A branch of the Corporation, a public service body but not a registered charity, operates a second-hand clothing store operated by part-time paid employees and volunteers that only sells donated clothing. The Corporation previously applied to designate the Branch as an eligible small supplier division; however, the Branch was not a small supplier division as its taxable supplies exceeded the $50,000 threshold.
After noting that the sales made by the store were taxable supplies, CRA stated:
[the Branch]’s designation as a small supplier division is no longer effective. [The Corporation] should revoke [the Branch]’s designation as this may cause errors in the future. …
Because [the Branch] exceeded the small supplier threshold, [the Corporation] is a registrant. … Therefore, [the Corporation] must register for GST/HST purposes. Since [the Branch] has not been authorized to file separate returns, the GST/HST that is charged and collected by [the Branch] must be accounted for on [the Corporation]’s GST/HST returns. …
[The Corporation] can apply to have a branch or division (such as [the Branch]) file separate GST/HST returns if the conditions are met. For more information, see Form GST10 … .
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|Tax Topics - Excise Tax Act - Schedules - Schedule V - Part VI - Section 4||sales of donated clothing by an NPO volunteer-operated store were not exempted||142|