GST/HST Rulings and Interpretations
Directorate
Place Vanier, Tower C, 10th Floor
25 McArthur Avenue
Vanier, Ontario
XXXXX K1A 0L5
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XXXXX
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February 12, 1998
XXXXX
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Subject:
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GST/HST APPLICATION RULING - XXXXX
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Dear XXXXX :
Thank you for your letter of January 8, 1998, addressed to the XXXXX TIS Centre concerning the application of the Goods and Services Tax (GST)Harmonized Sales Tax (HST) to activities related to the Foundation's annual XXXXX tournament. As we mentioned in a previous correspondence, your letter has been transferred to this office for reply.
Further, as agreed to by XXXXX of your office, we are issuing an application ruling rather than the advance ruling you requested. This is of benefit to the XXXXX our advance ruling would pertain to only this year's activities whereby the application ruling will also apply to subsequent events of this nature provided the facts do not vary significantly (and subject to the disclaimer at the end of this letter).
Our understanding of the facts is as follows.
Statement of Facts
The XXXXX was established XXXXX, 19 xx . It is a registered charity for the purposes if the Income Tax Act and is therefore a charity for GST purposes. The XXXXX is also registered for GST purposes.
The purpose of the XXXXX is to hold annual XXXXX tournaments XXXXX to raise funds which are donated to a variety of charities. The tournament is held XXXXX.
The XXXXX receives revenues from several sources; however, the following describes only the revenue relevant to this ruling request, which is that pertaining to ticket sales.
Individuals and businesses may purchase tickets to attend the tournament. One may either purchase tickets to attend specific days or events or may purchase packages which include admissions to the tournament XXXXX and parking passes.
The tickets are sold XXXXX a limited number of tickets are sold by various charities on behalf of the XXXXX the XXXXX offers various charities the ability to buy a certain amount of tickets at a discount which the charities can resell to raise funds.
The ticket sales made XXXXX are relatively insignificant and are made on a somewhat sporadic basis XXXXX
XXXXX the XXXXX launches its major advertising campaign to sell tickets. This period XXXXX is when the majority of the tickets are sold.
Ruling Requested
Do the ticket sales supplied by the XXXXX for its annual XXXXX tournament represent GST exempt supplies ?
Ruling Given
In accordance with section 3 of Part V.1 of Schedule V to the Excise Tax Act, and subject to the exceptions specified in that section, supplies of most types of personal property or services made by a charity in the course of a fundraising activity are exempt provided the charity does not make (or agree to make) such sales on a regular or continuous basis throughout the year or a significant portion of the year.
Based on the facts set out above, we rule that the sale of tickets by the XXXXX are exempt from GST pursuant to section 3 of Part V.1 of Schedule V.
This ruling is based on our view that, in the circumstances described, the supplies by the XXXXX do not take place on a "regular or continuous basis throughout...a significant portion of the year" as referred to under section 3 of Part V.1, whether or not nineteen weeks is a "significant portion" of the year. That is, since it was not necessary to do so, we have not ruled on whether nineteen weeks is a "significant portion" of the year and, for the same reason, we have not ruled on whether the exemption under section 2 of Part V.1 of Schedule V applies (further facts would be required to so rule).
In reply to other comments from your letter, we would view the period that tickets are sold in the year as the critical period in applying section 3 of Part V.1, rather than the period of the tournament itself.
This ruling is subject to the general limitations and qualifications outlined in section 1.4 of Chapter 1 of the GST Memoranda Series. We are bound by this ruling provided that none of the above issues is currently under audit, objection, or appeal; that there are no relevant changes in the future to the Excise Tax Act, or to departmental interpretative policy; and that you have fully described all necessary facts and transaction(s) for which you requested a ruling.
Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-4157.
Yours truly,
Gabrielle Nadeau
Charities, NonProfit Organizations and Educational Services Unit
Public Service Bodies and Governments Division
GST/HST Rulings and Interpretations Directorate
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Michael Place XXXXX |
Legislative References:
NCS Subject Code(s) R
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