9 June 2003 GST/HST Interpretation 46149 - Place of Supply of Goods Supplied by Way of Sale

Dear XXXXX:

This is further to our letter to you XXXXX, and your subsequent request for clarification regarding the CCRA's position regarding the place at which a supply of tangible personal property by way of sale is considered to have been made under section 142 of the Excise Tax Act (ETA).

Interpretation Requested

Specifically, you have requested confirmation that:

1. Where a supply of TPP is made by way of sale, the place at which title of the TPP transfers is not the determinative factor in determining where the TPP is considered delivered or made available for purposes of paragraphs 142(1)(a) and 142(2)(a) of the ETA.

2. Where the contract of sale for a particular supply of TPP by a non-resident registrant to a recipient in Canada uses the Incoterm "CIP (specified Canadian destination) Incoterms 2000" in accordance with Incoterms 2000, what is the place at which the TPP is considered delivered or made available for purposes of section 142 of the ETA?

Interpretation Given

1. Where a supply of TPP is made by way of sale, the place at which title of the TPP transfers is not the determinative factor in determining where the TPP is considered delivered or made available for purposes of paragraphs 142(1)(a) and 142(2)(a) of the ETA. Although the place at which title to TPP transfers may happen to coincide with the place at which goods are considered delivered or made available in a particular case, this is by no means always the case, as in the situation that was the subject of our letter to you XXXXX.

The CCRA's position with respect to where a supply of TPP by way of sale is considered to have been delivered or made available remains as set out in GST/HST Memoranda Series 3.3 Place of Supply. Specifically, for purposes of paragraphs 142(1)(a) and 142(2)(a) of the ETA, the phrase "delivered or made available" has the same meaning as that assigned to the concept of "delivery" under the law of the sale of goods. "Delivered" refers to those situations where delivery of the TPP under the applicable law of the sale of goods is effected by actual delivery, while "made available" refers to those situations where delivery of the tangible personal property under the applicable law of the sale of goods is effected by constructive delivery (i.e., actual physical possession of the tangible personal property is not transferred to the recipient of the supply yet is recognized as having been intended by the parties and as sufficient in law).

In any given case, the place where TPP is delivered or made available may be determined by reference to the place where it is considered to have been delivered under the law of the sale of goods applicable in that case. Generally, the place where the TPP is delivered or made available can be determined by reference to the terms of the contract of sale.

2. Where the contract of sale for a particular supply of TPP by a non-resident registrant uses the Incoterm "CIP (specified Canadian destination) Incoterms 2000" in accordance with Incoterms 2000, the place at which the TPP is considered delivered or made available for purposes of section 142 of the ETA is the place at which delivery of the goods is specified as taking place under Incoterms 2000. Specifically, the TPP is considered to be delivered to the recipient at the place at which the supplier hands over the TPP to the carrier nominated by him to bring the goods to the named destination or, where there is a succession of carriers, the place at which the goods are handed over to the first carrier. Therefore, if the contract of sale uses the term "CIP (specified Canadian destination)" and the non-resident supplier delivers the TPP to the carrier (or first carrier, as the case may be) outside Canada, delivery of the TPP is considered to take place outside Canada and the supply will consequently be deemed to be made outside Canada under paragraph 142(2)(a) of the ETA.

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 the GST/HST Memoranda Series, do not bind the CCRA with respect to a particular situation.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 954-4291.

Sincerely,

Béatrice Mulinda
Border Issues Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate