11645-3(crl)
Division III, s. 212
Division IV, s. 217, s. 218
XXXXX
This is in response to information provided by a facsimile message dated January 11, 1996, and an electronic message dated January 16, 1996, from XXXXX and addressed to Mark Seigel of my staff, requesting a GST ruling on the tax status of a postage meter and postage replenishments.
Our understanding of the facts is as follows:
1. XXXXX is a resident of Canada, who is registered for the GST and is trading as XXXXX His registration number is XXXXX. XXXXX operates a mail order business in Canada.
2. XXXXX currently owns a Canadian postage meter but he intends leasing a postage meter from XXXXX located in XXXXX[.]
3. The XXXXX postage meter is capable of being interfaced on XXXXX XXXXX current postage meter.
4. In order to replenish the meter, XXXXX merely contacts XXXXX by telephone and requests additional postage (known as XXXXX provides XXXXX with a code which he keys into the meter thus replenishing the meter. At the same time, XXXXX debits money from a XXXXX bank account to pay for the additional postage.
XXXXX has questioned whether the lease of the postage meter is subject to GST. She has also requested our opinion as to whether XXXXX must self-assess the tax on the additional postage under section 218 of Division IV of the Excise Tax Act (Act).
Based on the facts set out above, we are of the opinion that the lease of the postage meter from XXXXX is subject to GST at time of importation based on the full value for duty of the meter. Furthermore, the replenishment of the meter is not subject to GST under section 218 of Division IV of the Act.
Our opinion is based on the fact that pursuant to section 212 of the Act every person who is liable under the Customs Act to pay duty or who would be so liable if the goods were subject to duty, shall pay 7% GST on the value of the goods. The value of the goods is determined under the Customs Act. There are no provisions under the Customs Act to determine a value based on the leased cost rather than the full value. Considering that XXXXX. XXXXX is a registrant and the postage meter is to be used in his commercial activity, then XXXXX would be allowed to claim a input tax credit on the GST paid at the time of importation under Division III of the Act.
With respect to the replenishment, section 218 of Division IV of the Act requires a recipient of an imported taxable supply to pay GST. However, section 217 of that Division provides a definition of imported taxable supply which excludes a supply of a transportation service pursuant to subparagraph 217(a)(v). Subsection 1(1) of Part VII of Schedule VI defines a freight transportation service as "a particular service of transporting tangible personal property and, for greater certainty, includes a service of delivering mail". Postal services are generally considered to comprise the collection and delivery of postal matter by a public organization. Therefore, the purchase of a postage replenishment would be considered to be the purchase of a postal service and thus a transportation service. In view of the fact that a supply of a transportation service cannot be considered to be an imported taxable supply for purposes of section 218, XXXXX is not required to self-assess the GST.
If you have any questions, please do not hesitate to contact Randy Nanner at (613) 952-8810 or Cheryl Leyton at (613) 954-5124.
H.L. Jones
Director
General Applications Division
GST Rulings and Interpretations
Policy and Legislation
| c.c.: |
C.R. Leyton
R. Nanner |
Doc. # 1582 (REGL)
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