Published | Category: GST and QST
Online supplies of a “service of instructing” individuals in a course or of administering examinations in respect of a course may be GST- and QST-exempt if the following conditions are met:
- The service is not zero-rated.
- The service is provided by a government, a school authority, a vocational school, a public college or a university.
- The service is a service of instructing individuals in, or administering examinations in respect of, courses leading to certificates, diplomas, licences or similar documents, or classes or ratings in respect of licences, that attest to the competence of individuals to practise or perform a trade or vocation.
- The supplier has not filed form FP-2029-V, Election or Revocation of an Election by an Organization to Have the Supply of Its Courses, Examinations and Certificates Deemed Taxable.
In order to determine whether an online supply is exempt, you must first determine whether it is a supply of a service or of intangible personal property.
Service of instructing individuals
The following generally indicate that a supply constitutes a service of instructing individuals:
- The activity involves the provision of systematic instruction.
- The supplier monitors or supervises participants' progress or learning.
- The supplier assesses participants' progress during the course of the activity and provides ongoing support, feedback and guidance.
- The supplier may be available to assist participants with the subject matter at a time and location different from the time and place in which the activity occurs.
- The supplier assesses participants' competency upon completion of the activity by requiring them to formally demonstrate the knowledge they have acquired, and the activity may have to be repeated if the competency is not achieved.
- Participants are required to invest time and effort outside of the activity (for example, completing assignments or reading course material).
- The supplier may require successful completion of recognized prerequisites (for example, where participants must complete an introductory computer courses before taking intermediate computer courses).
- Participants may be required to successfully complete the activity before being permitted to participate in another activity.
- The activity is part of a series of activities leading to a formal recognition of skills.
- The activity may be part of a program that consists of a series of two or more related activities.
- The activity occurs at set intervals over an extended period of time (weeks or months).
- The activity does not include the provision of rights or if there is a provision of rights they are incidental to or part of a single supply of a service (for example, right to use library facilities).
- The subject of the activity is broad (for example, Canadian History).
- The supplier advertises or promotes the activity as instructing participants.
- The activity is promoted alongside others in a prospectus or calendar prepared by an educational institution.
- The promotional material indicates that the activity is part of a broader program which may lead to a formal recognition of skills.
- The promotional material is aimed at individuals who possess the prerequisites for participating in the activity.
Where none of the above apply, the online supply of the service is not a supply of a “service of instructing”.
Intangible personal property
Conversely, the following generally indicate that a supply is not a supply of a service of instructing but rather a supply of intangible personal property (for example, admission to a workshop or seminar):
- There is little individualized interaction between the supplier and participants.
- Attendance at the activity is sufficient for participants to receive evidence of successful or satisfactory completion of the activity.
- The main purpose of the activity is to provide information to participants or to facilitate the exchange of information between them.
- The subject of the activity is narrowly focused.
- Each activity is discrete with no formal prerequisites for attendance.
- Participation in the activity is not a prerequisite for participation in another activity.
- The activity is promoted as a stand-alone activity.
- The activity is promoted as a workshop or seminar that is open to the general public.
- The activity occurs over a few hours, a day or a few consecutive days.
For more information, refer to Technical Information Bulletin B-090, GST/HST and Electronic Commerce.