A charity which sold goods throughout the year in a gift shop also engaged in a special fund-raising campaign in which those who made donations over a specified amount received a T-shirt which had been purchased by the charity and was not available for sale in its shop. As the T-shirts had a value of over 10% of the contributions, it issued charitable receipts for only the amount of the contributions minus such T-shirt value (see ITTN, No. 26). In finding that the supplies of T-shirts by the charity to the donors were not exempt, with HST or GST applying on the consideration of $X for each supply of a T-shirt, CRA stated:
excluded from exemption under paragraph 3(a) of Part V.1 of Schedule V is a supply by way of sale of any personal property or service made by a charity in the course of a fund-raising activity where: • the charity makes supplies of such property or services in the course of that activity on a regular or continuous basis throughout the year (any period of twelve consecutive months) or a significant portion (30% or more) of the year; or • the agreement for the supply entitles the recipient to receive from the charity property or services on a regular or continuous basis throughout the year or a significant portion of the year. ....as XXXXX supplied the t-shirts to contributors on a weekly basis from XXXXX to early XXXXX, it sold the t-shirts on a regular and continuous basis throughout a significant portion of the year. As a result, XXXXX supplies of the t-shirts to persons making contributions of $XXXXX and $XXXXX were not exempt.