2 January 1995 GST/HST Interpretation 11842-7 - Application of the Goods and Services Tax (GST) to the , of Which You are a Principal Investigator

                                                                        File 11842-7(jh)
 XXXXX                                                                                January 2, 1995

Dear XXXXX

This is in response to your memorandum of July 14, 1994, to Joanne Hoople of my division, regarding the application of the Goods and Services Tax (GST) to the XXXXX of which you are a principal investigator. In your memorandum, you request approval for GST relief from domestic purchases related to the XXXXX activities.

As the XXXXX study is jointly sponsored by the U.S. XXXXX XXXXX ) under contract to the XXXXX a U.S. government agency), and the Canadian government departments of Natural Resources, Forestry, Environment, and Agriculture, it falls within the provisions of the Joint Canada-United States Government Projects Remission Order. The Order provides relief from GST imposed under any division of Part IX of the Excise Tax Act. Division II of Part IX includes the imposition of GST on domestic purchases. Therefore, under the terms of the Order, the XXXXX project is granted relief from GST on domestic purchases related to its official activities.

We were unable to contact you for further information for several months since you had already started working in the field but Ms. Hoople took the opportunity to speak with officials at Natural Resources Canada, formerly Energy, Mines and Resources Canada, to discuss the best method of providing XXXXX relief from GST on domestic purchases. We arrived at a satisfactory solution, as follows:

•   Bills or invoices for taxable purchases of goods or services for official use which you or other investigators receive should include the GST;

•   As a part of the XXXXX project management funding arrangements, Natural Resources Canada is responsible for paying these bills;

•   Natural Resources Canada pays the amount owing which includes the GST, and is able to recover the GST using an internal mechanism to do so.

If you have any further questions on this matter, please contact Marilyn Viger, Manager, Governmental Sectors, at (613) 954-3551 or Joanne Hoople, Policy Officer, at (613) 952-8533.

Yours truly,

J.A. Venne
Director
Special Sectors
GST Rulings and Interpretations
Policy and Legislation