29 January 2008 GST/HST Ruling 95191 - Block Fees Billed by Psychiatrists Relating to Uninsured Services

Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.

Dear XXXXX:

Thank you for your letter XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the charter vehicle industry.

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

Effective January 1, 2008, the rate of the GST has been reduced from 6% to 5% and the rate of HST from 14% to 13%. The new rates apply to supplies for which the GST/HST is paid on or after January 1, 2008, without having become payable before that date. Specific transitional rules apply to certain supplies, for example, real property. For more information on the transitional rules for the reduction of the GST/HST rate, please refer to GST/HST Notice 226, GST/HST Rate Reduction in 2008 on the Canada Revenue Agency (CRA) Web site at www.cra-arc.gc.ca/E/pub/gi/notice226/README.html.

XXXXX.

XXXXX.

We acknowledge your request for a ruling; however, in accordance with GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretation Service, rulings can only be issued with respect to a clearly defined fact situation of a person. Instead, we offer the following interpretation.

Interpretation Requested

You are concerned that there is a lack of consistency in the charter vehicle industry with respect to charging GST/HST. You are particularly interested in the GST/HST rules concerning a continuous journey and how they relate to the industry. Therefore, you have presented three different scenarios and would like to know what amount of GST/HST is applicable in each one. These scenarios involve charter vehicle trips to and from the United States where payment for the trip is accompanied by a gratuity.

Interpretation Given

Different businesses operating within the same industry may nevertheless be doing business in different ways. As a result, the application of GST/HST may vary. In the absence of specific facts, such as agreements, we cannot comment further on the scenarios that you have presented.

Information for the travel industry may be found in the guide RC4036, GST/HST Information for the Travel and Convention Industry. The topic of continuous journey is covered in the guide under the main heading of Passenger transportation services. All CRA publications are available on the CRA Web site at www.cra-arc.gc.ca/formspubs/type/menu-e.html. It is important to note that there are several conditions, as well as documentary requirements, that must be met for a passenger transportation service to be part of a continuous journey.

Gratuities

Gratuities will not be subject to GST/HST when given voluntarily by a customer to an employee of a business. However, when a business that is registered for GST/HST includes a gratuity as part of the charge for a taxable supply, whether it is a mandatory or a suggested amount, GST/HST will be calculated on the total amount including the gratuity.

Where it cannot be distinguished whether payment for a taxable supply includes a voluntary gratuity or not (e.g., taxi chit) the entire amount is subject to GST/HST. In the example of a taxi chit, because taxi fares are inclusive of GST/HST, the entire amount is then taken into consideration when calculating the amount of GST/HST.

The foregoing comments represent our general views with respect to the subject matter of your request. These comments are not rulings and, in accordance with the guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, do not bind the CRA with respect to a particular situation. Future changes to the ETA, regulations, or our interpretative policy could affect this interpretation.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (613) 954-2488. 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,

Carla Schur-Ellison
Services and Intangibles Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate

2008/02/13 — RITS 96408 — Distinction Between Small and Large Seeds for GST/HST Purposes