Amendments to the Printed Book Rebate – Questions and Answers

From: Canada Revenue Agency

GST/HST Notices - Notice 309
January 2019

On July 27, 2018, the Minister of Finance released draft sales and excise tax legislative and regulatory proposals, which included changes to the printed book rebate. This amendment is included in Bill C-86, the Budget Implementation Act, 2018, No. 2, which received royal assent on December 13, 2018.

Under section 259.1 of the Excise Tax Act, certain public service bodies that are specified persons can claim a rebate of the GST or the federal part of the HST payable on acquisitions and importations of printed books and other specified property. An exception in subsection 259.1(2) generally provides that the printed book rebate is not available if the specified person has acquired or imported the specified property for the purpose of supply by way of sale. The amendments to subsection 259.1(2) clarify that the exception to the printed book rebate applies whether specified property is acquired or imported for the purpose of making a supply by way of sale of the specified property or for the purpose of transferring ownership of the specified property in the course of supplying another property or a service.

This publication provides questions and answers regarding the amendments.

The information in this publication does not replace the law found in the Act and its regulations.

If this information does not completely address your particular situation, you may wish to refer to the Act or relevant regulation, or call GST/HST Rulings at 1-800-959-8287 for additional information. If you require certainty with respect to any particular GST/HST matter, you may request a ruling. GST/HST Memorandum 1-4, Excise and GST/HST Rulings and Interpretations Service explains how to obtain a ruling or an interpretation and lists the GST/HST rulings centres.

If you are located in Quebec and wish to request a ruling related to the GST/HST, please call Revenu Québec at 1-800-567-4692. You may also visit the Revenu Québec website at revenuquebec.ca to obtain general information.

For listed financial institutions that are selected listed financial institutions (SLFIs) for GST/HST or Quebec sales tax (QST) purposes or both, whether or not they are located in Quebec, the CRA administers the GST/HST and the QST. If you wish to make a technical GST/HST or QST enquiry related to SLFIs, please call 1-855-666-5166.

GST/HST rates

Reference in this publication is made to supplies that are subject to the GST or the HST. The HST applies in the participating provinces at the following rates: 13% in Ontario and 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island. The GST applies in the rest of Canada at the rate of 5%. If you are uncertain as to whether a supply is made in a participating province, see GST/HST Technical Information Bulletin B-103, Harmonized Sales Tax – Place of Supply Rules for Determining Whether a Supply is Made in a Province.

Printed book rebate

1. What is the printed book rebate?

Certain public service bodies can claim a 100% rebate of the GST or the federal part of the HST payable on the acquisition or importation of printed books and other specified property.

Currently, the printed book rebate is generally not available if the specified property was acquired or imported to be sold or given away. However, charities and qualifying non-profit organizations whose primary purpose is the promotion of literacy and that are prescribed by regulation (prescribed charity and prescribed qualifying non-profit organization) can claim a printed book rebate if the specified property was acquired or imported to be given away for free.

2. Who can claim the printed book rebate?

A specified person can claim the printed book rebate. For the purpose of the printed book rebate, specified person means:

  • a municipality;
  • a university;
  • a public college;
  • a school authority;
  • a charity, public institution or qualifying non-profit organization that operates a public lending library; or
  • a prescribed charity or a prescribed qualifying non-profit organization.
  • Definitions of these terms are in Guide RC4034, GST/HST Public Service Bodies’ Rebate.

3. What property is eligible for the printed book rebate?

A specified person can claim a printed book rebate of the GST or the federal part of the HST payable on specified property, which means

  • a printed book or an update of such a book;
  • an audio recording all or substantially all of which is a spoken reading of a printed book; or
  • a bound or unbound printed version of scripture of any religion.

For this rebate, printed books do not include certain items such as the following:

  • newspapers;
  • magazines and periodicals that are not purchased by subscription or that have more than 5% of their printed space devoted to advertising;
  • books designed primarily for writing or drawing on;
  • brochures or pamphlets;
  • agendas and calendars;
  • certain directories; and
  • rate books (for example, insurance rate books).

4. How does a charity or qualifying non-profit organization become prescribed by regulation for the purpose of the printed book rebate?

A charity or a qualifying non-profit organization, whose primary purpose is the promotion of literacy, is eligible to claim the printed book rebate if it is prescribed under the Federal Book Rebate (GST/HST) Regulations.

To become prescribed by regulation, send your request – including the name of the organization, its governing documents, and a statement of its purposes and activities – to the following address:

Director
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
11th floor,
320 Queen Street, Tower A,
Ottawa ON  K1A 0L5

We will pass our recommendation on to the Department of Finance Canada, which will make the final determination.

5. Where can I find more information on the printed book rebate?

For more information on the printed book rebate, refer to Guide RC4034, GST/HST Public Service Bodies’ Rebate, and GST/HST Memorandum 13-4, Rebates for Printed Books, Audio Recordings of Printed Books, and Printed Versions of Religious Scriptures.

Amendments

6. What do the amendments change?

The amendments clarify that a specified person is generally ineligible for a printed book rebate where:

  • the specified person has acquired or imported the specified property for the purpose of supply by way of sale; or
  • the specified person has acquired or imported the specified property for the purpose of transferring ownership of the specified property as part of a single supply of another property or service.

For more information on single and multiple supplies, please see GST/HST Policy Statement P-077R2, Single and Multiple Supplies.

7. How do the amendments affect prescribed charities and prescribed qualifying non-profit organizations?

A prescribed charity or a prescribed qualifying non-profit organization cannot claim a printed book rebate if the specified property was acquired or imported for the purpose of making a supply by way of sale of the specified property for consideration. However, a prescribed charity or a prescribed qualifying non-profit organization can claim a printed book rebate if the specified property was acquired or imported to be given away for free.

Pursuant to the amendments, a prescribed charity or a prescribed qualifying non-profit organization is also ineligible for a printed book rebate if it intends to transfer ownership of the specified property in the course of supplying another property or a service for consideration.

8. How do the amendments affect other specified persons?

Other specified persons (that is, municipalities, school authorities, universities, public colleges, and charities, public institutions or qualifying non-profit organizations that operate a public lending library) cannot claim a printed book rebate if the specified property was acquired or imported to be sold or given away.

Pursuant to the amendments, such a specified person is also ineligible for a printed book rebate if the person intends to transfer ownership of the specified property in the course of supplying another property or a service.

9. When do the amendments come into effect?

The amendments apply where GST/HST became payable after July 27, 2018, without having been paid on or before that day.

10. Do the amendments impact the point-of-sale rebate available in the participating provinces for the provincial part of the HST paid or payable on purchases of printed books and other qualifying items?

No, the amendments do not impact the provincial point-of-sale rebates.

Example 1 

A university purchases textbooks in Manitoba on which GST becomes payable and is paid on January 15, 2019. The university intends to provide the textbooks to students as part of an all-inclusive course package. Students who successfully pass the course will obtain credit toward a degree. The textbooks are mandatory and students do not have the option to acquire them elsewhere. Can the university claim a printed book rebate to recover the GST payable on the purchase of the textbooks?

The university is making a single exempt supply of instructing an individual in a course for which credit may be obtained toward a degree. As the university acquired the textbooks for the purpose of transferring ownership of the textbooks to the students in the course of supplying a service, the university is not eligible to claim the printed book rebate.

However, the university may be entitled to claim a 67% public service bodies’ rebate of the GST paid or payable on the purchase of the textbooks. For more information, see Guide RC4034, GST/HST Public Service Bodies’ Rebate.

Example 2

A school authority purchases printed books in New Brunswick on which HST is payable and for which it received a point-of-sale rebate of the provincial part of the HST. The school authority intends to use the books in the school’s library. Can the school authority claim a printed book rebate to recover the federal part of the HST payable on the purchase of the printed books?

Yes, the school authority can claim a printed book rebate of the federal part of the HST payable on the purchase of the books. The school authority did not acquire the books to be sold or given away.  The school authority also did not acquire the books for the purpose of transferring ownership of the books in the course of supplying another property or a service.

The participating provinces of Ontario, Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island provide a point-of-sale rebate of the provincial part of the HST payable on qualifying books. For more information, see GST/HST Info Sheet GI-065, Point-of-Sale Rebate on Books.

Example 3

A prescribed charity purchases printed books in British Columbia on which GST is payable. The prescribed charity intends to give the books away for free. Can the prescribed charity claim a printed book rebate to recover the GST payable on the purchase of the printed books?

Yes, the prescribed charity can claim a printed book rebate of the GST payable on the purchase of the books. The prescribed charity did not acquire the books to be sold for consideration. The prescribed charity also did not acquire the books for the purpose of transferring ownership of the books in the course of supplying another property or a service for consideration.

Further information

All GST/HST technical publications are available at Technical information – GST/HST.

To make a GST/HST enquiry by telephone:

  • for GST/HST general enquiries, call Business Enquiries at 1-800-959-5525;
  • for GST/HST technical enquiries, call GST/HST Rulings at 1-800-959-8287.

If you are located in Quebec, call Revenu Québec at 1-800-567-4692 or visit their website at revenuquebec.ca.

If you are a selected listed financial institution (whether or not you are located in Quebec) and require information on the GST/HST or the QST, go to GST/HST and QST - Financial institutions, including selected listed financial institutions or

  • for general GST/HST or QST enquiries, call Business Enquiries at 1-800-959-5525;
  • for technical GST/HST or QST enquiries, call GST/HST Rulings SLFI at 1-855-666-5166.
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