File: 11995-5(DRM)
Doc: 964
I refer to your E-mail transmission of November 18, 1994, concerning the application of the Goods and Services Tax (GST) to the service of forwarding mail. You have requested that I review the attached draft response and, if necessary, provide comments.
I agree that the service of transporting mail from a place in Canada to a place outside of Canada will be zero-rated, provided that all the conditions of section 6 of Part VII of Schedule VI to the Excise Tax Act (the Act) are met. In particular, the condition that the value of the consideration for the supply is $5 or more. Furthermore, I agree that the sorting of the mail as required by XXXXX officials would not in any way constitute a further processing of the property. It is my opinion that the sorting of mail would be considered part of the freight transportation service as defined in subsection 1(1) of Part VII of Schedule VI to the Act.
I also agree with your conclusion that the supply of the domestic postal service is subject to GST at a rate of 7%.
If you have any questions or comments, please do not hesitate to contact Dwayne Moore, Tax Policy Officer at 954-4206.
A. D'Abramo
Manager, Services Unit
Tax Policy - Special Sectors
GST Policy & Legislation
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