Drug Trading Company Ltd. v. The Queen, [2001] GSTC 48 (TCC) (Informal Procedure) -- summary under Financial Service

The registrant was a wholesaler of products to independent retail pharmacies operating under the "I.D.A." name, and also provided franchisor-like services to them. One such service was to negotiate favourable terms with various banks for credit and debit card services. When a customer made a purchase from an IDA member, the bank would deposit the amount (which it debited to the customer's account) into the registrant's bank account, and the registrant would transfer the full amount of the funds to the member's bank account. However, as the bank charged its "discount fees" to the registrant's account, the registrant in turn debited the members for these amounts - which Bowie J found represented a reimbursement for such fees which it had incurred as the members' agent. In response to a submission of the Justice lawyer that the service which the registrant supplied to the members when it received funds from the banks for the credit and debit card transactions was an administrative rather than financial service (for which it was not a "person at risk" under the Financial Services (GST) Regulations), Bowie J found (at para. 21) that "there is no service to the members that is not a financial, and therefore exempt, service."