| 24(1) | 5-902578 |
| R.D. Mundell | |
| (613) 957-2139 | |
| 19(1) |
October 30, 1990
Dear Sirs:
This is in reply to your letter of September 17, 1990 concerning the deductibility of the Goods and Services Tax ("GST") portion of tuition fees.
Under subsection 12(1) of Bill C-62, which amends the Excise Tax Act among others, as passed by the House of Commons. on April 10, 1990, the GST is imposed on recipients of taxable supplies at a rate equal to 7% of the value of the consideration for the supply. Taxable supply is defined as a supply that is made in the course of commercial activity but does not include an exempt supply. An exempt supply means a supply included in Schedule V to the Excise Tax Act, as amended by Bill C-62. Educational services are included in Part III of Schedule V.
As GST is not imposed on tuition fees, there is no GST inclusion in the calculation of the tuition tax credit under section 118.5 of the Income Tax Act.
We trust these comments will prove helpful.
Yours truly,
for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch