or treatment;
• 24-hours, 7-day on-call roster for urgent/immediate medical consultation and direction;
• […]

15. The Corporation’s […] Manual describes the applicable roles and responsibilities of the […] Attending Physicians [at X]:

[…][Description of the roles and responsibilities of the Attending Physicians] […]

16. […][As] required by the MOHLTC Program Manual [the Corporation has an agreement with the physicians attending at [X]]. The agreement, […], indicates in part that the physician shall:

[…][Description of the Corporation’s agreement with the physicians attending at [X]]

17. The Corporation’s […] Manual describes the roles and responsibilities of the Medical Director [at X]:

[…][Description of the roles and responsibilities of the Medical Director]

18. […], there are [#] physicians serving [X] […]. Although residents are assigned a physician, they can meet with other physicians on an as-needed basis.

19. Each patient has a patient chart/resident file. As well, each physician has a Doctor’s Communication book that is maintained by the nursing staff that the physicians review regularly. The book is also for others as well (e.g., dieticians). The Doctor’s Communication book contains a list of issues pertaining to residents (e.g., behavioural, dietary, physical) requiring the attention of the physician during the next visit to the Facility. A typical entry in the Doctor’s Communication book is a request that the physician assess a resident regarding a rash or other medical issue.

20. Care plans are completed by Attending Physicians, as well as by nursing staff, dietician, and physiotherapist (multi-disciplinary). The care plan includes a series of services, actions, operations or events determined by the Attending Physician to be medically necessary to maintain a resident’s health – all staff can go to the care plan and update. Resident care plan entries include those regarding the resident’s medical history, medications and other health care aspects (e.g., physiotherapy, lab work), the resident’s dietary, behavioural, and social needs and the resident’s requirements regarding the activities of daily living.

21. Residents who take medication are required to have their medication adjusted frequently. Each medication adjustment must be ordered by a physician.

Residents that are insulin dependent have their blood work reviewed a few times a week and each test is reviewed and signed by a physician. Blood must be checked regularly. The physician orders the blood test and a lab will come to do the blood work. The results go to nurses, who inform the physician, who determines changes to resident medication. Nurses can’t make such changes of orders on their own.

22. In regard to nursing staff, the Corporation has […] nurses […]. These numbers include full-time, part-time, and casual. There is always at least 1 RN on duty at all times […].

Nurses contact the on-call physicians regularly regarding changes in medication, test results, orders, and glucose scans for residents under their care. Nursing staff spend significant time for phone consultations with Attending Physicians to discuss change in orders, etc.

23. […][Information about nursing services provided at X]

24. In addition to 7-day, 24-hour nursing services, [X] constantly […][provides] special programs to allow residents to enjoy a high quality of life.

25. To deal with residents with medically unstable conditions, unmanageable symptoms and who are seeking or requiring medical interventions, [X] […][has] palliative care […]

26. […][Information about Agreements for other programs and services provided at X]

27. […][Information about Reports on Staffing levels]

28. The Corporation is funded by the MOHLTC […].

[…][More details about funding]

[…]

29. The Corporation is resident only in the Province of Ontario.

RULING REQUESTED

You would like to know whether the Corporation is entitled to claim an 83% PSB rebate of the GST and the federal part of the HST and, as a person resident in Ontario, an 87% rebate of the provincial part of the HST, as a facility operator.

RULING GIVEN

Based on the facts set out above, we rule that the Corporation is a facility operator making facility supplies […].

As such, the Corporation is eligible to claim an 83% PSB rebate of the GST and the federal part of the HST paid or payable on eligible purchases and expenses to the extent that it intended to consume, use or supply the property or service in the course of activities engaged in by it in the course of operating [X] for use in making facility supplies, or in the course of making facility supplies.

In addition, as the Corporation is resident only in Ontario, it is also eligible for an 87% PSB rebate of the provincial part of the HST paid or payable on eligible purchases and expenses to the extent that it intended to consume, use, or supply the property or service in the course of its activities engaged in Ontario in the course of operating [X] for use in making facility supplies, or in the course of making facility supplies.

This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed. We understand that the Corporation has filed a Notice of Objection on an assessment and we are copying this response to the Appeals Branch.

EXPLANATION

To be eligible for an 83% PSB rebate of the GST and the federal part of the HST, and in the case of a person resident in Ontario, an 87% PSB rebate of the provincial part of the HST (hereafter these two rebates will be referred to as the “83% (and 87%) PSB rebate”), paid or payable on its purchases and expenses related to the making of facility supplies, the person must be a “hospital authority”, a “facility operator” or an “external supplier”.

Hospital Authority

A “hospital authority” is defined in subsection 123(1) as “an organization that operates a public hospital and that is designated by the Minister of National Revenue as a hospital authority” for GST/HST purposes.

The Corporation does not operate a public hospital and is not designated as a hospital authority, and as such it is not a “hospital authority”.

Therefore, to determine whether there is eligibility for the 83% (and 87%) PSB rebate, it is necessary to determine whether the Corporation is a “facility operator” or an “external supplier”.

Facility Operator

A “facility operator” is defined in subsection 259(1) as meaning “a charity, a public institution or a qualifying non-profit organization (other than a hospital authority), that operates a qualifying facility”.

As the Corporation is a charity, it meets the first requirement of the definition. In order to meet the second requirement, the Corporation must operate a “qualifying facility”.

Subsection 259(2.1) sets out three criteria that must be met for a facility, or part of a facility, other than a public hospital, to be a qualifying facility, for a fiscal year, or any part of a fiscal year, of the operator of the facility or part.

A facility or part of a facility will be considered a qualifying facility if:

(a) supplies of services that are ordinarily rendered during that fiscal year or part to the public at the facility or part would be facility supplies if the references in the definition of “facility supply” in subsection 259(1) to “public hospital or qualifying facility” were references to the facility or part;

(b) an amount, other than a nominal amount, is paid or payable to the operator as qualifying funding in respect of the facility or part for the fiscal year or part; and

(c) an accreditation, licence or other authorization that is recognized or provided for under a law of Canada or a province in respect of facilities for the provision of health care services applies to the facility or part during that fiscal year or part.

The requirements contained in (a) to (c) above must be met in order for a particular facility to be a “qualifying facility” for purposes of section 259. A discussion of these requirements follows.

Facility Supply

Subsection 259(1) defines the term “facility supply” as

“an exempt supply (other than a prescribed supply) of property or a service in respect of which

(a) the property is made available, or the service is rendered, to an individual at a public hospital or qualifying facility as part of a medically necessary process of health care for the individual for the purpose of maintaining health, preventing disease, diagnosing or treating an injury, illness or disability or providing palliative health care, which process

(i) is undertaken in whole or in part at the public hospital or qualifying facility,

(ii) is reasonably expected to take place under the active direction or supervision, or with the active involvement, of

(A) a physician acting in the course of the practise of medicine,

(B) a midwife acting in the course of the practise of midwifery,

(C) if a physician is not readily accessible in the geographic area in which the process takes place, a nurse practitioner acting in the course of the practise of a nurse practitioner, or

(D) a prescribed person acting in prescribed circumstances, and

(iii) in the case of chronic care that requires the individual to stay overnight at the public hospital or qualifying facility, requires or is reasonably expected to require that

(A) a registered nurse be at the public hospital or qualifying facility at all times when the individual is at the public hospital or qualifying facility,

(B) a physician or, if a physician is not readily accessible in the geographic area in which the process takes place, a nurse practitioner, be at, or be on-call to attend at, the public hospital or qualifying facility at all times when the individual is at the public hospital or qualifying facility,

(C) throughout the process, the individual be subject to medical management and receive a range of therapeutic health care services that includes registered nursing care, and

(D) it not be the case that all or substantially all of each calendar day or part during which the individual stays at the public hospital or qualifying facility is time during which the individual does not receive therapeutic health care services referred to in clause (C), and

(b) if the supplier does not operate the public hospital or qualifying facility, an amount, other than a nominal amount, is paid or payable as medical funding to the supplier.”

A “physician” is defined in subsection 259(1) as “a person who is entitled under the laws of a province to practise the profession of medicine”.

The definition of “facility supply” is to be applied on a supply-by-supply basis. To be a “facility supply”, the property made available or the service rendered to an individual at the public hospital or qualifying facility must be an exempt supply (other than a prescribed supply). Exempt supplies are listed in Schedule V to the ETA.

Section 1 of Part V.1 of Schedule V exempts supplies of property or a service made by a charity unless specifically excluded under paragraphs (a) to (p) of that section. As the Corporation is a charity, the supplies it makes to the residents would generally be exempt under section 1 of Part V.1 of Schedule V.

Section 2 of Part II of Schedule V exempts a supply of an institutional health care service made by the operator of a health care facility if the institutional health care service is rendered to a patient or resident of the facility. The terms “institutional health care service” and “health care facility” are defined in section 1 of Part II of Schedule V. This section may also apply to exempt supplies of services that the Corporation makes.

Paragraph (a), subparagraphs (a)(i) and (a)(ii), and clause (a)(ii)(A) of the definition of “facility supply” further require that the exempt supply of property be made available, or the exempt supply of a service be rendered, at a public hospital or qualifying facility and be part of a medically necessary process of health care for an individual for the purpose of maintaining health, preventing disease, diagnosing or treating an injury, illness or disability or providing palliative care. This process must be undertaken in whole or in part at the public hospital or qualifying facility and reasonably be expected to take place under the active direction or supervision, or with the active involvement, of a physician acting in the course of practise of medicine (or in certain circumstances, a midwife, a nurse practitioner or a prescribed person in prescribed circumstances).

In circumstances where chronic care requires the individual to stay overnight at the public hospital or qualifying facility, the definition of “facility supply” in subsection 259(1) provides that the process must require, or reasonably be expected to require, the additional elements referred to in clauses (a)(iii)(A) to (D) of the definition of “facility supply”. That is, a registered nurse must be at the public hospital or qualifying facility at all times when the individual is there; a physician or, if a physician is not readily accessible in the geographic area in which the process takes place, a nurse practitioner, must be at, or be on-call to attend at, the public hospital or qualifying facility at all times when the individual is there; the individual must be subject to medical management and receive a range of therapeutic health care services that includes registered nursing care; and it must not be the case that all or substantially all of each calendar day or part during which the individual stays at the public hospital or qualifying facility is time during which the individual does not receive therapeutic health care services.

The decision of the Tax Court of Canada in Elim Housing Society v The Queen (2013-148(GST)G) addressed the question as to whether Elim Housing Society (Elim) was a facility operator operating a qualifying facility. In this decision, the judge made the determination that Elim was entitled to claim the 83% PSB rebate as a facility operator operating a qualifying facility based on the presence of the following elements which indicated Elim to be making facility supplies:

• all of the residents of Elim’s facility had conditions that required “complex care” as that term was defined in a policy manual of the B.C. Ministry of Health Services;
• the residents were extremely dependent on care either by reason of mental or physical impairment, or both;
• residents were under the care of a physician, who was either associated with the facility or had a pre-existing relationship with the resident;
• a tailored care plan was created for each resident, documented and implemented:

• detailed records were kept on the implementation of the care plans,
• medication reviews were required every six months, and
• inter-disciplinary meetings were held annually;

• physicians visited residents frequently (e.g., roughly on a bi-weekly basis);
• physicians were at, or on-call to attend, the facility at all times;
• physicians provided substantial medical care (e.g., addressed medical concerns, participated in medication reviews, attended interdisciplinary meetings);
• registered nurses were at the facility at all times, and nurses were in regular communication with physicians for prescription or advice;
• the facility received funding for 2.8 hours of care per resident per day (the calculation was based on scheduled staffing hours); and
• the care provided was of a different type than ordinary assistance with activities of daily living that a more robust individual might require.

After comparing the services and the care provided by the Corporation at [X] to its residents with the elements described in Elim, we are of the view that facility supplies are provided at [X] by the Corporation.

As mentioned above, subsection 259(2.1) sets out three criteria that must be met in order for a facility or part of a facility to be considered a qualifying facility for all or part of a fiscal year. The first criterion that must be met, under paragraph 259(2.1)(a), is that the exempt supplies made at the qualifying facility must be facility supplies. The exempt supplies that are facility supplies made by the Corporation would meet this first criterion.

Qualifying Funding

The second criterion that must be met under paragraph 259(2.1)(b) for a facility to be a “qualifying facility” is that an amount, other than a nominal amount, is paid or payable to the operator as qualifying funding in respect of the facility or part for the fiscal year or part.

Subsection 259(1) defines “qualifying funding” of the operator of a facility for all or part of a fiscal year of the operator as meaning

“a readily ascertainable amount of money (including a forgivable loan but not including any other loan or a refund, remission or rebate of, or credit in respect of, taxes, duties or fees imposed under any statute) that is paid or payable to the operator in respect of the delivery of health care services to the public for the purpose of financially assisting in operating the facility during the fiscal year or part, as consideration for an exempt supply of making the facility available for use in making facility supplies at the facility during the fiscal year or part or as consideration for facility supplies of property that are made available, or services that are rendered, at the facility during the fiscal year or part and is paid or payable by

(a) a government, or

(b) a person that is a charity, a public institution or a qualifying non-profit organization

(i) one of the purposes of which is organizing or coordinating the delivery of health care services to the public, and

(ii) in respect of which it is reasonable to expect that a government will be the primary source of funding for the activities of the person that are in respect of the delivery of health care services to the public during the fiscal year of the person in which the supply is made.”

The Province of Ontario (through the MOHLTC) is the main source of funds for the operation of [X], […][More details about funding].

This criterion is thus satisfied.

Accreditation, licence or other authorization

The third criterion that must be met under paragraph 259(2.1)(c) for a facility, or part of a facility, other than a public hospital, to be a qualifying facility for a fiscal year, or any part of a fiscal year of the operator of the facility, or part, is that an accreditation, licence or other authorization that is recognized or provided for under a law of Canada or a province in respect of facilities for the provision of health care services applies to the facility or part during that fiscal year or part.

[…]. The Corporation is [appropriately licensed by the MOHLTC pursuant to the Long Term Care Homes Act, 2007], [and is] therefore, […][authorized to operate a long-term care home].

Thus the third criterion that must be met under paragraph 259(2.1)(c) […] is satisfied.

Overall summary

To summarize, […][X] […][meets] all of the requirements of paragraphs (a) to (c) of the definition of “qualifying facility” in subsection 259(2.1) and, as a result, the Corporation is a facility operator for purposes of section 259. Accordingly, the Corporation is entitled to an 83% PSB rebate of the GST and the federal part of the HST paid or payable on eligible purchases and expenses to the extent that it intended to consume, use or supply the property or service in the course of activities engaged in by the Corporation in the course of operating [X] for use in making facility supplies, or in the course of making facility supplies.

In addition, as the Corporation is resident only in Ontario, it is also eligible for an 87% PSB rebate of the provincial part of the HST paid or payable on eligible purchases and expenses to the extent that it intended to consume, use, or supply the property or service in the course of activities engaged in Ontario in the course of operating [X] for use in making facility supplies, or in the course of making facility supplies.

For supplies that the Corporation makes which are not facility supplies, the 83% (and 87%) PSB rebate may still be available if the supplies are “ancillary supplies” or “home medical supplies”.

As the Corporation is a facility operator, it is not an external supplier, since the definition of “external supplier” in subsection 259(1) excludes a facility operator.

ADDITIONAL INFORMATION

As there is no indication that the Corporation is involved in the provision of ancillary supplies or home medical supplies, we offer the following information for your reference.

Ancillary supplies

Subsection 259(1) defines an “ancillary supply” to mean

“a) an exempt supply of a service of organizing or coordinating the making of facility supplies or home medical supplies in respect of which supply an amount, other than a nominal amount, is paid or payable to the supplier as medical funding, or

(b) the portion of an exempt supply (other than a facility supply, a home medical supply or a prescribed supply) of property or a service (other than a financial service) that represents the extent to which the property or service is, or is reasonably expected to be, consumed or used for making a facility supply and in respect of which portion an amount, other than a nominal amount, is paid or payable to the supplier as medical funding.”

Home medical supply

Subsection 259(1) defines a “home medical supply” to mean

“an exempt supply (other than a facility supply or a prescribed supply) of property or a service

(a) that is made

(i) as part of a medically necessary process of health care for an individual for the purpose of maintaining health, preventing disease, diagnosing or treating an injury, illness or disability or providing palliative health care, and

(ii) after a physician acting in the course of the practise of medicine, or a prescribed person acting in prescribed circumstances, has identified or confirmed that it is appropriate for the process to take place at the individual’s place of residence or lodging (other than a public hospital or a qualifying facility),

(b) in respect of which the property is made available, or the service is rendered, to the individual at the individual’s place of residence or lodging (other than a public hospital or a qualifying facility), on the authorization of a person who is responsible for coordinating the process and under circumstances in which it is reasonable to expect that the person will carry out that responsibility in consultation with, or with ongoing reference to instructions for the process given by, a physician acting in the course of the practise of medicine, or a prescribed person acting in prescribed circumstances,

(c) all or substantially all of which is of property or a service other than meals, accommodation, domestic services of an ordinary household nature, assistance with the activities of daily living and social, recreational and other related services to meet the psycho-social needs of the individual, and

(d) in respect of which an amount, other than a nominal amount, is paid or payable as medical funding to the supplier.”

Subsection 259(1) defines “medical funding” of a supplier in respect of a supply to be

“an amount of money (including a forgivable loan but not including any other loan or a refund, remission or rebate of, or credit in respect of, taxes, duties or fees imposed under any statute) that is paid or payable to the supplier in respect of health care services for the purpose of financially assisting the supplier in making the supply or as consideration for the supply by

(a) a government, or
(b) a person that is a charity, a public institution or a qualifying non-profit organization

(i) one of the purposes of which is organizing or coordinating the delivery of health care services to the public, and
(ii) in respect of which it is reasonable to expect that a government will be the primary source of funding for the activities of the person that are in respect of the delivery of health care services to the public during the fiscal year of the person in which the supply is made.”

Calculation of the PSB rebate

The rules in section 259 of the ETA provide that the PSB rebate is calculated and claimed on a claim period by claim period basis. The claim periods of a GST/HST registrant are the same as the reporting periods for its GST/HST returns (i.e., annually, quarterly or monthly). A PSB that is not a GST/HST registrant has two claim periods per fiscal year – the first six months and the last six months of its fiscal year.

A PSB claims its rebate on a property-by-property or service-by-service basis. It is the intended consumption, use or supply of a particular property or service at the relevant time that determines the PSB rebate entitlement for the non-creditable GST or HST paid on that property or service, not the overall activities of the PSB. Generally, the relevant time will be the time the supply was made to, or the property was imported or brought into Ontario by, the Corporation.

The Corporation’s entitlement to an 83% (and 87%) PSB rebate may be limited and require apportionment where the tax paid or payable is for activities that do not qualify for the rebate, unless subsection 259(14) applies.

Subsection 259(14) provides that:

“For the purposes of this section, if a person incurs all or substantially all of the tax that is included in determining the amount of the non-creditable tax charged in respect of property or a service for a claim period of the person acting in the person's capacity as a hospital authority, a facility operator or an external supplier, the person is deemed to have incurred all of the tax that is included in determining that amount in the course of fulfilling the person's responsibilities as a hospital authority, a facility operator or an external supplier, as the case may be.”

The CRA defines “all or substantially all” to mean 90% or more. Generally, subsection 259(14) means that where the Corporation incurs 90% or more of the GST/HST for a property or a service acquired in its capacity as a facility operator (e.g., for use in making facility supplies), all of that GST/HST is deemed to have been incurred in that capacity. As such, the Corporation could claim a PSB rebate for that property or service at the rate of 83% for the GST and the federal part of the HST and, as a resident only in Ontario, at 87% for the provincial part of the HST. For example, if the Corporation incurs GST/HST on its utilities, and the Corporation determines it incurs 93% of the GST/HST in its activities as a facility operator for making facility supplies, the Corporation may claim 100% of the GST/HST it pays on the utilities using the 83% (and 87%) PSB rebate rates.

Please note that the wording of subsection 259(14) requires an allocation to be performed for each property or service identified in the claim period.

Rebate for purchases that do not qualify for 83% rebate

As a charity for purposes of the GST/HST, the Corporation is eligible to claim a 50% PSB rebate of the GST and the federal part of the HST paid or payable on eligible purchases and expenses intended for consumption, use or supply in activities engaged in by the Corporation otherwise than in the course of operating [X] for use in making facility supplies, or in the course of making facility supplies.

As the Corporation is only resident in Ontario, it is also eligible for an 82% PSB rebate of the provincial part of the HST paid or payable on eligible purchases and expenses intended for consumption, use or supply in activities engaged in by the Corporation otherwise than in the course of operating [X] for use in making facility supplies, or in the course of making facility supplies.

For more information on the calculation of the rebate, please refer to the GST/HST guide, RC4034, GST/HST Public Service Bodies' Rebate. This guide is available on our website.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-670-7935. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.

Yours truly,

John Ware
Health Care Sectors Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate

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.

Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5

[Addressee]

Case Number: 171051
Business Number: […]

Dear [Client]:

Subject:	GST/HST RULING
		Application of GST/HST to […] Coconut Chips

Thank you for your fax of June 17, 2015 concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to […] Coconut Chips (the Product) manufactured by […] (the manufacturer) and imported by […] (the distributor). We apologize for the delay in responding.

The HST applies in the participating provinces at the following rates: 13% in Ontario, New Brunswick and Newfoundland and Labrador, 14% in Prince Edward Island and 15% in Nova Scotia. The Government of New Brunswick has proposed to increase the rate of the HST in that province from 13% to 15%, effective July 1, 2016. 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

1. The distributor is registered for GST/HST purposes.

2. The Product is packaged in a […] gram […][packaging] that contains bite-sized slices of […] coconut.

3. The Product is described on the back of the [packaging] as follows: […]

4. The Product’s packaging also includes […].

5. Ingredients for the Product are […].

6. The nutritional data on the packaging shows the sugar content as […]g and the salt content as […]mg per […]g serving of the Product.

7. The distributor has provided […] sample [packaging] of the Product for our review.

8. A physical examination of the Product revealed that the Product is comprised of […] pieces of coconut. The pieces can be anywhere between […] cm to […] cm in length.

9. In terms of taste, the Product does not have a salty/savoury taste. Rather, the Product has a sweet taste.

10. In making the Product, the coconut meat is not baked or fried, […].

RULING REQUESTED

You would like to know whether the supply of the Product is zero-rated under section 1 of Part III of Schedule VI.

RULING GIVEN

Based on the facts set out above, we rule that the supply of the Product is a taxable supply that is excluded from zero-rating under section 1 of Part III of Schedule VI pursuant to paragraph 1(e) of Part III of Schedule VI.

EXPLANATION

Generally, in accordance with section 165, every recipient of a taxable supply made in Canada shall pay tax calculated at the rate of 5% on the value of the consideration for the supply (or 15% in Nova Scotia, 14% in Prince Edward Island, 13% in Ontario, New Brunswick, Newfoundland and Labrador), unless the supply is zero-rated. According to subsection 165(3), the tax rate in respect of a zero-rated supply is 0%. A zero-rated supply is a supply that is included in Schedule VI.

Section 1 of Part III of Schedule VI zero rates supplies of food or beverages for human consumption (including sweetening agents, seasonings and other ingredients to be mixed with or used in the preparation of such food or beverages) unless an exclusion set out in paragraphs 1(a) through 1(r) applies.

Paragraph 1(e) of Part III of Schedule VI excludes from zero-rating supplies of candies, confectionery that may be classed as candy, or any goods sold as candies, such as candy floss, chewing gum and chocolate, whether naturally or artificially sweetened, and including fruits, seeds, nuts and popcorn when they are coated or treated with candy, chocolate, honey, molasses, sugar, syrup or artificial sweeteners.

For GST/HST purposes, coconut is considered a nut. Our research indicates that the sugar content of raw coconut meat is approximately 6g per 100g of weight. As the sugar content of the Product is […]g per […]g, we consider the coconut chips to be nuts treated with sugar. Therefore, the Product is excluded from zero-rating under paragraph 1(e).

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 given in this letter provided that: none of the issues discussed in the ruling 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.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 905-721-5220. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.

Yours truly,

Zubair Patel
Basic Groceries and Point-of-Sale Rebates Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate

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.

Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5

[Addressee]

Case Number: 171791
Business Number: […]

Dear [Client]:

Subject:	GST/HST RULING
		Tax status of […][fruit-based snack foods]

Thank you for your letter of July 16, 2015, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to […] (the Product). We apologize for the delay in replying.

The HST applies in the participating provinces at the following rates: 13% in Ontario, New Brunswick and Newfoundland and Labrador, 14% in Prince Edward Island and 15% in Nova Scotia. The Government of New Brunswick has proposed to increase the rate of the HST in that province from 13% to 15%, effective July 1, 2016. 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

From the information provided in the request for the ruling and in review of the samples of the Product provided, it is our understanding that:

1. […] (the Company) is a GST/HST registrant and has been assigned Business Number […].

2. The Company is a Canadian company based in […][City 1] […].

3. The Product comes in a consumer package containing [#] pieces of the Product and weighing […]g in total.

4. The Company markets the Product as […].

5. The nutritional facts represented are referenced to an individual piece of the Product which weighs […]g and has [#] calories.

6. The Company produces the Product in [#] flavours; […].

7. […][Flavour 1] uses the core Product ingredients of […].

8. In addition to the core ingredients, the other Product flavours add an additional ingredient of […].

9. The Product caters to many consumers with dietary restrictions. The Product is gluten free, vegan, raw, paleo-friendly, peanut free, and does not contain refined sugar, dairy, eggs, additives, or trans fats.

10. […].

11. […].

12. The Product is a chewy, […] snack food.

13. The adhesive qualities of the […] hold the Product ingredients together […].

14. Currently, the Product is supplied exclusively in […][Province 1].

RULING REQUESTED

You would like to know the GST/HST status of the Product.

RULING GIVEN

Based on the facts set out above, we rule that supplies of the Product are taxable supplies that do not qualify for zero-rating under section 1 of Part III of Schedule VI.

EXPLANATION

Generally, every recipient of a taxable supply made in Canada shall pay tax calculated at the rate of 5% on the value of the consideration for the supply (15% in Nova Scotia, 14% in Prince Edward Island, 13% in Ontario, New Brunswick, and Newfoundland and Labrador) unless the supply is zero-rated. According to subsection 165(3), the tax rate in respect of a zero-rated supply is 0%. A zero-rated supply is a supply that is included in Schedule VI.

Section 1 of Part III of Schedule VI zero-rates supplies of food or beverages for human consumption (including sweetening agents, seasonings and other ingredients to be mixed with or used in the preparation of such food or beverages) unless an exclusion set out in paragraphs 1(a) through 1(r) applies.

Based on the information provided, the Product is considered a fruit-based snack food that is similar to a fruit bar and excluded from zero-rating by virtue of paragraph 1(l) of Part III of Schedule VI. Paragraph 1(l) specifically excludes fruit bars, rolls or drops or similar fruit-based snack foods from zero-rating. Paragraphs 85 and 86 of Memoranda Series 4.3, Basic Groceries, state that supplies of fruit bars, rolls, or drops or similar fruit-based snack foods (in solid or semi-liquid form) are taxable. Examples include fruit leathers, dried fruit bars, and similar products that are 100% fruit or have fruit as a significant ingredient. Fruit bars may include one or more fruits or may include fruit in combination with vegetables, grains, nuts or seeds.

[…].

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 given in this letter provided that: none of the issues discussed in the ruling 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.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (905)721-5222. 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.

Yours truly,

David Nichol
Basic Groceries and Recaptured Input Tax Credits Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate

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.

Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5

[Addressee]

Case Number: 172551

Dear [Client]:

Subject:	GST/HST RULING
		GST/HST INTERPRETATION - PROPOSED LAW/REGULATION - Intermittent urinary catheters

Further to your letter of July 26, 2014 to […], we were asked by his office to provide you information concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the supply and importation of intermittent urinary catheters. We apologize for the delay in responding.

The HST applies in the participating provinces at the following rates: 13% in Ontario, New Brunswick and Newfoundland and Labrador, 14% in Prince Edward Island and 15% in Nova Scotia. The Government of New Brunswick and the Government of Newfoundland and Labrador have proposed to increase the rate of the HST in those provinces from 13% to 15%, effective July 1, 2016. The Government of Prince Edward Island has proposed to increase the rate of the HST in that province from 14% to 15%, effective October 1, 2016. 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.

We understand from your letter that you have purchased two types of intermittent catheters: […][ABC] and […][XYZ]. The following description of the catheters is taken from […]:

* [ABC] single-use catheters are designed for single-catheterization.[…]

* [XYZ] catheters are […] single-use catheters […]

You state in your letter that when you purchase the catheters from […] in Canada you are not charged the HST on the purchase price. However, when you purchase the catheters in the United States of America, upon importation you are required to pay the HST on the value of the catheters to the Canada Border Services Agency (CBSA). You would like an explanation as to why you have to pay the HST upon importation of the catheters.

As per GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the Canada Revenue Agency (CRA) will not issue a ruling when a request involves a matter dealing with proposed or draft legislation, draft regulations, budget proposals, or notices of ways and means motions. Accordingly, you will find our response presented in the following manner:

* The first part entitled Rulings Given addresses the tax status of intermittent urinary catheters sold in Canada and imported into Canada on or before March 22, 2016.

* The second part entitled Interpretation Given addresses the tax status of catheters sold in Canada and imported into Canada after March 22, 2016.

* Lastly, you will find a summary of our response.

RULINGS REQUESTED

1. Are supplies of intermittent urinary catheters made in Canada on or before March 22, 2016 taxable supplies subject to the GST/HST?

2. Are importations of intermittent urinary catheters into Canada on or before March 22, 2016 subject to the GST/HST?

RULINGS GIVEN

Based on the facts set above, we rule that:

1. Supplies of intermittent urinary catheters made in Canada on or before March 22, 2016 are taxable and subject to the GST/HST at the appropriate rate (5%, 13%, 14% or 15%) depending on the province in which the supply is made.

2. Importations of intermittent urinary catheters into Canada on or before March 22, 2016 are subject to the HST at the rate of 13% when imported by a resident of Ontario.

EXPLANATION

Supplies of intermittent urinary catheters made in Canada on or before March 22, 2016

Generally all supplies of property and services made in Canada are subject to the GST/HST pursuant to section 165 unless specifically relieved under the ETA. There are exceptions for medical devices that are specifically identified in Part II of Schedule VI as being zero-rated (tax applies at the rate of 0%). If a medical device is not included in Part II of Schedule VI, then the supply of the medical device would be subject to GST/HST, unless another zero-rating or exempting provision applies.

Under Part II of Schedule VI some medical devices are zero-rated in their own right (e.g. supplies of artificial eyes, artificial teeth, hearing aids) while other devices are zero-rated only when supplied under certain conditions (e.g. on the written order of a specified professional for use by a consumer named in the order, or specially designed for use by an individual with a disability). The provisions that relate to urinary products are sections 25 and 37 of Part II of Schedule VI.

Section 25 of Part II of Schedule VI zero-rates a supply of a medical or surgical prosthesis, or an ileostomy, colostomy or urinary appliance or similar article that is designed to be worn by an individual.

Intermittent catheters are typically single-use catheters used to drain the bladder and then discarded, they are not designed to be worn by an individual. As the condition that the urinary appliance is “designed to be worn by an individual” is not met, supplies of intermittent urinary catheters are not zero-rated under section 25 of Part II of Schedule VI.

Section 37 of Part II of Schedule V zero-rates a supply of an incontinence product that is specially designed for use by an individual with a disability.

Incontinence products assist an individual in managing involuntary loss of urine. Some incontinence products absorb urine leakages, reduce odours, control bacteria, maintain dryness, and protect the individual against skin irritation; some products prevent the involuntary loss of urine; and some products collect urine in a collection bag. Examples of incontinence products that may be zero-rated supplies under this section include underpads, underwear, chair and other seat covers (e.g., a seat cover for a lift chair, recliner, wheelchair, car or scooter), incontinence rings and condom catheters.

Intermittent urinary catheters are not incontinence products for purposes of section 37 as they are designed to drain the bladder and not designed to manage the involuntary loss of urine. Accordingly, the supplies are not zero-rated under section 37 of Part II of Schedule VI.

Therefore, supplies of intermittent urinary catheters made in Canada on or before March 22, 2016 are taxable supplies and subject to the GST/HST at the applicable rate depending on the province in which the supply is made, under subsection 165(1) and 165(2).

Importations into Canada on or before March 22, 2016

Section 212 and subsection 212.1(2) provide for the imposition of the GST and the provincial part of the HST in respect of goods imported into Canada.

Pursuant to section 212, every person who is liable under the Customs Act to pay duty on imported goods, or who would be so liable if the goods were subject to duty, is liable to pay the GST on the goods calculated at the rate of 5% on the value of the goods.

Section 212.1 imposes the provincial part of the HST at the appropriate rate in respect of non-commercial importations by a person who is resident in a participating province (i.e., Nova Scotia, New Brunswick, Ontario, Prince Edward Island or Newfoundland and Labrador), For a resident of Ontario, the rate would be 8%. This tax applies in addition to the tax imposed under section 212.

Pursuant to section 213, no GST/HST is payable upon importation of goods included under Schedule VII. Under section 6 of Schedule VII a non-taxable importation includes, in part, a supply under Part II of Schedule VI.

In other words, if the supply of a medical device is included in Part II of Schedule VI that device may be imported on a non-taxable basis pursuant to section 213. That is, no GST/HST would be paid upon importation.

However, as explained above, for supplies made on or before March 22, 2016, there is no provision in Part II of Schedule VI that zero-rates supplies of intermittent urinary catheters. Accordingly, GST/HST is payable upon importation of the intermittent urinary catheters to Canada pursuant to sections 212 and 212.1. The HST at 13% is payable upon importation of intermittent urinary catheters by a resident of Ontario.

Canadian residents may qualify for an exemption which allows returning residents to bring back goods valued up to a specified dollar limit without having to pay duties or taxes, including customs duty, GST/HST and federal excise levies. The CBSA administers the Customs Act and any inquiries regarding the interpretation and the administration of that Act should be directed to them at 1-800-461-9999.

In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the 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.

INTERPRETATION GIVEN

Supplies of intermittent urinary catheters made after March 22, 2016

As mentioned above, supplies of intermittent urinary catheters made on or before March 22, 2016 are taxable at the appropriate rate depending on the province in which the supply is made.

A Notice of Ways and Means Motion introduced by the Minister of Finance on March 22, 2016 proposes to add intermittent urinary catheters to the list of zero-rated medical devices. The proposed amendment is set forth in Bill C-15, Budget Implementation Act, 2016, No. 1, which received First Reading in the House of Commons on April 20, 2016. Although this proposed measure is subject to parliamentary approval, consistent with its standard practice, the CRA is administering this measure on the basis of the Notice of Ways and Means Motion.

Specifically, proposed section 25.1 of Part II of Schedule VI would zero-rate a supply of an intermittent urinary catheter if the catheter is supplied on the written order of a specified professional for use by a consumer named in the order. This would apply to any supply made after March 22, 2016.

Under section 1 of Part II of Schedule VI, “specified professional” means a person who is entitled under the laws of a province to practise the profession of medicine, physiotherapy or occupational therapy; or a registered nurse. Therefore, only a written order by a physician, physiotherapist, occupational therapist or a registered nurse will satisfy the condition “on the written order of a specified professional”.

The term “written order” is not defined in the ETA. For purposes of Part II of Schedule VI, the CRA considers a written order to be a document that contains the name of the individual, a description of the medical device required by the individual, the name and signature of the specified professional and the date of the assessment and completion of the written order.

It is the purchaser’s responsibility to provide a copy of the written order to the supplier. The purchaser does not have to be the person named in the order. Persons who supply intermittent urinary catheters on a zero-rated basis must retain sufficient documentation to enable the CRA to verify that the sale of the medical device was supplied on the written order of a specified professional. A written order from other health professionals, including an individual who is authorized under the laws of a province to prescribe medical devices who is not a “specified professional” would not be sufficient for a supplier to zero-rate a supply of an intermittent catheter.

Intermittent urinary catheters that are not supplied on the written order of a specified professional for use by a consumer named in the order are taxable supplies and subject to the GST/HST at the applicable rate depending on the province in which the supply is made.

For example, tax would have to be paid on the consideration for intermittent urinary catheters supplied throughout the distribution chain (e.g., wholesaler to retailer) or supplied to a hospital authority or long-term care facility for general use by patients or residents of the facility and not on the written order of a specified professional for use by a consumer named in the order. This also includes online purchases of intermittent urinary catheters by an individual where they are not supplied on the written order of a specified professional for use by a consumer named in the order.

Importation into Canada

As explained above, pursuant to section 213, in conjunction with section 6 of Schedule VII, no GST/HST is payable upon importation of goods, the supply of which is included under Part II of Schedule VI.

For supplies made after March 22, 2016, if the intermittent urinary catheters purchased outside Canada are supplied on the written order of a specified professional for use by a consumer named in the order, the supply would be zero-rated under section 25.1 of Part II of Schedule VI. Therefore, under section 213, the intermittent urinary catheters would not be subject to GST/HST upon importation into Canada.

If the intermittent urinary catheters purchased outside Canada are not supplied on the written order of a specified professional for use by a consumer named in the order, the supply would not be zero-rated under section 25.1 of Part II of Schedule VI. Accordingly, the importation of the catheters would be a taxable importation subject to the GST/HST.

The determination of whether the importation of the intermittent urinary catheters is a non-taxable importation would require an examination of documentation and all relevant facts and circumstances relating to the importation. The supplier’s invoice should clearly indicate that the intermittent urinary catheters are supplied on the written order of a specified professional for use by a consumer named in the order. When importing goods, it is the responsibility of the importer of record to provide evidence that the condition for zero-rating has been met.

As stated above, Canadian residents may qualify for an exemption which allows returning residents to bring back goods valued up to a specified dollar limit without having to pay duties or taxes, including customs duty, GST/HST and federal excise levies. Any inquiries regarding this issue should be directed to the CBSA at 1-800-461-9999.

In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the interpretation(s) given in this letter on the proposed amendment(s) to the ETA, including any additional information, is not a ruling and does not bind the CRA with respect to a particular situation. Future changes to these proposed amendments, if enacted, or to the CRA’s interpretative policy could affect the interpretation(s) or the additional information provided herein.

SUMMARY

1. Supplies of intermittent urinary catheters made on or before March 22, 2016 are taxable and subject to the GST/HST at the appropriate rate (5%, 13%, 14% or 15%) depending on the province in which the supply is made, under subsection 165(1) and 165(2).

2. Supplies of intermittent urinary catheters made after March 22, 2016 would be zero-rated if the catheter is supplied on the written order of a specified professional for use by a consumer named in the order, under proposed section 25.1 of Part II of Schedule VI.

3. The GST/HST is payable upon the importation of intermittent urinary catheters to Canada on or before March 22, 2016, under sections 212 and 212.1. The HST at 13% is payable upon importation of intermittent urinary catheters by a resident of Ontario. In addition, Canadian residents may qualify for an exemption which allows returning residents to bring back goods valued up to a specified dollar limit without having to pay GST/HST upon importation of the goods.

4. If the intermittent urinary catheters purchased outside Canada after March 22, 2106 are supplied on the written order of a specified professional for use by a consumer named in the order, the supply would be zero-rated under section 25.1 of Part II of Schedule VI and the intermittent urinary catheters would not be subject to GST/HST upon importation into Canada under section 213.

5. If the intermittent urinary catheters purchased outside Canada after March 22, 2106 are not supplied on the written order of a specified professional for use by a consumer named in the order, the supply would not be zero-rated and the HST at 13% would be payable upon importation of intermittent urinary catheters by a resident of Ontario, under sections 212 and 212.1. In addition, Canadian residents may qualify for an exemption which allows returning residents to bring back goods valued up to a specified dollar limit without having to pay GST/HST upon importation of the goods.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 905-572-2636. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.

Yours truly,

Maria Forte-Long
Health Care Sectors Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate

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.

Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5

[Addressee]

Case Number: 173199
Business Number: […]

Dear [Client]:

Subject:	GST/HST RULING
		Application of GST/HST to the Crisp Winter Jujube

Thank you for your [correspondence] of [mm/dd/yyyy], concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to supplies of Crisp Winter Jujubes (the Product), that are sold by […](the Company). A sample of the Product was sent for our review. We apologize for the delay in responding to you.

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 Company is registered for GST/HST purposes.

2. The Product is sold in re-sealable […]g bags.

3. The ingredients listed on the packaging are jujube and palm oil.

4. The writing on the packaging is predominantly in Chinese, with the exception of the nutritional facts. Our understanding of the translation is as follows:

* Front of package - Natural (original) flavour, it is crispy, the brand name.

* Back of package - […].

5. The Product resembles a small dried apple with a diameter of approximately […]cm.

6. The Product is marketed as “crisp winter jujube”.

7. Jujubes are referred to as Chinese dates.

8. The Product is vacuum fried. It is our understanding that vacuum fried means putting food into a machine that pressurizes and cooks it with the use of hot oil, but at lower temperatures than traditional frying methods. During a low-heat/high pressure fry, fruits and vegetables become crispy.

RULING REQUESTED

You would like to know how the GST/HST applies to supplies of the Product.

RULING GIVEN

Based on our understanding of facts, we rule that supplies of the Product are excluded from zero-rating pursuant to paragraph (l) of section 1 of Part III of Schedule VI of the ETA.

EXPLANATION

Generally, in accordance with section 165, every recipient of a taxable supply made in Canada shall pay tax calculated at the rate of 5% on the value of the consideration for the supply (or at the rate of 13% in Ontario; and 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island), unless the supply is zero-rated. The tax rate in respect of a zero-rated supply is 0%.

Section 1 of Part III of Schedule VI zero rates supplies of food or beverages for human consumption (including sweetening agents, seasonings and other ingredients to be mixed with or used in the preparation of such food or beverages) unless an exclusion set out in paragraph 1(a) through 1(r) of that section applies.

Paragraph 1(l) of Part III of Schedule VI specifically excludes from zero-rating supplies of fruit bars, rolls or drops or similar fruit-based snack foods. Paragraphs 85 and 86 of GST/HST Memoranda Series 4.3, Basic Groceries, state that supplies of fruit bars, rolls, or drops or similar fruit-based snack foods (in solid or semi-liquid form) are taxable. Examples include fruit leathers, dried fruit bars, and similar products that are 100% fruit or have fruit as a significant ingredient.

“Fruit-based” implies a mixture of fruit and at least one other ingredient. Products having fruit as an important ingredient, such that the product is represented to consumers as being fruit-based snack foods, will be excluded from zero-rating under paragraph 1(l).

Based on the information provided, the Product is considered a fruit-based snack food, as the Product has jujube fruit and palm oil as ingredients. Therefore, the Product will be excluded from zero-rating under paragraph 1(l).

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 given in this letter provided that: none of the issues discussed in the ruling 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.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 905-721-5081. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.

Yours truly,

Peter Pushkarna
Basic Groceries and Recapture Input Tax Credits Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate

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.

Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5

Case Number: 174191

[Addressee]

Dear [Client]:

Subject:	GST/HST RULING
		Application of GST/HST to maintenance services on a residential elevator

Thank you for your [correspondence] of September 24, 2014, […], concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to maintenance services on a residential elevator installed in your home.

The HST applies in the participating provinces at the following rates: 13% in Ontario, New Brunswick and Newfoundland and Labrador, 14% in Prince Edward Island and 15% in Nova Scotia. The Governments of New Brunswick and Newfoundland and Labrador have proposed to increase the rate of the HST in those provinces from 13% to 15%, effective July 1, 2016. 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 facts as follows:

1. […]. In [yyyy], you purchased a townhouse in […][City], Ontario that had a residential elevator already installed.

2. The elevator was replaced in [mm] 2009 with an elevator from […][the Company]. You did not pay the GST on the purchase and installation of the elevator.

3. You have not made any modifications to the elevator that was installed in 2009.

4. The elevator has the following features:

a. it serves three floors;

b. it has regular flooring;

c. standard control panels and call station that have not been adjusted;

d. standard handrails;

e. door and floor frames that are flush mounted;

f. it does not have key-controlled continuous pressure buttons;

g. maximum capacity is 750 pounds;

h. accordion doors that must be manually opened and closed; and

i. the clearance between the landing edge and platform is very small.

5. The elevator has a sump pit and sump pump that requires servicing twice a year.

6. The charge for the maintenance services performed by […][the supplier] is $[…] per year.

RULING REQUESTED

You would like to know whether the charge for the maintenance services performed on the residential elevator installed in your home is subject to the HST.

RULING GIVEN

Based on the facts set out above, we rule that the supply of maintenance services performed on the residential elevator in your home is a taxable supply subject to the HST on the consideration for the supply.

EXPLANATION

In general, all supplies made in Canada are taxable unless a provision in the ETA applies to exempt the supply from GST/HST. Exempt supplies are listed in Schedule V and include supplies of certain health care services.

Taxable supplies may be subject to GST/HST at the rate of 5%, 13%, 14%, or 15% (depending on the province in which the supply is made), or they may be zero-rated and therefore taxable at 0%. Zero-rated supplies are listed in Schedule VI and include supplies of prescription drugs and supplies of certain medical and assistive devices.

[…], you state that HST is not charged on the purchase of commonly-used items that assist in your balance and the safety of your mobility such as wheelchairs, walkers, canes, etc. As such, you are asking why HST is levied on the servicing of a residential elevator that also assists with the safety of your mobility as it helps prevent the risk of falls and injuries if you were to use the stairs.

Whether the supply of a good or service is exempt from GST/HST or zero-rated is not dependent on whether the good or service is commonly used or acquired by a person with a disability. For a supply of a good or a service to be relieved of GST/HST, there must be a specific exemption or a zero-rating provision in the ETA for that particular supply. For example, there are provisions in the ETA that zero-rate supplies of wheelchairs and walkers, and canes (Footnote 1) . Without such an exemption or zero-rating provision, the supply of the property or service is generally subject to GST/HST. Therefore, not all goods or services commonly used or acquired by a person with a disability are relieved from GST/HST.

In general terms, sections 2 to 41 of Part II of Schedule VI zero-rate the supply of certain medical and assistive devices, specially designed parts, accessories or attachments for, and the installation, repair and maintenance of, such devices. The zero-rating provisions in Part II of Schedule VI only apply to supplies of medical and assistive devices that are designed for human use and designed for assisting individuals with a disability or impairment.

In addition, each provision in Part II may or may not have conditions that must be met for a supply of a medical and assistive device to be zero-rated. For example, supplies of artificial teeth or hearing aids are zero-rated in their own right with no outstanding conditions. In contrast, supplies of other devices are zero-rated only when certain conditions are met. The most common conditions for zero-rating a supply of a medical and assistive device include a device being:

* specially designed for use by an individual with a (specified) disability;

* supplied on the written order of a specified professional (Footnote 2) ; and

* for use by a consumer with a (specified) disability.

Further to the zero-rating of supplies of certain medical and assistive devices, section 32 of Part II of Schedule VI zero-rates a supply of a part, accessory or attachment that is specially designed for a device described in Part II of Schedule VI.

The only provision that could pertain to a supply of a residential elevator is section 14 of Part II which zero-rates a supply of a chair, walker, wheelchair lift or similar aid to locomotion, with or without wheels, including motive power and wheel assemblies therefor, that is specially designed to be operated by an individual with a disability for locomotion of the individual.

Maintenance services

Moreover, section 34 of Part II of Schedule VI, in part, zero-rates a supply of a service of installing, maintaining, restoring, repairing or modifying a property the supply of which is included in any of sections 2 to 32 and 37 to 41 of Part II of Schedule VI, or any part for such a property if the part is supplied in conjunction with the service.

Therefore, in order for the maintenance service of a residential elevator to be zero-rated under section 34 of Part II of Schedule VI, the supply of the residential elevator must be zero-rated under section 14 of Part II of Schedule VI.

The conditions in section 14 require that the residential elevator must be a wheelchair lift or similar aid to locomotion and must be “specially designed” for use by an individual with a disability for locomotion of the individual. To be “specially designed” evidence must be provided outlining the characteristics that demonstrate the elevator was designed for use by an individual with a disability for locomotion of the individual and not for use by the general population. Thus, the elevator must have features that distinguish it from an ordinary passenger elevator. For an elevator to be “specially designed” the design specifications or details of the elevator must include some of the following features:

* the width of the platform is set to accommodate the turning radius of a wheelchair (unless it is a flow through elevator);
* accessibility to the operating control panel and call stations is adjusted for an individual in a wheelchair;

* the elevator contains:

* appropriate handgrips or handrails for use by an individual in a wheelchair
* anti-skid or similar flooring
* key-controlled continuous pressure buttons
* flush mount door and floor frames are installed allowing for easy entry and exit from the cab;
* the clearance between the landing edge and the platform is appropriately set to prevent the wheelchair from getting caught;
* accordion doors are removed and light curtains or similar closure are installed;
* two to five levels are served; and
* the maximum capacity is 1000 pounds.

The elevator must have sufficient features that distinguish it from an ordinary elevator for purposes of the zero-rating provision. It is not sufficient that the elevator only be used by a person with a disability. It must be specially designed to be operated by an individual with a disability for locomotion of the individual.

From our review of the brochure for the elevator, we found no evidence that the elevator installed in your residence has enough features to distinguish it from an ordinary passenger lift or elevator. There is no reference to the elevator being particularly suitable for assisting individuals with a disability for locomotion. Also, the elevator's design specifications and details do not indicate that it is specially designed to be operated by an individual with a disability for locomotion of the individual.

Based on the above, it is our view that the residential elevator in your home does not meet in the requirements in section 14 of Part II of Schedule VI. We understand that you did not pay GST on the purchase of installation of the elevator in your home in 2009. However, based on the criteria in the brochure, it is our view that the supply of the elevator was a taxable supply subject to the GST at the rate of 5%, regardless of the fact that GST was not charged on its sale.

Since the supply of the residential elevator in your home is not a zero-rated supply, the requirements in section 34 of Part II of Schedule VI are not met and the supply of a maintenance service performed on your elevator is subject to HST at the rate of 13% on the consideration charged by [the supplier].

We understand your concern that the maintenance services on your residential elevator should be zero-rated under the ETA as you believe the servicing of a commonly-used product that assists with the safety of your mobility should be relieved from GST/HST. The Canada Revenue Agency (CRA) is responsible for the administration of the ETA and its Regulations, as passed by Parliament. An amendment to the ETA would be required to treat the supply of the maintenance services as a zero-rated supply. Legislative amendments are a matter of tax policy, which falls within the responsibility of the Department of Finance. We have advised officials of that Department of your concern regarding the tax status of this device and related maintenance services.

In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the 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.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-7952. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.

Yours truly,

Alison Jones
Health Care Sectors Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate

FOOTNOTES

1 Sections 14 and 27 of Part II of Schedule VI, respectively.

2 Section 1 of Part II of Schedule VI defines a “specified professional” to include a doctor, physiotherapist, occupational therapist or a registered nurse.

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.

Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5

[Addressee]

Case Number: 178181

Dear [Client]:

Subject:	GST/HST RULING
      		Temporary Importation of Racing […] Equipment

Thank you for your letter of [mm/dd/yyyy], concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the temporary importation of racing […] equipment.

The HST applies in the participating provinces at the following rates: 13% in Ontario, New Brunswick and Newfoundland and Labrador; 14% in Prince Edward Island; and 15% in Nova Scotia. The Governments of New Brunswick and Newfoundland and Labrador have proposed to increase the rate of the HST in those provinces from 13% to 15% effective July 1, 2016. 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 facts to be as follows:

1. […]([…][The Company]) is a non-resident located in […][Country X] […].

2. […][Specific facts about the Company].

3. […][Additional facts about the Company].

4. […], [The Company] intends to temporarily import into Canada the following goods: […][list of racing equipment imported]

5. The racing […] equipment […][is] not for sale, for lease or for further manufacturing or processing while in Canada […].

6. The […] racing […] equipment, as outlined in fact number 4 above, are goods described in items 38 and 41 of the Schedule to the Temporary Importation (Excise Levies and Additional Duties) Regulations.

RULING REQUESTED

You would like to know whether the temporary importation of the racing […] equipment are non-taxable importations for GST/HST purposes.

RULING GIVEN

Based on the facts set out above, we rule that the temporary importation of the racing […] equipment are non-taxable importations for GST/HST purposes.

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.

EXPLANATION

Generally, all goods imported into Canada are taxable for GST/HST purposes unless specifically relieved under section 213 of the ETA. Importations of goods relieved of tax under section 213 of the ETA are set out in Schedule VII to the ETA. Section 8 of Schedule VII to the ETA deems prescribed goods that are imported in prescribed circumstances into Canada to be non-taxable for GST/HST purposes.

The CBSA has determined that the temporary importation of the racing […] equipment […] qualify for temporary importation […]. Furthermore, these goods are described in items 38 and 41 of the Schedule to the Temporary Importation (Excise Levies and Additional Duties) Regulations.

Goods described in items 41 of the schedule to the Temporary Importation (Excise Levies and Additional Duties) Regulations in circumstances where the terms and conditions of the regulations have been met are non-taxable importations pursuant to subparagraph 3(i)(i) of the Non-Taxable Imported Goods (GST/HST) Regulations.

Similarly, goods described in item 38 of the schedule to the Temporary Importation (Excise Levies and Additional Duties) Regulations when a non-resident imports the goods in circumstances where the terms and conditions of the regulations have been met are non-taxable importations pursuant to subparagraph 3(i)(ii) of the Non-Taxable Imported Goods (GST/HST) Regulations.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-957-8253. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.

Yours truly,

Kevin Smith
Goods Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate

- 2 -

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.

Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5

[Addressee]

Case Number: 167670
Business Number: […]

Dear [Client]:

Subject:	GST/HST RULING
		Application of GST/HST to […][X Fruit Bars] 

Thank you for your [correspondence] of [mm/dd/yyyy], concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the supplies of […][X Fruit Bars] (the Product). Samples of the Product […][in 3 flavours] were sent for our review. We apologize for the delay in replying.

The HST applies in the participating provinces at the following rates: 13% in Ontario, New Brunswick and Newfoundland and Labrador, 14% in Prince Edward Island and 15% in Nova Scotia. The Government of New Brunswick has proposed to increase the rate of the HST in that province from 13% to 15%, effective July 1, 2016. The GST applies in the rest of Canada at the rate of 5%.

All legislative references are to the Excise Tax Act (the ETA) unless otherwise specified.

STATEMENT OF FACTS

1. We understand that you are registered for GST/HST purposes, operating under […][Company name].

2. The Product consists of individually wrapped bars which are sold individually or in pre-packaged bags of 6 servings, as “6-packs”, to […] stores in […][Province X].

3. The ingredients of the Product are as follows: […]

4. The Product has a soft and chewy texture and is shaped into a rectangular bar.

5. […].

6. The Product is not baked. […].

7. You stated the composition of the Product to be: […]

8. […].

RULING REQUESTED

You would like to know:

1. Are supplies of the Product zero-rated as basic groceries under section 1 of Part III of Schedule VI?

2. If supplies of the Product are packaged in groups of six bars, do they meet the criteria as zero-rated pre-packed units, as described in paragraph 96 of the GST/HST Memoranda Series 4.3, Basic Groceries?

RULING GIVEN

Based on the facts set out above, we rule that:

1. Supplies of the Product are not zero-rated under section 1 of Part III of Schedule VI.

2. Supplies of the Product sold in prepackaged groups of 6 bars do not meet the criteria as zero-rated pre-packed units, as described in paragraph 96 of GST/HST Memoranda Series 4.3, Basic Groceries.

EXPLANATION

Generally, every recipient of a taxable supply made in Canada shall pay tax calculated at the rate of 5% on the value of the consideration for the supply (or 15% in Nova Scotia, 14% in Prince Edward Island, 13% in Ontario, New Brunswick, Newfoundland and Labrador), unless the supply is zero-rated. According to subsection 165(3), the tax rate in respect of a zero-rated supply is 0%. A zero-rated supply is a supply that is included in Schedule VI.

Section 1 of Part III of Schedule VI zero rates supplies of food or beverages for human consumption (including sweetening agents, seasonings and other ingredients to be mixed with or used in the preparation of such food or beverages) unless an exclusion set out in paragraphs 1(a) through 1(r) applies.

Paragraph 1(l) of Part III of Schedule VI specifically excludes from zero-rating supplies of fruit bars, rolls or drops or similar fruit-based snack foods. Paragraphs 85 and 86 of GST/HST Memoranda Series 4.3, Basic Groceries, (GST/HST Memo 4.3) state that supplies of fruit bars, rolls, or drops or similar fruit-based snack foods (in solid or semi-liquid form) are taxable. Examples include fruit leathers, dried fruit bars, and similar products that are 100% fruit or have fruit as a significant ingredient. Fruit bars may include one or more fruits or may include fruit in combination with vegetables, grains, nuts or seeds. A bar that has fruit flavouring may also be considered to fall within this category. Based on the information provided, as fruit is a significant ingredient of the Product, the Product is considered a fruit bar.

The exception for products that are prepackaged for sale in quantities of six or more single servings, as described in paragraph 96 of GST/HST Memo 4.3, is only relevant for the products described in paragraph 1(m) of Part III of Schedule VI.

Paragraph 1(m) excludes from zero-rating cakes, muffins, pies, pastries, tarts, cookies, doughnuts, brownies, croissants with sweetened filling or coating, or similar products from being zero-rated where: (i) they are pre-packaged for sale to consumers in quantities of less than six items each of which is a single serving, or (ii) they are not pre-packaged for sale to consumers and are sold as single servings in quantities of less than six.

As the Product has been determined to be a fruit bar, it is excluded from the category of products listed in paragraph 1(m) of Part III of Schedule V1, and therefore paragraph 1(m) is not applicable. Supplies of the Product are not zero-rated under section 1 of Part III of Schedule VI, regardless of the quantities sold.

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 given in this letter provided that: none of the issues discussed in the ruling 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.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 905 721 5081. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.

Yours truly,

Elizabeth Onsiong
Basic Groceries and Recaptured Input Tax Credits Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate

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.

Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5

[Addressee]

Case Number: 154036

October 24, 2016

Dear [Client]:

Subject:	GST/HST RULING
		Psycho-vocational assessments and vocational assessments

Thank you for your […][correspondence] concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to psycho-vocational assessments and vocational assessments. We apologize for the delay of this response.

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. You are a registered Psychological Associate with the College of Psychologists of Ontario. You are self-employed and not registered for GST/HST purposes.

2. You are contracted by rehabilitation companies […] to conduct psycho-vocational assessments and vocational assessments on individuals that are receiving loss of earnings benefits from the […](Third Party) as a result of work-related injury or illness. These assessments are used to assist the individual in returning to work by recommending upgrading, retraining options and alternative vocational options. You are paid a flat fee for your services by the rehabilitation companies.

3. The rehabilitation companies are contracted by the Third Party to provide assessment and job-specific training services as part of a return to work plan or on an independent basis. As part of providing their services to the Third Party, the rehabilitation companies enter into a contract with you to provide vocational assessments and psycho-vocational assessments.

4. Vocational assessments and psycho-vocational assessments are requested for individuals who are unable to return to work in their typical job or lifestyle activities due to the restrictions imposed by a physical or psychological injury or illness. They are conducted on individuals that have difficulty returning to or maintaining the level of performance in former employment and need to identify suitable alternative employment or vocational retraining needs.

5. A vocational assessment considers degrees of impairment, functional academic abilities, transferable skills, aptitudes, interests, job search skills, and loss of earnings. A vocational assessment can also help to identify vocational alternatives that are consistent with an individual’s aptitudes, interests, skills, and physical abilities.

6. A psycho-vocational assessment evaluates the same factors as the vocational assessment. It also evaluates the client’s learning competencies, general personality characteristics, current emotional status, general intelligence quotient, motivation and social skills to identify the potential impact of these metrics on the individual’s ability to participate in training and return to work.

7. In performing the assessments, you initially conduct a clinical interview with the individual and then decide the tests to be administered. The tests include a battery of specialized tests, such as vocabulary/reading comprehension achievement, cognitive intelligence aptitudes, vocational interest measures, anxiety personality measures, psychological testing if presented with symptoms, and pain battery. If English is not the individual’s first language you may use non-verbal tests or bring in an interpreter. You may also use scribes if the individual has an upper spinal cord injury.

8. Upon completion of the assessment you produce a report citing recommendations regarding a jobs profile (i.e., suitable job types) and whether the individual would benefit from retraining, modified duties, graduated hours or a modified workstation.

RULING REQUESTED

You would like to know if your supply of psycho-vocational assessment and vocational assessment services rendered to an individual as described above is exempt from the GST/HST.

RULING GIVEN

Based on the facts set out above, we rule that your supplies of psycho-vocational assessment and vocational assessment services rendered to an individual are exempt from the GST/HST pursuant to paragraph 7(j) of Part II of Schedule V. As such, the consideration for the supply is not subject to the GST/HST.

EXPLANATION

Generally, most supplies of property and services made in Canada are subject to the GST/HST, pursuant to section 165, unless they are specifically exempt under Schedule V. Part II of Schedule V sets out the health care services that are exempt under the GST/HST.

Paragraph 7(j) of Part II of Schedule V exempts a supply of psychological services rendered to an individual by a practitioner of the service.

Section 1 of Part II of Schedule V defines a “practitioner” in respect of a supply of psychological services as a person who

(a) practises the profession of psychology,

(b) where the person is required to be licensed or otherwise certified to practise the profession in the province in which the service is supplied, is so licensed or certified, and

(c) where the person is not required to be licensed or otherwise certified to practise the profession in that province, has the qualifications equivalent to those necessary to be so licensed or otherwise certified in another province.

The College of Psychologists of Ontario is the regulatory body for the profession of psychology in the province of Ontario. Accordingly, a member of the College in good standing meets the definition of a "practitioner" for psychological services provided in Ontario for purposes of paragraph 7(j) of Part II of Schedule V. There is no distinction made in the legislation or in the regulations between a Psychologist and a Psychological Associate with respect to scope of practice or with respect to authorized acts. A Psychological Associate is authorized to perform the same psychological services as a Psychologist and is subject to the same regulations as a Psychologist. Accordingly, a Psychological Associate is a “practitioner” as defined in section 1 of Part II of Schedule V.

However, to be included under the exempting provision in paragraph 7(j) of Part II, the psychological service provided must also meet the definition of a “qualifying health care supply” and not be a “cosmetic service supply”.

A supply that is a cosmetic service supply or a supply in respect of a cosmetic service supply, that is not made for medical or reconstructive purposes, is deemed under section 1.1 of Part II of Schedule V not to be included in Part II of Schedule V.

A “cosmetic service supply” is defined in section 1 of Part II of Schedule V to mean a supply of property or a service that is made for cosmetic purposes and not for medical or reconstructive purposes.

In addition, section 1.2 of Part II of Schedule V provides that for the purposes of Part II of Schedule V, other than sections 9 and 11 to 14 (Footnote 1), a supply must be a “qualifying health care supply” to be included in Part II.

Under section 1 of Part II of Schedule V, “qualifying health care supply” means:

a supply of property or a service that is made for the purpose of

(a) maintaining health,
(b) preventing disease,
(c) treating, relieving or remediating an injury, illness, disorder or disability,
(d) assisting (other than financially) an individual in coping with an injury, illness, disorder or disability, or
(e) providing palliative health care.

The supply of psycho-vocational assessment and vocational assessment services rendered to an individual fall within paragraph (c) or (d) of the definition of "qualifying health care supply" as the purpose of the service is to confirm or identify the issues related to an individual's injury or disability for the purpose of vocational rehabilitation planning and the development of the individual's vocational rehabilitation plan. In addition, the supply of psycho-vocational assessment and vocational assessment services is not a "cosmetic service supply".

Accordingly, your supplies of psycho-vocational assessment and vocational assessment services rendered to an individual meet the conditions of paragraph 7(j) of Part II of Schedule V and are exempt supplies. As such, the consideration paid for the supplies is not subject to the GST/HST.

For additional information, please refer to GST/HST Notice No. 286, Draft GST/HST Policy Statement - Qualifying Health Care Supplies and the Application of Section 1.2 of Part II of Schedule V to the Excise Tax Act to the Supply of Medical Examinations, Reports and Certificates.

In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the 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.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 905-572-2636. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.

Yours truly,

Maria Forte-Long
Health Care Sectors Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate

FOOTNOTES

1 Section 9 of Part II of Schedule V exempts supplies of properties and services covered by provincial health insurance plans, section 11 exempts supplies of food and beverages to a health care facility, section 13 exempts supplies of subsidized home care services and section 14 exempts supplies of various training services.

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.

Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
20 Queen Street
Ottawa ON K1A 0L5

[Addressee]

Case Number: 158060

Dear [Client]:

Subject:	GST/HST RULING
		Supply of professional membership to a non-resident

Thank you for your facsimile received February 17, 2014, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to a supply of a membership in […] ([…][XYZ]).

The HST applies in the participating provinces at the following rates: 13% in Ontario, New Brunswick and Newfoundland and Labrador, 14% in Prince Edward Island and 15% in Nova Scotia. The Government of New Brunswick has proposed to increase the rate of the HST in that province from 13% to 15%, effective July 1, 2016. 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 from your […][correspondence], the following:

* You have been a non-resident of Canada since [yyyy] and are not registered for GST/HST purposes.

* You carry on business, pay taxes and have been a resident of […][Country X] since [yyyy].

* [XYZ] is responsible for […][Province 1] lawyers and paralegals. […].

* You have been a member of [XYZ] since [yyyy] but you do not currently practice law in [Province 1] or elsewhere in Canada. Further, you do not provide [Province 1] law advice anywhere inside or outside of Canada.

* You have maintained your membership in [XYZ] since [yyyy] as a “not in [Province 1]” member under class […].

* A professional membership in [XYZ] is required to practice law in [Province 1]. [XYZ] considers practising law in [Province 1] to mean performing professional services for others as a barrister or solicitor with respect to, or relying on the laws of [Province 1] or the laws of Canada applicable to [Province 1]; or giving legal advice with respect to the laws of [Province 1] or the laws of Canada applicable to [Province 1]. This means an individual can be practising law in [Province 1] whether or not they are physically in [Province 1]. If one gives legal advice with respect to the laws of [Province 1] on the telephone, by e-mail, or through correspondence from a place outside of [Province 1], that individual would be considered to be practising law in [Province 1].

* As a member of [XYZ], you are provided with access to: […][educational programs].

* You have been located outside of Canada each time a supply of the membership is made to you.

RULING REQUESTED

You would like to know if the fee for your membership in [XYZ] is taxable for GST/HST purposes.

RULING GIVEN

Based on the facts set out above, we rule that the membership in [XYZ] supplied by [XYZ] to you is zero-rated (taxed at 0%) pursuant to section 10.1 of Part V of Schedule VI to the ETA.

EXPLANATION

Section 10.1 of Part V of Schedule VI to the ETA zero-rates:

“A supply of intangible personal property made to a non-resident person who is not registered under Subdivision d of Division V of part IX of the Act at the time the supply is made, but not including

(a) a supply made to an individual unless the individual is outside Canada at that time;

(b) a supply of intangible persons property that relates to

(i) real property situated in Canada,
(ii) tangible personal property ordinarily situated in Canada, or
(iii) a service the supply of which is made in Canada and is not a zero-rated supply described by any section of this Part of Part VII or IX;

(c) a supply that is the making available of a telecommunications facility that is intangible personal property for use in providing a service described in paragraph (a) of the definition “telecommunication service” in subsection 123(1) of the Act;

(d) a supply of intangible personal property that may only be used in Canada; or

(e) A prescribed supply.”

In this case, none of the exclusions identified in section 10.1 of Part V of Schedule VI to the ETA apply. As the supply of the membership is made to a non-resident person who is not registered for GST/HST purposes and is outside of Canada at the time of the supply, and because there are no restrictions placed on the membership so it may be used inside and outside of Canada, the supply of the membership is not specifically excluded from these zero-rating provisions and is therefore zero-rated (taxed at 0%) for GST/HST purposes.

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.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-957-8220. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 902-426-5150 (Non-Resident Security and Registration Office, Nova Scotia).

Yours truly,

Doris Rist
Border Issues Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate

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.

Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5

[Addressee]
Case Number: 158766
Business Number: […]

Dear [Client]:

Subject:	GST/HST RULING
      		Place of supply of […][Service X]

Thank you for your letter of [mm/dd/yyyy], concerning the application of GST/HST to the supply of […][Service X] made by […]([…][ACo]) to its customers in Canada. We apologize for the delay in our response.

The HST applies in the participating provinces at the following rates: 13% in Ontario, New Brunswick and Newfoundland and Labrador, 14% in Prince Edward Island and 15% in Nova Scotia. The Government of New Brunswick has proposed to increase the rate of the HST in that province from 13% to 15%, effective July 1, 2016. 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

Based on the information provided, which included a sample […]([…][Agreement]) between [ACo] and [the Recipient] […], and invoices to […]([…][the Recipient]) […], we understand the following:

* [ACo] is a Canadian company that is registered for GST/HST purposes. [ACo] operates in […] locations across Canada, […].

* […]

* […], [ACo] provides [Service X] both on-site and off-site […].

* […][information about [ACo] operations]

RULING REQUESTED

You would like to confirm that [ACo]’s […][on-site and off-site supplies of Service X] are supplies of services in relation to tangible personal property (TPP) and that [ACo] should be collecting GST/HST based on the province where the TPP is situated at the time the services are performed.

RULING GIVEN

Based on the facts, we rule that each [on-site and off-site] supply of [Service X] made by [ACo] is a service in relation to TPP that is made in the province where the TPP, to which the services relate, is situated at the time the services are performed.

EXPLANATION

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 given in this letter provided that: none of the issues discussed in the ruling 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.

As stated in GST/HST Policy Statement P-077R2, Single and Multiple Supplies, the determination of whether a transaction consisting of several elements is a single supply or multiple supplies is a determination of fact. In general, multiple supplies occur when one or more of the elements of a transaction can sensibly or realistically be broken out from the other elements. Conversely, two or more elements of a transaction are generally part of a single supply when the elements are integral components, the elements are inextricably bound up with each other, the elements are so intertwined and interdependent that they must be supplied together, or one element of the transaction is so dominated by another element that the first element has lost any identity for fiscal purposes.

[…]

[ACo]’s [supplies of Service X] are characterized, for GST/HST purposes, as services in relation to TPP. As indicated in GST/HST Technical Information Bulletin B-103, Harmonized Sales Tax – Place of supply rules for determining whether a supply is made in a province, whether a service is considered to be in relation to TPP depends on whether there is a direct connection between the service and the property, taking into account the objectives of the service and the particular circumstances of each case. With respect to determining the objectives of the service, it must be determined whether the service is designed, developed or undertaken to fulfill or serve a particular need or requirement arising from or relating to the property. It must then be determined whether the relationship between the purpose or objective of the service and the property is direct rather than merely indirect. In the case of [the Recipient], [ACo] is retained specifically […][to provide Service X].

A taxable (other than zero-rated) supply made in Canada is subject to GST at the rate of 5% if it is made in a non-participating province, and is subject to HST at the applicable harmonized rate if it is made in a participating province.

Pursuant to paragraph 142(1)(g), a supply of a service is deemed to be made in Canada if the service is, or is to be, performed in whole or in part in Canada. Because […][Service X is] performed by [ACo] at specified locations in Canada, the supply of those services are deemed to be made in Canada for GST/HST purposes.

Whether a supply made in Canada is made in a participating province or non-participating province is determined by section 144.1 and Schedule IX, and where applicable, the […][New Harmonized Value-Added Tax System Regulations (the Regulations)]. Section 144.1 provides that a supply is deemed to be made in a province if it is made in Canada and is, under the rules set out in Schedule IX, made in the province. Further, under section 144.1, a supply made in Canada that is not made in any participating province is deemed to be made in a non-participating province.

Pursuant to section 3 of Part IX of Schedule IX, a supply of property or a service is made in a province if the supply is prescribed to be made in the province.

Generally, in order to apply the place of supply rules for services in relation to TPP, it is necessary to determine where the TPP is situated while the service is performed. Note that the place of supply rules for services in relation to TPP rely on the “Canadian element” of the service, which is defined under section 2 of the Regulations to mean the portion of the service that is performed in Canada.

Under section 15 of the Regulations, if a person makes a supply of a service that is in relation to TPP that is situated in one or more provinces at the particular time when the Canadian element of the service begins to be performed and, at all times when the Canadian element of the service is performed, the TPP remains in the province in which it was situated at the particular time, the supply is made:

a) in a participating province if the TPP is situated primarily in participating provinces at the particular time and

(i) an equal or greater proportion of the TPP is not situated in another participating province at the particular time, or
(ii) if subparagraph (i) does not apply, the tax rate for the participating province is the highest among the participating provinces for which no greater proportion of the TPP is situated in another participating province at the particular time; and

b) in a non-participating province if the TPP is not situated primarily in participating provinces at the particular time.

Under section 16 of the Regulations, if a person makes a supply of a service that is in relation to tangible personal property that is situated in one or more provinces at the particular time when the Canadian element of the service begins to be performed and, at any time during the period when the Canadian element of the service is performed, the tangible personal property does not remain in the province in which it was situated at the particular time, the supply is made:

a) in a participating province if the tangible personal property is situated primarily in participating provinces at any time when the service is performed, the Canadian element of the service is performed primarily in participating provinces and

(i) an equal or greater proportion of the service is not performed in another participating province, or
(ii) if subparagraph (i) does not apply, the tax rate for the participating province is the highest among the participating provinces for which no greater proportion of the service is performed in another participating province; and

b) in a non-participating province if the tangible personal property is not situated primarily in participating provinces at all times when the service is performed or the Canadian element of the service is not performed primarily in participating provinces.

Thus, in respect of each supply of […][Service X to the Recipient], where the […][TPP remains] in the same province while [Service X is] performed, […], the place of supply of those services will be that province, pursuant to section 15 of the Regulations. However, where, during the time the Canadian element of the service is performed, the […][TPP does] not remain in the same province where […][it was] located when the Canadian element of the service began to be performed, it will be necessary for [ACo] to apply the rules under section 16 of the Regulations to determine the place of supply of the services.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-952-4294. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.

Yours truly,

Donato Licursi
Border Issues Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate

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.

Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5

[Addressee]

Case Number: 164961
Business Number: […]

Dear [Client]:

Subject:	GST/HST RULING
		Application of GST/HST to services regarding travel insurance

Thank you for your letter concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to services regarding travel insurance by a travel agency. We apologize for the delay in our response.

The HST applies in the participating provinces at the following rates: 13% in Ontario, New Brunswick and Newfoundland and Labrador; 14% in Prince Edward Island; and 15% in Nova Scotia. The Governments of New Brunswick and Newfoundland and Labrador have proposed to increase the rate of the HST in those provinces from 13% to 15% effective July 1, 2016. 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

From your letter and our telephone conversation, we understand that […](the Agency) operates as a travel agency in […][Province 1]. It earns commissions from the sale of travel products including flights, travel packages, hotels, cruises, resort stays, bus tours, as well as commissions from the sale of travel insurance issued by […](the Insurer), a licensed insurer.

[…]

The Agency entered into an agreement (the Agreement) with the Insurer, […].

[…][Responsibilities of the Agency]

[…]

The Insurer is responsible for claims administration, and for providing the Agency’s staff with training related to the insurance products.

When an Agent sells other travel products to a client, the Agent asks the client if he or she is interested in purchasing travel insurance. If so, the Agent explains the various insurance coverages to the client. The Agent then […] completes an online application for the client by filling in basic client information, and where applicable, the answers to a few health related questions. Based on the policy chosen, and the client’s information, the computer advises if a client is accepted and generates a policy.

The Agency is paid a percentage of the premiums as a commission by the Insurer for its insurance sales, based on the type of insurance product sold […].

RULING REQUESTED

Whether commissions received by the Agency from the Insurer in respect of the sale of travel insurance products are in respect of exempt supplies, and therefore not subject to GST/HST.

RULING GIVEN

Based on the facts set out above, we rule that the Agency’s supply to the Insurer under the Agreement is a taxable supply of a promotional and administrative service, and it is not a supply of a financial service included in the definition of financial service in subsection 123(1). The Agency is required to charge GST/HST to the Insurer on its commissions received pursuant to the Agreement.

EXPLANATION

Generally, a GST/HST registrant is required to charge GST/HST on its taxable supplies of property and services made in Canada (other than zero-rated supplies) but not on its exempt supplies. Zero-rated supplies are taxable supplies included in Schedule VI to the ETA and are taxable at the rate of 0%.

All supplies of financial services are exempt (and not taxable) under Part VII of Schedule V to the ETA unless they are specifically zero-rated under Part IX of Schedule VI to the ETA (which generally requires that the supply be made by a financial institution to a non-resident and that certain other conditions be met). A financial service is defined in subsection 123(1) to mean anything that is included in any of paragraphs (a) to (m) of that definition and that is not excluded by any of paragraphs (n) to (t) of that same definition. For example, a financial service includes, under paragraph (d), the issue, granting, allotment, acceptance and transfer of ownership or repayment of a financial instrument. A “financial instrument” is defined in subsection 123(1) to include an “insurance policy”. The definition of financial service includes in paragraph (l), the agreeing to provide, or the arranging for, a service that is referred to in any of paragraphs (a) to (i), and is not referred to in any of paragraphs (n) to (t).

The term “arranging for” is generally intended to include intermediation activities that are normally performed by a person whose principal business is as a trader or dealer in, or as a broker or salesperson of, financial instruments or money. The activities of the Agent regarding the travel insurance are predominantly promotional and administrative services performed in accordance with the Insurer`s guidelines. They are not the intermediation activities that are normally performed by a person whose principal business is as an agent or broker of insurance. Therefore, the Agency is providing a taxable supply of promotional and administrative services to the Insurer, and this supply is not a supply of an arranging for service under paragraph (l) of the definition of a financial service in subsection 123(1).

As there is no exemption for the supply by the Agency to the Insurer under the Agreement, it is a taxable supply, and the Agency is required to charge GST/HST to the Insurer on its commission.

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 given in this letter provided that: none of the issues discussed in the ruling 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.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 780-495-7507. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.

Yours truly,

Eleanor Struth
Insurance and ITC Allocation Unit
Financial Institutions and Real Property Division
Excise and GST/HST Rulings Directorate