28 September 1998 General Information Letter HQR0000702 - GENERAL INFORMATION LETTER Sales to Provincial/Territorial Governments

                                                                        GST/HST Rulings and Interpretations
 Directorate
Place Vanier, Tower C, 10th Floor
25 McArthur Road
Vanier, Ontario
XXXXX                                                                                 K1A 0L5

Dear Ms XXXXX

Thank you for your letter of April 11, 1997 concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to supplies made by XXXXX to provincial/territorial governments. Your enquiry followed our meeting of March 11, 1997. XXXXX were also in attendance. We apologize for the delay in responding to your query.

During our meeting, and in your subsequent letter, you raised several issues. Of particular concern is the possible use of abbreviations in the endorsement XXXXX sold to provincial entities by XXXXX. We understand that this may be necessary as a result of the limited space available on XXXXX. Both the full name of the entity, together with the traveler's name, cannot always be printed in the space provided. Since these abbreviations are not used consistently by all of its travel agents, XXXXX has encountered difficulty in matching the abbreviations used by its agents to the names maintained by the Department. You have asked whether the use of abbreviations, in this instance, by XXXXX GTS is acceptable to the Department.

Whether or not the Department will accept the use of abbreviations is a matter that can be determined only on audit. However, provided a supplier has taken reasonable efforts to ensure a recipient is a provincial government entity, and they have maintained adequate documentary evidence to support this claim, they should be justified in not charging GST. Should you decide to proceed with the use of abbreviations it may be prudent to develop a master listing of these abbreviations which could then be used by your ticket agents to ensure consistency.

You have also raised concerns regarding the difficulty experienced by XXXXX in determining whether a particular entity is entitled to tax relief. Because of the general wording used in the entity listings and because of the ongoing names changes to such entities, verification by XXXXX of an entity's entitlement is trying. You advised that XXXXX does not have up-to-date lists of provincial and federal government bodies.

Regarding the general wording used in some of the provincial entity listings, it is my understanding that at the time when the Reciprocal Taxation Agreements (RTA) were first negotiated, it was agreed that such listings could contain a general heading to ensure that entities undergoing name changes as a result of reorganization would be captured under the RTA and provided with tax relief. The specific breakdown of entities within a provincial government, as provided in the RTAs, was devised for vendor simplicity. As the most recent RTAs with the provinces expire in late 1998, negotiations for their renewal are underway. The Department of Finance has been made aware that the use of general wording in the RTAs causes some difficulty in confirming whether an entity qualifies for relief.

To assist vendors in determining whether a particular entity is entitled to tax relief the Department maintains listings of entities which comprise the provincial governments for GST/HST purposes. All changes to these listings are negotiated with the Department of Finance by the provincial governments. Upon completion of these negotiations Revenue Canada is advised and its databases are updated as soon as possible thereafter. For your reference, we have enclosed a copy of the Department's most recent provincial entity listings. As changes to these listings are ongoing, please contact one of the Department's TIS Centres should you require confirmation as to the status of a purchaser as a provincial entity at any point in time. With respect to obtaining an up-to-date listing of federal government bodies, may we suggest that you call Treasury Board at 613-2400 or access this information through its home base at www.tbs-sct.gc.ca.

Your final concern deals with the fact that some individuals listed in the attachment to our letter of November 22, 1996, did not seem to be aware that they had each identified an officer to deal with enquiries from XXXXX travel agents. Although there was a slight delay in getting a copy of our letter out to all of the TIS Centres across Canada, the letter was in fact sent and the individuals were notified.

In addition to the above concerns, you asked whether a certification clause issued by a provincial government entity and provided by a provincial government employee using a provincial credit card is sufficient documentation to support a non-taxable sale.

The use of credit cards by provincial government employees is currently under review by the Department of Finance and we are therefore unable to provide our comments on this issue at the present time. We will however keep a file open on this issue and provide you with our comments as soon as possible.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 954-7952.

Yours truly,

Lynn F. Renner
Rulings Officer
Governments Unit
GST/HST Rulings and Interpretations Directorate

Attachment

ATIP

Lynn Renner (HQR0000702)
Eric Marion, Department of Finance
All TIS Team Leaders and Ministère du Revenue du Québec (for info. only)