1 May 2002 GST/HST Interpretation 37291 - Sections 177, 265 and 266 of the Excise Tax Act in the Context of a Trustee in Bankruptcy and/or a Receiver

Dear XXXXX

Thank you for your letter of September 12, 2001 concerning the application of sections 177, 265 and 266 of the Excise Tax Act (the "ETA") to trustees in bankruptcy and receivers. We apologize for the delay in responding to your enquiry.

As we discussed in our telephone conversation, a ruling can only be provided in respect of a clearly defined fact situation of a particular person, as outlined in section 1.4 of Chapter 1 of the GST/HST Memoranda Series. Accordingly, since the requirements for issuing a ruling have not been met with respect to the questions you have raised, we are unable to issue a ruling in this regard. However, we are pleased to provide you with the following interpretation.

Interpretation Requested

You stated in your submission that sections 265 and 266 are specific provisions of the ETA that generally provide that a trustee in bankruptcy, who is governed by section 265 of the ETA, and a receiver, who is governed by section 266 of the ETA, are deemed to be agents of the person in respect of whom they act. You also noted that the general rules applicable to agents pursuant to section 177 of the ETA, provide among other things, that where an agent acting in the course of a commercial activity of being an agent makes a supply of tangible personal property on behalf of a principal who was not otherwise required to collect tax, the agent is deemed to have made a taxable supply of that property.

We understand from the information provided in your letter and our subsequent telephone conversations that you would like to know whether section 177 of the ETA applies to trustees in bankruptcy and receivers where the trustee in bankruptcy or receiver disposes of tangible personal property of a person who would not otherwise be required to collect GST. If section 177 of the ETA does apply in these circumstances, then the trustee in bankruptcy or receiver would be deemed to have made supplies of the property and would have to account for tax accordingly.

Interpretation Given

It is our view that where a trustee in bankruptcy or a receiver disposes of tangible personal property of another person in their capacity of trustee or receiver and the requirements of sections 265 or 266 of the ETA are met, as the case may be, then these provisions apply to the trustee or receiver, and the rules in section 177 of the ETA do not apply.

The foregoing comments represent our general views with respect to the subject matter of your letter. Proposed amendments to the Excise Tax Act, if enacted, could have an effect on the interpretation provided herein. These comments are not rulings and, in accordance with the guidelines set out in section 1.4 of Chapter 1 of the GST/HST Memoranda Series, do not bind the Canada Customs and Revenue Agency with respect to a particular situation.

For your convenience, find enclosed a copy of section 1.4 of Chapter 1 of the GST/HST Memoranda Series.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-9213.

Yours truly,

Susan Kissner
Senior Rulings Officer
Specialty Tax Unit
Financial Institutions and Real Property Division
Excise and GST/HST Rulings Directorate