Section 165

Subsection 165(1) - Imposition of Goods and Services Tax


Imperial Parking Ltd. v. Canada, [2000] GSTC 52 (FCA)

The appellant operated a parking lot with a variety of payment options, including permits, hourly rates, and overnight rates. It posted notices in its lot that vehicles that did not otherwise obtain authorization would be charged $50. Robertson JA affirmed the Minister's opinion that the $50 "fines" were consideration for a taxable supply - the provision of parking services. He stated (at para. 13):

Properly construed, the agreement contemplated by the appellant's signage is that a motorist will pay a maximum of $50 per day for use of a parking space and less if the terms of the contract relating to payment of the lower hourly, daily or evening rates are adhered to. The terms of the contract are clear. If you want to pay less for a parking spot, purchase a ticket for the time needed. If you overstay, then you will pay more than the minimum as well as run the risk of having your vehicle towed. In summary, an overstayer remains contractually bound to the appellant until such time as the latter receives payment in accordance with the terms of the contract.

See Also

Stadion Amsterdam CV v Staatssecretaris van Financiën (Secretary of State for Finances, Netherlands), [2018] EUECJ, Case C-463/16 (18 January 2018) (ECJ (9th Chamber))

composite single supply is chargeable at a single VAT rate

Stadion Amsterdam provided tours of a stadium and associated facilities. The price of the tour was €10, of which €3.50 corresponded to the price of a visit to the (on site) AFC Ajax museum, which the participants were free to visit at the conclusion of the tour. A separate supply of access to the museum would have been subject to a reduced rather than standard rate of VAT.

In answer to the question referred to it by the Netherlands Supreme Court, the Court concluded (at para. 36):

[A] single supply, such as that at issue in the main proceedings, comprised of two distinct elements, one principal, the other ancillary, which, if they were supplied separately, would be subject to different rates of VAT, must be taxed solely at the rate of VAT applicable to that single supply, that rate being determined according to the principal element, even if the price of each element forming the full price paid by a consumer in order to be able to receive that supply can be identified.

Earlier (at para. 27) after referring to the situation here where “it is possible to identify the price corresponding to each distinct element forming part of the single supply,” the Court stated:

The fact that such identification is possible or that the parties agree on those prices is not capable of justifying an exception to the principles arising from the [single-supply] case-law… .

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Supply single supply of stadium tours and museum admission at a single VAT rate 85

Simon Fraser University v. The Queen, [2013] GSTC 57, 2013 TCC 121 (Informal Procedure)

The appellant, a university, maintained parking spaces around campus and imposed parking fines pursuant to special statutory authority. The signs setting out the parking rates did not describe the fines other than to say "vehicles not displaying valid receipts are subject to ticketing." The Minister argued that the fines were consideration for a taxable supply (being the provision of parking services) and therefore were subject to GST or, in the alternative, that they were subject to GST under s. 182 on the basis of a breach of contract for those parking services.

C Miller J granted the university's appeal. The fines were pure fines rather than consideration for parking services. They were imposed pursuant to the university's mandate to conduct university business rather than a profit motive, and the obligation to pay was based on the university's statutory powers rather than contract. These two factors distinguished the present case from Imperial Parking. C Miller J stated that a non-paying driver does not agree to pay a fine as consideration for the supply of the parking spot - "the agreement is basically, if I get caught I pay a fine."

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 182 - Subsection 182(1) parking fines were fines rather than consideration 327

Stanley J. Tessmer Law Corporation v. The Queen, 2013 TCC 27

The appellant did not collect GST on the legal fees charged to some of its clients, who were defending against criminal charges. Paris J. found that the defendants' Charter rights under s. 10(b) and 11(d) to legal counsel did not entail a right to be exempt from GST. As a basic charging provision, s. 165 is a law of general application whose purposes do not include impeding a defendant's right to counsel; nor did the appellant demonstrate that s. 165 brought about an unconstitutional result, or that it could hypothetically bring about such a result.

Customs & Excise Commissioners v. Plantiflor Ltd., [2002] UKHL 33, [2002] 1 WLR 2287, [2002] STC 1132', [2002] BTC 5413 (HL)

The taxpayer, which sold horticultural products by mail order, indicated in its catalogue that customers would pay an additional charge to cover the costs of postage and packing, and stated "We will then advance all postage charges to Royal Mail on your behalf."

After finding that there in fact was only one supply involved (of delivered bulbs) Lord Slynn went on to find that, even if there were two supplies, the portion of the money received by the taxpayer for postage constituted part of the consideration received by it for the supply of the bulbs. The argument that the taxpayer received that portion as agent for the Royal Mail was contrary to the terms of the agreement between it and the Royal Mail, which made it clear that the Royal Mail was to deliver parcels for the taxpayer, i.e., there was no link between the Royal Mail and the customer.

Administrative Policy

25 August 2004 Headquarter Letter RITS 53938

A surcharge made by a car dealership to its customers in order to recover the cost to it of an amount payable by it to the manufacturer to reimburse the manufacturer for a $100 excise tax imposed on an air conditioner included in the car, would be part of the consideration for the sale of the automobile.

23 December 2002 Technical Interpretation RITS 38588

"Where a separate amount is paid by a lessee on account of property taxes, this amount is part of the consideration for the rental of the property, even if the lessee pays the amount directly to the municipality ... While the Tenant may be responsible under the agreement to pay property taxes to the municipality, the ultimate liability to pay the property taxes rests with the Landlord."

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 153 - Subsection 153(1) tenant property taxes part of consideration 66
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Consideration municipal taxes paid by tenant are additional rent 66

30 April 1999 Technical Interpretation RITS HQR001701

"... The payment of property taxes by a tenant, pursuant to the terms of a lease agreement, constitutes consideration for the lease of property where the landlord has a joint liability to pay such property taxes."

GST Memorandum 500-7 "Interaction Between the Excise Tax Act and the Income Tax Act," 26 November 1991, para. 67

The portion of the consideration for a taxable supply made by a charity or political party, that can reasonably be regarded as a gift or contribution, is that amount for which a receipt could be issued, or in the case of a donation to a charity, a receipt that could be issued to an individual. The GST is not charged on the portion that is deemed to be the gift or contribution.

Subsection 165(3)

Administrative Policy

GST M 300-7 "Value of Supply" under "Pay Telephones"

General synopsis.