Section 165

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… .

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."

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.

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.