Schedule IX

Part II

Section 1

Administrative Policy

14 March 2019 Interpretation 152843

where there is a direct shipment of goods to a customer of a customer, that generally will determine the province of the supply

The Supplier, a GST/HST registrant and a provider of total document management and marketing solutions. Has a Product A business which, pursuant to a service level agreement (SLA), includes the production or processing of printed matter for a customer (the Recipient), which the Supplier then mails to addresses provided by the Recipient, and the provision of invoice management services to the Recipient.

The Supplier receives an order from a Recipient to produce printed matter which contains descriptions, templates and a proofing system, together with the related printing and delivery service requirements. The Recipient can then order, either by phone or online, pre-printed and/or print-on-demand materials such as stationary, forms, labels and marketing materials, and customized print-on-demand documents to the Recipient’s specific needs by allowing changes to product items in line with the Recipient’s approved template guidelines, such as replacing text, logos and images. Once the proof of a product item is approved by the Recipient, it is sent to the production site for printing by the Supplier.

The Supplier delivers the printed matter either by using a Canada Post mail drop, where the printed matter will then be delivered by Canada Post to the Recipient’s customers or proposed customers, or directly to an address (typically a customer’s address) specified by the Recipient.

CRA stated:

The CRA’s position has been that where a registered supplier supplies goods on a delivered at destination basis and the terms for the sale of the goods dictate that the supplier must deliver the goods to a destination specified by the recipient, the delivery of the goods will generally be considered to be part of a single supply.

We note that […][you suggest] it would be easier for the Supplier to apply the place of supply rules for mail delivery under Part VII of Schedule IX where the Supplier uses Canada Post to send TPP to a Recipient’s customers, instead of having to track where each mail drop is being sent.

… [I]f TPP is supplied on a delivered basis, it would be inappropriate to artificially split the supply into two separate components, for the reasons indicated in P-077R2.

13 June 2011 Headquarters Letter Case No. 133042

place of legal delivery, e.g., under Incoterms, is referenced

In finding that a supply of goods shipped by a non-resident supplier to a GST/HST registrant at an address in a participating province was a supply made in Canada and in that province , CRA stated:

...the phrase "delivered or made available" has the same meaning as that assigned to the concept of "delivery" under the general law of the sale of goods. It is not based on the place where title to the goods transfers....If an Incoterm is used...the place where legal delivery of the goods occurs can be determined by reference to the place where delivery is considered to occur under that Incoterm.

Section 2

Administrative Policy

21 June 2012 Ruling 130623

ordinary location of property determined by agreement

Company A purchase products from manufacturers and supplies an ownership interest in the products by way of sale or lease to recipients. CRA stated:

Section 2 of Part II of Schedule IX deems a supply of TPP that is supplied otherwise than by way of sale (other than TPP that is supplied for no more than three months or TPP that is a specified motor vehicle) to be made in a province if the ordinary location of the property as determined when the supply is made is in the province. In essence, if the parties to an agreement have determined that the ordinary location of a property that is supplied otherwise than by way of sale is in a particular province at the time of the supply, the place of supply of the property is in that province.

In this particular case, if [Company A] and each lessee mutually agree that for purposes of the lease of the [product] by [Company A] the ordinarily location of the [product] is [Province X], then the supply of the [product] is deemed to be made in [Province X] and tax is applicable to the supply based on the tax rate for that province.

Words and Phrases
ordinary location

Section 3

See Also

Techtronic Industries Canada Inc. v. Agence du revenu du Québec, 2014 QCCQ 7394

place of supply at customer destination rather than place of legal delivery into FedEx hands

The plaintiff ("Techtronic"), which was registered for QST purposes, sold power handtools to Quebec customers pursuant to sales agreements ("Sales Policies") that specified that the sales were made "F.O.B. Distribution Centre" (referring to its Toronto distribution centre). Hamel J found that, as a general rule, the shipments occurred through carriers such as FedEx pursuant to contracts for carriage agreed to by Techtronic (para. 112), and found (at para. 120) that Fed Ex was a "common carrier" ("transporteur public"). After noting (at paras. 97, 99, 132) that the delivery occurred in Ontario, he found that s. 22.7 of the Quebec Sales Tax Act (similar to s. 142(1)(a) of the federal Act) and s. 22.9 of the QSTA (substantively the same as s. 3 of Part II of Schedule IX of Part IX of the federal Act) deemed these supplies to be made in Quebec, so that Techtronic was properly assessed for failure to charge QST, stating (at para. 184, TaxInterpretations translation):

Even though the "Sales Policy" provides that sales of [corporeal movable property] to Quebec customers were made "F.O.B. Distribution Centre," this does not nullify the legal effect of sections 22.7 and 22.9 of the QSTA where the conditions provided under section 22.9 of the QSTA are established on the evidence, as occurred here.

Administrative Policy

CBA National Commodity Tax, Customs and Trade Section – 2013 GST/HST Questions for Revenue Canada, Q. 25

carriage arranged by customer

CRA noted that s. 1 rather than s. 3 applied where the Ontario customer rather than the Quebec vendor arranged for the common carrier to ship the goods in question. As the legal delivery occurred in Quebec, that was where the supply occurred.

Part VI

Section 4.1

Administrative Policy

GST/HST Memorandum 28.3 Passenger Transportation Services July 2019

Assimilation to same place of supply of cancellation of ticket (para. 70)

Example 18

A supply of a passenger transportation service from Gander, Newfoundland and Labrador to Toronto, Ontario would be considered to be made in Newfoundland and Labrador. A supply of a service of cancelling the ticket for that trip would therefore also be considered to be made in Newfoundland and Labrador and subject to the HST at a rate of 15%.