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: 187140
Dear [Client]:
Subject: GST/HST INTERPRETATION
Claim period of a public service body that becomes a GST/HST registrant during a fiscal year
Thank you for your letter of September 27, 2017, concerning the interpretation of the term “claim period” of a person, which is defined in subsection 259(1) of the Excise Tax Act (ETA).
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%.
We understand that you would like clarification on how a charity would claim the public service bodies’ rebate in a fiscal year in which it becomes a registrant for purposes of the GST/HST. You have provided the following situation as an example:
A registered charity for purposes of the Income Tax Act that is a charity for purposes of the ETA has a fiscal year end of December 31.
The charity is entitled to claim a public service bodies’ rebate of 50% of the GST or the federal part of the HST paid or payable on eligible purchases and expenses throughout the 2017 year as all provisions of section 259(3) of the ETA are met.
A charity that is resident in a participating province, and is not a selected public service body, may also be entitled to claim a public service bodies’ rebate for the provincial part of the HST paid or payable on eligible purchases and expenses. However you have not specified in which province(s) the charity is resident in your example and it is not relevant for purposes of your question. Therefore, this letter will address the question as if the charity is not resident in a participating province.
At the beginning of its fiscal year 2017, the charity is not a registrant for purposes of the GST/HST. Therefore, it would normally have two claim periods during its fiscal year; one claim period consisting of the first and second fiscal quarters in its fiscal year and a second claim period consisting of the third and fourth fiscal quarters of its fiscal year.
The charity’s first claim period in the fiscal year is January 1 to June 30, 2017. As a non-registrant for purposes of the GST/HST the charity has up to four years from the last day of the claim period to file a public service bodies’ rebate application to recover a percentage of the GST/HST paid or payable on their eligible purchases and expenses.
On October 1, 2017, the charity registers for purposes of the GST/HST. The charity elects to file quarterly GST/HST returns.
On December 31, 2017, the charity is a registrant for purposes of the GST/HST and therefore would have a claim period of October 1 to December 31, 2017. A GST/HST registrant has up to four years from the due date of its GST/HST return for the claim period to file a public service bodies’ rebate application to recover a percentage of the GST/HST paid or payable on their eligible purchases and expenses.
INTERPRETATION REQUESTED
You would like to know how the charity claims a public service bodies’ rebate of 50% of the GST or the federal part of the HST paid or payable on eligible purchases and expenses during the period beginning July 1, 2017, and ending September 30, 2017, when it is not a registrant for purposes of the GST/HST.
INTERPRETATION GIVEN
Becoming a registrant for purposes of the GST/HST deems a reporting period of the charity to begin on the day it became a registrant and end on the last day of the reporting period of the charity. It is the CRA’s position that the day immediately preceding the day that the charity becomes a registrant is the last day of the charity’s claim period as a non-registrant. Therefore, the charity would have a claim period that begins on July 1, 2017, and ends on September 30, 2017.
Based on the information provided, the charity is entitled to claim a public service bodies’ rebate of 50% of the GST or the federal part of the HST paid or payable on eligible purchases and expenses during the period beginning July 1, 2017, and ending September 30, 2017. As a non-registrant the charity has up to four years from the last day of the claim period to file a public service bodies’ rebate application to recover a percentage of the GST/HST paid or payable on their eligible purchases and expenses.
Canada Revenue Agency (CRA) employees that assess public service bodies’ rebate applications are instructed to individually examine any non-registrant claim periods that do not consist of the first and second fiscal quarters in the public service body’s fiscal year, or the third and fourth fiscal quarters of the public service body’s fiscal year. Any registration for purposes of the GST/HST during a given claim period should be noted by the assessor and result in an otherwise eligible public service bodies’ rebate application being approved.
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 given in this letter, including any additional information, is not a ruling and does not bind the CRA with respect to a particular situation. Future changes to the ETA, regulations, or the CRA’s interpretative policy could affect the interpretation or the additional information provided herein.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-670-7941. 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,
Trent MacDonald
Charities and Non-Profit Organizations Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
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