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.
Date: October 20, 2014
From: Dan Maharatnam
Rulings Officer
Municipal Sectors Unit
55 Athol St. East
Oshawa, ON L1H 1J8
To: [Addressee]
File: 155555
Subject: GST/HST INTERPRETATION
Overweight Load Permits
On [mm/dd/yyyy], you received a request […] concerning the application of the Goods and Services Tax/Harmonized Sales Tax (GST/HST) to fees collected on overweight load permits.
[…].
We understand that […] overweight load permits (permits) [were] issued by a municipality […] without charging GST/HST on the basis that they were exempt supplies and subsequently the municipality was assessed GST/HST on these supplies.
STATEMENT OF FACTS
Our understanding of the facts is as follows:
1. Subsection 36(1) of The Highways and Transportation Act (the HTA) of Saskatchewan states “No person, without a permit, shall operate a vehicle that exceeds prescribed or ordered weight if that person intends to operate a vehicle on a public highway where the vehicle has a weight or is carrying on any axle or wheel of that vehicle, a gross weight in excess of the maximum gross weight set out in the regulations or a minister’s order.”
2. Subsection 36(3) of the HTA states “A person who wishes to obtain a permit for the purposes of this section shall:
(a) apply to the minister;
(b) comply with any terms and conditions imposed by the minister pursuant to subsection (5); and
(c) pay the prescribed fee.”
3. Subsection 36(4) of the HTA states “The minister may:
(a) issue a permit to an applicant if the applicant has complied with this section and the minister considers it appropriate to do so; or
(b) refuse to issue a permit to an applicant if the applicant has not complied with this section or the minister does not consider it appropriate to do so.”
4. Subsection 51(1) of the HTA states “The minister may appoint any person, organization or Indian band to perform any responsibility assigned to the minister pursuant to this Act or to exercise any of the powers conferred on the minister pursuant to this Act, other than the power to expropriate land.”
5. Section 36.1 of the HTA states
“(1) If pursuant to section 51, the minister delegates to the council of a municipality the power to issue a permit pursuant to section 36, the council may:
(a) subject to subsection (2), set the fee to be paid for that permit; and
(b) delegate the power granted to it pursuant to section 51 to any person that the council may designate, subject to the same terms and conditions applicable to the council.
(2) Notwithstanding any other Act, the fee set by the council of a municipality for a permit pursuant to clause (1)(a) shall not exceed the amount determined by the minister.”
6. You […] [believe] that the title to the roads in question remains with the Province of Saskatchewan.
[INTERPRETATION REQUESTED]
You would like to know whether an overweight load permit issued under section 36 of the HTA by a Saskatchewan municipality, in accordance with sections 51 and 36.1 of the HTA, is excluded from being an exempt supply pursuant to paragraph 20(l) of Part VI of Schedule V to the Excise Tax Act (ETA).
[INTERPRETATION PROVIDED]
In our opinion, an overweight load permit issued under section 36 of the HTA by a Saskatchewan municipality, in accordance with section 51 and 36.1 of the HTA, is an exempt supply under paragraph 20(c) of Part VI of Schedule V to the ETA.
[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 Canada Revenue Agency (CRA) with respect to a particular situation. Future changes to the ETA, regulations, or the CRA’s interpretative policy could affect the interpretation or the additional information provided herein.]
EXPLANATION
Paragraph 20(c) of Part VI of Schedule V to the ETA specifically exempts the supply of a license, permit, quota or similar right when made by a government or municipality or by a board, commission, or other body established by a government or municipality. In this case, a municipality that has been delegated the power to issue permits by the Province, in accordance with section 51 of the HTA, issues overweight load permits to persons in respect of vehicles that exceed a prescribed or ordered weight. As set out in subsection 36(1) of the HTA, these permits allow for the movement of overweight loads on roadways where it would otherwise be prohibited. It is our view that the supply of the overweight load permit by the municipality is an exempt supply in accordance with paragraph 20(c) of Part VI of Schedule V to the ETA.
We note that the opinion requested referred to paragraph 20(l) of Part VI of Schedule V, which sets out exclusions to the exemptions in paragraph 20 including a supply of a right to enter, to have access to, or to use property of a government or municipality. Generally, a right to enter or to have access to government property relates to a right to use or access specific property of a government or municipality (e.g., entrance fees to municipal facilities such as arenas or swimming pools, camping permits etc.).
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 905-721-5172.
Yours truly,
Dan Maharatnam
Rulings Officer
Municipal Sectors Unit
Public Service Bodies and Governments Division
Excise & GST/HST Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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