Purchases and Expenses That Give Entitlement to a Rebate
Generally speaking, public service bodies (PSBs) can claim GST and QST rebates on purchases and expenses for which they cannot claim input tax credits (ITCs) or input tax refunds (ITRs).
- general operating expenses, such as rent, utilities, and administration expenses for which the PSB cannot claim ITCs and ITRs
- property and services used, consumed or supplied in the course of exempt activities
- capital property intended for use primarily (more than 50% of the time) in the course of exempt activities
- most allowances and reimbursements that the PSB paid to employees involved in its exempt activities
Certain public service bodies are entitled to a full refund of the GST they pay on the purchase of printed books. For more information, refer to GST Rebate for Printed Books.
PSBs cannot claim a rebate for certain purchases and expenses. Examples include:
- memberships in a club whose main purpose is to provide recreational, dining or sporting facilities
- alcoholic beverages supplied by a PSB on which the GST and QST do not have to be collected (unless the beverages are included in the price of a meal)
- property or services purchased to provide long-term accommodation (one month or more), unless more than 10% of the accommodation is intended for seniors, youths, students, individuals with a disability or individuals who qualify for a rent reduction program
- property or services used primarily (more than 50% of the time) to supply parking spaces for tenants, unless more than 10% of the accommodation is intended for seniors, youths, students, individuals with a disability or individuals who qualify for a rent reduction program
An organization can be designated as a municipality solely for some of its tax-exempt municipal activities.
Exempt activities include:
- installing, repairing or maintaining a water distribution, sewer or drainage system
- maintaining or repairing roads, streets or sidewalks
- snow removal services
- garbage collection services
- recreational programs intended primarily for children 14 or under, or for underprivileged individuals or individuals with a disability, if the program is intended for a clientele defined by its inclusion within the territory of a municipality
- conferring borrowing privileges at a public library, if such privileges are intended for a clientele defined by its inclusion within the territory of a municipality
For more information, consult the guide GST/HST Information for Municipalities (RC4049) published by the Canada Revenue Agency.