Supply

The ARQ assessed the appellant (9154-6093) for its failure to collect and remit QST on its transfer of a condo unit to the couple who were its shareholders for stated consideration. Alcindor JCQ accepted that the transfer was made to them for the purpose of obtaining mortgage financing on the unit and that they acquired the unit as nominees for 9154-6093 (so that not QST was payable), stating (at paras. 123-124, TaxInterpretations translation):

[D]espite the assignment, 9154-6093 rented Unit 54 to third parties, declared the income from such rentals, and collected the taxes and remitted them to Revenu Québec. …

Just before the sale of the Unit in October 2019 [the shareholders] retroceded the building to 9154-6093, which collected and remitted the GST and QST [on the sale] … to Revenu Québec.

She further stated (at para. 129) that in light of this reporting of the 2019 sale:

[A]llowing Revenu Québec to recover QST on the 2009 transaction means that 9154-6093 is remitting QST twice on the same housing unit. … [T]his runs counter to both Revenu Québec's role and tax policy in this regard.

Bell Canada was required as a result of ETA s. 236.01 and the related regulation to recapture 100% of the input tax credits that it claimed in respect of the 8% Ontario HST that it paid on the consideration for the supplies to it in Ontario of electricity. The suppliers to it of such electricity (the “Local Distributors”) were required by law to itemize charges on their invoices to show four categories of items: electricity, delivery, regulatory charges and debt retirement charge. Bell Canada submitted that, rather than receiving a single supply of electricity, it received multiple supplies of electricity, delivery services and regulatory services, so that the electricity component (subject to recapture) was reduced.

In rejecting this submission, D’Arcy J stated (at paras. 123-125):

In substance and reality, the alleged separate supplies of the delivery services and regulatory services are integral parts, integrants or components of the overall supply of electricity. The supply to the Local Distributors of the transmission services and the regulatory services is work of a preparatory nature to the supply of the electricity. Similarly, the costs that the Local Distributors incur in distributing the electricity relates to work of a preparatory nature to the supply of electricity. As … noted in City of Calgary, such supplies are parts or components of the single overall supply of electricity.

Dr. Axelrod, a dentist, provided dentures, bridges, crowns and implants and reconstruction materials for more than half of a tooth, which the parties agreed constituted artificial teeth within the meaning of Sched. VI, Pt. II, s. 11. Dr. Axelrod took the position that when he provided an artificial tooth to a patient, he was making a zero rated supply under that provision. CRA reassessed him on the basis that he was making the supplies of artificial teeth, as acquired by him from the laboratory, to the patients as zero-rated supplies pursuant to Sched. VI, Pt. II, s. 11, and making supplies of services (regarding diagnosis, preparation work (such as measuring and taking impressions) and installation) that were exempted pursuant to Sched. V, Pt. II, s. 5. Sommerfeldt J instead found that Dr. Axelrod was making a single supply of exempt services pursuant to Sched. V, Pt. II, s. 5, so that his appeal was dismissed.

Before so finding, Sommerfeldt J first found that Dr. Axelrod was making a single supply to such patients, stating (at para. 30):

It is difficult to imagine that a patient of Dr. Axelrod would have wanted to acquire dentures, a bridge, a crown or an implant without Dr. Axelrod having first done all of the preliminary work necessary to ensure that the particular prosthesis would fit and function properly in the patient’s mouth, and without Dr. Axelrod actually installing the prosthesis in the patient’s mouth. Similarly, all of the dental services rendered by Dr. Axelrod would have made no sense if they had not related to the prosthesis desired by the patient. To use the language of O.A. Brown, both the supply of the prosthesis and the supply of the dental services were integral parts or components of the overall supply. … It is even more evident that all aspects of Dr. Axelrod’s reconstruction, in a patient’s mouth, of a significant portion of a tooth, using appropriate filling or restorative materials, were integral components of a composite supply.

Prior to the October 30, 2007 announcement of the GST rate reduction from 6% to 5%, a builder agreed with numerous buyers to sell them (on a GST-included basis) condo units in a project that had not yet received site plan approval or a building permit. The transitional provision indicated that the reduced rate applied inter alia “to any supply … made on or after January 1, 2008.”

In concluding that there were supplies of real property under the agreements that occurred prior to 2008, so that the 6% rate applied, D’Arcy J. found:

• That there was a supply at the time each agreement was entered into on general principles given that such agreement gave the buyer a conditional right to acquire a specific (albeit, so far, non-existent) condo and: “This was the provision of something and thus constituted a supply.” (para. 45)
• In any event, ETA s. 133 (which, in approximate terms, deems supplies of property to occur when the agreement for their supply is entered into) deemed the agreements to be supplies of the condos, noting in this regard that “[t]he application of section 133 is also not contingent on the existence of the Condo Units at the time the parties entered into the … Agreements … .” (para. 58)

A UK bingo club operator was subject to VAT, not on its gross sales proceeds for access to its sessions of games, but only on the net sum retained after deduction of winnings. HMRC issued a notice stating that bingo promoters who (like the taxpayer) had been calculating this net sum on a game-by-game rather than session-by-session basis, could make a claim for having overpaid VAT, which the taxpayer did. (A game-by-game calculation produced more tax because a negative net take on a game could not be deducted from the positive net take on other games.) However, it was precluded by statute from going back more than three years with its refund claims – but there was no such time limitation where a repayment of VAT was claimed based on there being “a decrease in consideration for a supply.”

Before rejecting the taxpayer’s argument that its change in calculating the consideration for its supplies involved a “decrease in consideration,” so that it could go back more than three years, Lord Legatt stated (at para. 30) that it was “clear that there can be only one correct method of calculating the taxable element of fees charged to customers for playing cash bingo and … this was the session by session method and not the game by game method.” Since there was only one correct method, on this basis as well the taxpayer’s claim that its switch in method entailed a decrease in the consideration payable by it foundered. In this regard, he stated (at para. 39):

I recognise that the fact that a single composite price is charged is not decisive and there may be cases in which it better reflects commercial reality to regard customers who pay a single price as intending to purchase two or more distinct services … . However, in the present case I can see no reason - and none has been advanced - for going behind the pricing policy adopted by the taxpayer and treating the fee charged to participate in a session of bingo as if it were a bundle of separate fees charged for the rights to play separate games. On the contrary, such a division would fail to reflect the commercial reality that what a customer purchases and intends to purchase is the right to play all or any of the games which make up the session as he or she chooses.

In 2004, the parent company (“Avir”) of San Domenico Vetraria SpA (“SDV”) seconded one of its directors to SDV and, in return, SDV paid Avir the wages costs of the director plus VAT. The Italian tax authorities rejected SDV’s claim to recover VAT on the grounds that, the Italian VAT legislation provided that:

The lending or secondment of staff in respect of whom only the related cost is reimbursed shall not be regarded as relevant for the purposes of [VAT].

Article 2 of the Sixth Directive provided:

The following shall be subject to [VAT]:

1. the supply of goods or services effected for consideration within the territory of the country by a taxable person acting as such …

“Supply of services” was defined as “any transaction which does not constitute a supply of goods… .”

The Italian Supreme Court of Cassation referred the question of: whether the Sixth Directive preluded the above-quoted Italian VAT provision.

In finding that such provision was indeed precluded, the 7^th Chamber stated (at paras. 21-25):

21 …[A] supply of services is effected ‘for consideration’ within the meaning of Article 2, point 1, of the Sixth Directive, and hence is taxable, only if there is a legal relationship between the provider of the service and the recipient pursuant to which there is reciprocal performance, the remuneration received by the provider of the service constituting the value actually given in return for the service supplied to the recipient. That is the case if there is a direct link between the service supplied and the consideration received … .

22 In the present case, it appears from the documents before the Court that the secondment was carried out on the basis of a legal relationship of a contractual nature between Avir and San Domenico Vetraria.

23 Furthermore, it appears that, in the context of that legal relationship, there was reciprocal performance, namely the secondment of a director from Avir to San Domenico Vetraria, on the one hand, and the payment by San Domenico Vetraria to Avir of the amounts invoiced to it, on the other.

24 The Commission disputes, however, the existence of a direct link between those two services, arguing that, in the absence of a requirement for remuneration higher than the costs borne by Avir, the secondment at issue in the main proceedings did not take place with the aim of receiving consideration.

25 That argument cannot be accepted.

Under an agreement between the appellant (CIBC) and Aeroplan, as the successor to Air Canada (“AC”) (the “Agreement”), Aeroplan agreed to provide CIBC credit card holders with membership in the Aeroplan Mile program and credit Aeroplan Miles to such members, with the result that the Cardholder would generally earn one Aeroplan Mile for each dollar of purchases charged to the Cardholder's Visa AeroCard account. Aeroplan would then invoice CIBC for the Aeroplan Miles credited to the Cardholder. The Cardholder would subsequently redeem the Miles in exchange for the acquisition of property or services chosen from a menu. The Agreement provided that the fees of AC were payable by CIBC “in consideration of AC referring or arranging for Aeroplan members and other members of the public to make Card Applications and in consideration of AC performing its other obligations herein which are incidental to the foregoing.”

In finding that AC made a single supply under the Agreement, Visser J stated (at para. 30):

[T]he individual elements of the Aeroplan Supplies are highly interconnected and each forms an integral part or component of the overall supply of the Aeroplan Mile Program by Aeroplan to CIBC. …[T]here is no evidence that CIBC would have been prepared to pay consideration to Aeroplan for any of the separate elements on their own, and Aeroplan issued invoices to CIBC in respect of its “participation in the Aeroplan Program” for each of CIBC’s credit cards, generally computed with reference to the number of Aeroplan Miles issued during the relevant billing period.

A corporation (MC) acted as a property manager for the rental properties of 10 corporations (the “Owners”) with which it did not deal at arm’s length in consideration for a percentage of the rents and other gross revenues that it collected. In addition to some of the more usual features of a property management agreement (which in this case were labelled “Joint Venture Agreements”), most significant decisions respecting their “joint venture” was required to be approved unanimously by a management committee consisting of a representative of each of MC and the Owner. MC took the view tht its share of the gross revenues was not consideration for a taxable supply made by it to the Owners. The Crown took the view that there was no joint venture on the four grounds (taken from its Westcan listing of JV criteria) noted below (with Russell J’s finding noted after each):

MC did not have a joint property interest in the subject matter of the venture:

• Its right to a share of the revenues was a property interest in the venture.

MC had no right of mutual control or management of the enterprise:

• This was present in the joint management committee. Sales (as contrasted to leasing) were outside of the purview of the JV so that it did not matter that MC had no say on sales.

MC had no expectation of profit (or of “adventure”):

• It was entitled to a percentage of the rents and other gross income.

MC had no right to participate in the profits:

• Again, it was entitled to a percentage of the gross operating revenues, and the fact that it would not share in any gain on sale did not matter as “any sale of a Property simply was beyond the scope of the JVs as asserted in this case.”

Accordingly, the property management relationship qualified as a JV, and there was no requirement on MC to collect GST/HST on its share of the revenues.

The CIBC issued Visa credit cards and utilized a credit card payment system operated and managed by Visa Canada. Visa Canada essentially acted as a largely automated go-between between the “issuer,” who provided the funds for a purchase at a merchant by a cardholder, and the “acquirer,” who used such funds to pay the merchant. In finding that Visa Canada was making a single composite supply to CIBC, Rossiter CJ stated (at para 73):

[I]t is the end result of the services which Visa provides, which is the facilitation of the transactions between CIBC, CIBC customers, merchant acquirers and participating merchants that constitutes the supply that is being provided by Visa to CIBC. The other elements of the supply …are peripheral elements that can more accurately be described as being inputs in the creation of the final end product, which is a payment platform which allows Visa to facilitate the transactions between issuers, acquirers and merchants.

The appellant was a non-share not-for-profit corporation that operated, as part of a regime governed by the Waste Diversion Act, 2002 (Ontario), an Ontario program for recycling “MHS Waste” such as paints, solvents, batteries, empty propane tanks and antifreeze. The appellant collected the waste (through, for example, municipal collection sites, return-to-retail sites, mobile collection depots and incentive programs) and paid for its transport and processing or disposal. “Stewards,” being persons who had a commercial connection with such waste, were statutorily responsible for paying fees to the appellant to reflect their reasonable share of the associated costs.

In finding that the appellant was making taxable supplies, D’Arcy J first stated (at para. 88) that it was “providing something,” which was “the service of collecting, recycling and/or safely disposing of the MHS Waste (the “Recycling Services”),” and that (para. 89) it “provide[d] the Recycling Services to the persons who physically possessed the MHS Waste prior to its collection by the Appellant and to the MHSW Stewards, who … had a statutory obligation to incur the cost of collecting and recycling the MHS Waste.”

In rejecting the Crown’s argument that the appellant was not making supplies but instead merely performing a statutory duty, he stated (at para. 91):

…[T]he only question that is relevant when determining whether a person made a supply is whether the person provided something. The reason why a person provided the something is irrelevant… .

In any event, the appellant was providing the Recycling Services pursuant to an agreement with the Stewards.

The operator of a soccer stadium had been found to be making a single supply of tours notwithstanding that participants were entitled at the conclusion of their tour to visit an on-site museum free of additional charge. The ECJ found that this single supply was subject to the general rate of VAT rather than in part being eligible for the lower VAT rate applicable to museum admissions, notwithstanding that the separate value of the two components of the supply could be readily identified.

The relevant companies in the ING group ("IDUK") carried on a retail banking trade which comprised taking cash deposits from private individuals, who were provided with a 24-hour telephone and internet banking service. Expenses IDUK incurred in its deposit-taking activities included significant expenditure on advertising campaigns, construction of a head office and two call centres, IT systems and services and employment of staff, including recruitment costs. The taxpayer wished to recover (via deduction against the outputs of a separate investment business) a proportion of VAT expenses incurred in connection with the deposit-taking business. It contended that this did not involve any VATable supply at all.

Arden LJ stated (at paras 11 and 12):

...BLP Group … held that to take out a loan does not involve a VATable transaction by the borrower at all, even if he pays interest: he is the mere recipient of a service provided by the lender… .

By contrast, banking business is an exempt business. Article 135 PVD provides that member states must exempt … "(b) the granting and the negotiation of credit and the management of credit by the person granting it;" and "(d) transactions, including negotiation, concerning deposit and current accounts, payments, transfers, debts, cheques and other negotiable instruments, but excluding debt collection;…". It follows that inputs are irrecoverable.

Arden LJ further stated (at para 18):

In the FTT, Judge Mosedale made clear findings that IDUK provided banking services. She specifically held that the banking services were not peripheral to its deposit-taking business. …

She concluded (at para 61):

… I would dismiss this appeal. IDUK's deposit-taking business constituted the exempt business of banking services.

Campbell J found that an incorporated orthodontic practice was making a single supply of exempt orthodontic health services rather than (as argued by it) two supplies comprised of a zero-rated supply of medical equipment (the orthodontic appliance) and of exempt orthodontic services (e.g., adjustment and maintenance services). (Zero-rating would have generated input tax credits.) She stated:

Neither the appliance nor the service on their own can achieve the patient’s goal or objective of correcting or treating their dental issues.

The manager of various mutual funds (the “Funds”) agreed to relinquish its receipt of a portion of the management fees which it otherwise would have earned (calculated as a percentage of the net asset values from time to time of the funds) and the Funds agreed to pay the same percentage amounts to a special purpose non-resident Citibank-formed vehicle (“Funding Corp”) in consideration for Funding Corp paying the brokerage commissions that were payable on subscriptions by investors for units (or shares) of the Funds. Funding Corp then immediately sold its fee-amount entitlements to Citibank.

Before going on to find that the amounts of the fees so assigned to Funding Corp were deemed by paragraph (q) of the “financial services” definition to be taxable consideration, V.A. Miller J found that Funding Corp was making a single compound supply whose “dominant element…was the daily payment of the [brokerage commissions]” (para. 95), and (at para. 101) that this dominant element would have been included in para. (a) of the financial service definition but for the exclusion under para. (q).

A company (“Persepolis”), which had been incorporated to do renovation work on a cost plus 15% basis on a building owned by a corporation whose shareholder was friends with its sole shareholder, was found not to have incurred its renovation costs as agent for that owner in the absence of convincing evidence that the owner “had implicitly accepted an agency relationship with respect to the renovations.” Accordingly, Persepolis had been correctly assessed for failure to charge HST to the owner on the costs incurred by it.

A Hungarian company was set up to assist Hungarian farmers by lending them money to fund the purchase by them from it of current assets needed in their business. The European Court of Justice (subject to some further findings of facts to be made by the local court) essentially applied the single supply doctrine to find that the loan interest was part of the consideration for the sale of products by the company to the farmers, so that the interest was subject to VAT (even though, of course, interest on loans viewed as being for a separate supply was VAT-exempt). The Court was influenced by the facts that the loan could only be used to fund the purchases from the company (which was their sole purpose), and that the company was not authorized to make loans to anyone other than farmers.

The members of the Appellant (which was a non-share Delaware corporation resident in Canada) included Canadian and U.S.-resident individuals who had been sold “Resort Points,” which could be periodically applied under a booking system to obtain access to particular resort condo units ("Vacation Homes") beneficially owned by the Appellant in Canada, the U.S. and Mexico. The Appellant paid various expenses respecting the Vacation Home operations which it recovered through “Annual Resort Fees” charged to its members.

In rejecting the Appellant’s submission that it “made, in consideration of the Annual Resort Fee, separate single supplies of services in respect of each Vacation Home,” D’Arcy J stated (at para. 259):

It made a single supply by agreeing to use the Annual Resort Fee to fund its operations…with the consideration being based upon the Appellant’s total estimated costs. The Appellant could only continue to operate the Intrawest Program if it incurred all of the costs…; it could not cherry-pick certain costs.

NEC sold tickets on behalf of third parties to various trade, sporting and concert events held by them at the National Exhibition Centre. Where the customers paid by credit card, NEC increased the ticket prices by about 10%, and retained this amount as a booking fee.

The U.K. Upper Tribunal (Tax and Chancery Chamber) referred a question to the European Court of Justice as to the principles to be applied in determining whether the card processing services of NEC came within Art. 13B(d)(3) of the Sixth Directive, which directed the exemption of “transactions, including negotiation, concerning deposit and current accounts, payments, transfers, debts, cheques and other negotiable instruments… .”

Before answering this question, the Court questioned the implicit assumption in the question that the NEC booking fees were consideration for a separate supply, stating (at paras. 18, 23):

The Court, however, has already held that the additional charges invoiced by a service provider to its customers, where the latter pay for those services by credit card, debit card, cheque or cash over the counter at a bank or authorised payment agent acting on behalf of that service provider, do not constitute consideration for a supply of services distinct and independent from the principal supply of services in respect of which that payment was made (see…Everything Everywhere...Case C‑276/09…).

[I]t is for the referring court to ascertain whether, in the main proceedings, the NEC’s card processing service must be considered for VAT purposes to be a service which is ancillary to the sale of the tickets concerned or as a service ancillary to another principal service which is provided by the NEC to the purchasers of those tickets, which could be the reservation or the delivery of tickets for shows or other events and, therefore, forming with that principal service a single service with the result that that service must share the tax treatment of that principal service (see…Card Protection Plan…Case C‑349/96…[and] Wojskowa Agencja Mieszkaniowa…Case C-42/14…).

The appellant ("Telus") operated a wireless carrier business which entailed providing roaming airtime ("RAT") services to customers, with Canadian billing addresses, who while in the U.S. made long-distance call to Canada. These calls essentially involved two steps, which were separately identified in the Telus billings:

• The customer's phone connected with a local cellular site, and then to a mobile telephone switching office ("MTSO").
• The MTSO connected the call to the Canadian recipient.

C Miller J found that Telus was required to charge GST on the fees it collected for both steps (rather than only the second step). As both steps constituted a single supply, that supply was deemed by s. 142.1(2)(b)(ii) to be made in Canada as that telecommunication service was received in Canada. After discussing Gestion Alger, BC Ferry and Jema, and after noting (at para. 27) that although "the RAT can be used independently of long distance charges, and therefore has a commercial efficacy as a standalone supply…that is only in the context of locally made calls" in the U.S. rather than calls from the U.S. to Canada, he stated (at paras. 35-36):

[The] integration approach, I believe, remains the essence of the single versus multiple supply. …Viewing the telecommunication service offered by Telus as a service of communication for customers to talk to another person, how that service is delivered is more akin to the delivery of pizza than provision of a separate stateroom service or vaccination service. The customer is simply paying to be able to make a call from his cell phone to Canada. The RAT and long distance service are fully and seamlessly integrated into making that happen.

Before finding that leases entailed a continuous supply by the lessor including, in this case, by a subsequent lessor by virtue of the purchase of apartments already subject to the leases, the Court stated (at para. 35):

Federal Commissioner of Taxation v Qantas Airways Ltd [(2012) 247 CLR 286, [2012] HCA 41] shows that it is wrong to consider that one transaction must always involve the making of just one supply. It is similarly wrong to consider that the making of a supply must always involve the taking of some action on the part of the supplier.

See summary under s. 133.

The appellant was denied input tax credits, in part, based on the supply by it of staterooms to passengers travelling on ferries (for which it made separate charges but did not charge GST) was part of the single supply of the ferry service. In allowing finding that there was a separate supply of the rental of the staterooms, Campbell J stated (at para. 65):

Common sense dictates that the provision of ferrying services remains a useful and valuable supply minus the rental of staterooms. Staterooms are not an essential component to the overall supply of transportation services. In fact, there are insufficient numbers of staterooms to accommodate every passenger, even if all of the passengers on any route wished to purchase a stateroom.

The appellant delivered pizza through self-employed individuals acting as its agents. The costs of the pizza and delivery were separately itemized. In finding that there was a single supply, Paris J stated (at para. 37):

[T]here were two ways of obtaining the food: go to the appellant's establishment in person or place an order for delivery. In the first case, the food was made available to the customers while at the restaurant. In the second, the food was made available to the customers upon delivery. What differs is the manner in which the supply was made available to the customers. As for the interconnection and separation of elements, it is clear that it was possible to obtain the food without delivery. However, to obtain delivery without food is simply illogical. By separating the two elements, such that all that remains is the delivery, a viable and useful service or property cannot be obtained.

Before going on to find that the appellant ("Caithkin") was not making exempt supplies of foster care services to Children's Aid Societies (see summary under s. 2 of Part IV of Sched. V), Graham J found that Caithkin was making a "re-supply" to the Societies of "care, supervision and place of residence services" that it in turn "acquire[d] from the foster parents" (para. 24).

The appellant entered into 14 purchase agreements with a property developer to acquire lots. The appellant assigned 12 agreements to third parties for $820,865 - $634,760 for deposit recoveries (i.e., reflecting that deposits paid by the appellant to the developer would now be held by the vendor to be credited to the assignees on completion of the purchases) and $186,105 in assignment fees. The Minister applied the single-supply doctrine to treat the entire amount as consideration for an interest in real property.

Hogan J granted the taxpayer's appeal. He discussed (at paras. 13-14) the indicia in O.A. Brown, that "a factor indicative of a single supply is the degree of interconnection and interdependence of the elements" and that "conversely, a factor indicative of multiple supplies is that each alleged separate supply could be purchased individually," and referred favourably to the analysis in Barnett 2011. The assignment of the purchase agreements and of rights to the deposits were not inextricably linked, as it would be quite possible to structure a sale where there was no assignment of the deposit and the assignee gave a fresh deposit to the property developer. Accordingly, there were two supplies: of a financial instrument and of real property. Alternatively, "a deposit can be characterized as a pool of money retained until such time as it is applied in partial payment or forfeited" (para. 32), and a supply of money is not a supply of property or a service under the ETA. Either way, the consideration paid for the deposit recoveries was not taxable.

The appellant provided advice to persons traveling outside of Canada respecting vaccinations that should be obtained before traveling to certain countries, and also provided those vaccines. No vaccination was given without first having a consultation, which could in fact result in no vaccination being necessary. In finding that the appellant made separate supplies of consultation and vaccination services, D'Arcy J stated (at paras. 35-36):

[A] person may attend at the clinic and the nurse may determine that he or she does not require any vaccines. The supply of the consultation has been made, but there is no supply of a vaccine. In other words, a supply of the vaccine is not required to make a supply of the consultation. …

…In addition, the supply of the consultation is a useful service even if a supply of a vaccine is not made.:

A Canadian airline ("CAIL") entered into an agreement with the appellant ("RBC") to promote use of RBC's credit card and to honour frequent flyer points to be awarded by it to RBC at the rate of one Point for every dollar of qualifying credit spending. In finding that such payments by RBC were the consideration for a taxable supply by CAIL of Points, Hershfield J stated (at para. 28):

Everything CAIL did from being involved in establishing the terms of the credit facility to advertising the program was to promote the use of the card by the issuance of Points and that is what it was paid for – the issuance of Points.

By contrast, in Customs and Excise Commissioners v. Civil Service Monitoring Association, [1998] BVC 21 (Eng. CA), where the participation of an automobile association in a credit card program was found to be exempt because the association was involved in the design and operation of the program, "the substantive element and real character of the supply…was to arrange favourable, special credit terms and benefits for its members from the financial institutions granting the credit facility….[and] there was no other supply, like a supply of Points" (para. 35).

The appellant (“Libra”) carried on a truck transport business at volumes which exceeded the capacity of its own four rigs, so that it contracted with over 20 subcontractors, who owned their own rigs and operated them under the Libra umbrella. As Libra could obtain insurance at more favourable rates, it arranged coverage for the various vehicles, with the premiums broken down on a vehicle by vehicle basis, and recovered the premiums from the subcontractors on a monthly basis. Highway transport licences were handled on a similar basis.

Bowie J stated (at para. 13):

[O]nly an insurance company licensed to do so may sell insurance, and only a provincial government may sell motor vehicle licences…

He also did not agree that separate consideration needed to be received for the insurance and licences, stating (at para. 14):

I know of no reason that would prevent [Libra] from supplying its services as an agent to obtain licences and insurance along with other services for a single consideration.

Vanex Truck Service was distinguished (at para. 17) on the basis that :

[W]hat Vanex supplied to the drivers was the right to drive their vehicles with the benefit of licences and insurance for which it had paid…[and] the Appellant does not appear to have advance an argument based on agency in that case.

The registrant served retail travel agencies by booking and purchasing airline tickets for the agencies' customers, which resulted in the receipt by it of commissions from the airlines. If the customers cancelled or revised their travel plans, the travel agencies were liable to pay an amount to the registrant, indicated as a penalty, cancellation charge, or, where appropriate, a replacement charge (collectively, the "cancellation charges").

Archambault J found that the registrant was obligated to collect GST on the cancellation charges on the basis that the fees arose from a taxable supply of services. After noting that the registrant's usual business model was to earn commissions from the airlines on ticket sales, Archambault J stated:

However, if no ticket is issued by the airline, Skylink is not entitled to a commission. And yet Skylink has provided services: it has done the necessary searches in the airlines; reservation systems and made a reservation. ... Regardless of whether that payment be charcterized as cancellation charges, penalty or replacement charges, its true nature is remuneration for services which Skylink has provided to the retail agencies.

Doctors who personally administered drugs (e.g., vaccines) or other medical devices (e.g., contraceptive devices) to a patient were found to be making a single supply of a medical service to the patient rather than a separate zero-rated supply of the drugs or devices. Lord Hoffmann noted that in considering the question of whether transactions should be regarded as a single supply or as two or more distinct supplies, it should not be necessary to go back any further than the Card Protection case ([1999] 2 AC 601), and upheld (at p. 92) the finding of the VAT Tribunal that

Applying the guidance provided by the Court of Justice in the Card Protection case ... the personal administration of drugs to the patient by a doctor was merely ancillary to his supply of exempt medical services.

The appellant ("CTM") sold mortgage loans made by it to securitization trusts and serviced the sold mortgages including collecting and accounting for payments, and dealing with renewals and defaults. It did not explicitly charge the trusts for these services, but recorded fees from such services in its financial statements. In finding that there was a single supply of a financial service by CTM (failing which, the rule in s. 138 or 139 would have applied), Bowman ACJ stated (at para. 20):

Here we have a sale of mortgages of which the servicing is not only an integral part but is requisite as a matter of commercial exigency. … For someone other than CTM to service the mortgages would, as a practical matter, be commercially infeasible and would be inimical to the raison d'être of the transaction.

The sale of serviced lots by a municipality, with a separate (as to 94% of the total consideration) municipal infrastructure charge was found to entail two supplies (the sale of land, and the provision of infrastructure services) given that land could have been sold independently of the installation or repair of sewer and water systems and given that the breakdown between the two charges appeared clearly in the sale contract.

The registrant was found to be making a single supply of institutional health care services to residents of a nursing home.

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." There was a separate supply consisting of the delivery of the bulbs from the taxpayer to the Royal Mail under a distinct contract between those two parties. However, under the contract between the customer and the taxpayer, arranging the delivery was ancillary to making the bulbs available; and what the customer wanted and what the taxpayer agreed to provide was bulbs delivered to the home. Accordingly, in reality, the sum paid by the customer was for one supply of delivered bulbs.

Fees which the Appellant received from credit cardholders were found to be consideration for a single supply of insurance services. After quoting the statement in Customs & Excise Commissioners v. Madgett, [1998] BTC 5440 that "a service must be regarded as ancillary to a principal service if it does not constitute for customers an aim in itself, but a means of better enjoying the principal service applied", Lord Slynn found (at p. 5090) that:

"If one asks what is the essential feature of the scheme or its dominant purpose, perhaps why objectively people are likely to want to join it, I have no doubt it is to obtain a provision of insurance cover against loss arising from the misuse of credit cards or other documents."

Various other services the cardholder was entitled to receive related to the administration of the scheme and were "ancillary or incidental to the main objective of the scheme, i.e., financial protection against loss".

The surrender of hand guns by the taxpayer to the government and the receipt of compensation therefor constituted a supply for consideration given that there was a transfer of title to the government.

The registrant, which was a livestock marketing agency, was found to be making a taxable supply of storage services rather than a zero-rated supply of feed when it provided through-load services to transporters of cattle as contemplated by section 148 of the federal Health of Animals Regulation, which provided that cattle could not be confined in a railway car for longer than 48 hours but, rather, must be unloaded for a period of not less than five hours into a suitably covered pen provided with straw, feed and water.

Sarchuk TCJ. noted (at p. 87-5) that "a through-load customer does not have the option of acquiring any of the particular elements of the service provided by the appellant separately, rather the provision of a particular element is entirely contingent on the provision of all the other required elements". As a separate matter, the registrant would agree with auction customers to store cattle, which they had purchased, at charge of $1.50 per day per head. It was found (in light, inter alia, of evidence that the charge was $2.50 per day per head in the case of third parties who had not purchased cattle) that in substance all of this charge related to the provision of feed to the cattle and, therefore, was zero-rated.

The appellant, which was a residential drywall contractor, was found not to be making supplies to unregistered subcontractors, who performed drywalling services, when it credited charges for various materials it had purchased and made available for use by them, against the amount that they otherwise were entitled to received for their services. McArthur TCJ. accepted the appellant's submission that the subtrades did not receive legal or beneficial ownership of the materials, nor did it have the right to sell the materials or use them on a job for a customer other than the appellant's.

BLP was a management holding company which provided services to a group of trading companies producing goods for use in the furniture and DIY industries. In 1989 it bought the share capital of a German company, and in June 1991, when BLP' s financial position had become worrying, it sold 95% of the shares of the company. The money raised by the sale was used to pay off BLP' s debts. In its relevant VAT return, BLP deducted the VAT paid on three invoices for professional services supplied to it by merchant bankers, solicitors and accountants respectively, in connection with the share sale.

In finding that taking out a loan did not involve a VATable transaction by the borrower at all, even if it pays interest (it was the mere recipient of a service provided by the lender) the Court stated (at para. 47):

The taking up of a loan and the selling of an interest in a company are not … operations of the same type for the purposes of the VAT system — nor are they, moreover, for an undertaking's operational purposes, since the income from the sale of shares is part of the undertaking's own resources, whereas the loan is part of its borrowed resources — because that system focuses on transactions and makes a clear distinction between taxable and exempt transactions. If a taxable person sells an interest in a company, he is effecting an (independent) transaction within the meaning of the common VAT rules which, being an exempt transaction, excludes deduction of the incident input tax. If, by contrast, he takes up a loan, he does not himself thereby effect a transaction within the meaning of those rules. Instead he is the recipient of a service, which is the subject of a transaction by a third party. Under those circumstances the input tax charged on the advisory services supplied in connection with taking up the loan may be deducted, if it is attributable to taxable transactions.

The appellant provided limousine services at no extra charge to purchasers of first class tickets on its international flights. Before finding that the full ticket price was zero-rated as being in respect of the "transport of passengers ... from a place within to a place outside the United Kingdom or vice versa", Turner J. noted (at p. 5084) that it was permissible to consider the practical difficulties which would be thrown up" if the alternative interpretation was correct and (at p. 5085) that "while it may be fairly be said that the limousine service was physically separate from the flight it was not, without great difficulty, 'economically dissociable' from the price paid for the package offered by Virgin to its Upper Class passengers".

The appellant fed, inoculated and branded cattle it had bought, and then sold the livestock to its customers with separate charges being made for its disbursements and a "clearing commission". The Crown assessed on the basis that the appellant was selling two things, livestock and a service, with the service not being zero-rated. In finding that there was a single zero-rated supply, Rip TCJ. stated (at p. 40-8):

"The alleged separate supplies cannot be realistically omitted from the overall supply and in fact are the essence of the overall supply. The alleged separate supplies are interconnected with the supply of livestock to such a degree that the extent of their interdependence is an integral part of the composite whole ...".

In considering a marketing agreement which provided that property in goods which were manufactured by the Philips group of companies for export should pass to the taxpayer (an affiliated company) either immediately before delivery to the overseas customer or immediately before title passed to the overseas customer, Roch J. disagreed with a finding of the tribunal that in order for there to be a "supply of goods" title must rest with the transferee for a measurable length of time.

In finding that a parent corporation was making a taxable supply of the services of its employees to its subsidiary, Slade L.J. stated (p. 5084):

"If A agrees with B that B will perform certain services for A and that he will reimburse B for certain specified expenses which will be incurred by B in the performance of both services, the agreement to reimburse is, in my judgment, well capable of constituting sufficient consideration in law for those services. The bargain may be a bad one from B's point of view, but the courts do not enquire into the monetary adequacy of consideration."

Upon paying for membership in the Automobile Association, a member was considered to be paying not for the mere privilege of membership but for the benefits that a member received under his contract with the Automobile Association and, accordingly, the subscription price is apportionable among those services and facilities received by each member.