Telephone No.: (613) 957-8224
Fax No.: (613) 990-3602
File No.: 11680-4
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Subject:
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GST Interpretation: Implications of Non-Resident Call Centres in Canada
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Dear Mr. XXXXX
I refer to your letter dated February 22, 1996 and your telephone conversations with Mr. Randy Nanner of my division requesting an explanation of the application of the GST to orders taken through a call centre in Canada and filled in XXXXX[.]
Interpretation Given
The existence of a call centre of a non-resident registrant does not, in and of itself, determine whether supplies made by the non-resident registrant are subject to Division II tax.
Section 142 of the Excise Tax Act (ETA) sets out the rules for determining whether a supply is considered to be made in or outside Canada for Division II purposes. Paragraph 142(1)(a) of the ETA deems a supply to be made in Canada if in the case of a supply by way of sale of tangible personal property (TPP), the property is, or is to be, delivered or made available in Canada to the recipient of the supply. Paragraph 142(2)(a) deems a supply to be made outside Canada if in the case of a supply by way of sale of TPP, the property is, or is to be, delivered or made available outside to the recipient of the supply.
I understand from your conversations with Mr. Nanner that you stated that the terms of delivery would be F.O.B. the plant's facility in XXXXX[.] Duties and taxes are being precollected. The goods are shipped to a customs clearance point and cleared in the recipient's name. The goods are thereafter mailed in Canada. There is a clear indication to the recipient that the terms of delivery are such that the goods are to be delivered or made available in XXXXX[.] Based on your above description, Division II tax would not be applicable to the supply regardless of whether the non-resident company is registered for GST purposes. Division II tax is not to be charged on goods delivered or made available outside Canada. Division III tax, however, would be applicable on the value for duty, which is determined in accordance with the Customs Act.
For your information, I am attaching a policy statement on the interpretation of the phrase 'delivered or made available in (or outside) Canada to the recipient'.
The foregoing comments represent our general view with respect to the subject matter of your letter and telephone conversations with Mr. Nanner. Proposed or future amendments to the legislation may result in changes to our interpretation. These comments are not rulings and, in accordance with the guidelines set out in GST Memoranda Series (1.4), do not bind the Department with respect to a particular situation.
Should you require further information, please do not hesitate to contact Randy Nanner at (613) 952-8810, Carol Ann Villeneuve at (513) 957-8224 or the XXXXX Tax Services Office at XXXXX[.]
Yours sincerely,
H.L. Jones
Director
General Applications Division
GST Rulings and Interpretations
Policy and Legislation Branch
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