Taxpayer’s services not zero-rated as neither origin nor termination of trips were out of Canada

Tax - Goods and Services Tax - Zero-Rated Supplies

Taxpayer was family-owned tour bus operator based in Calgary and services consisted of destination tour bus trips to ski resort in Banff. Director of taxpayer testified that taxpayer never provided or sold air transportation and that unless customers made special arrangements with taxpayer, all of company pick-up and drop-off locations were within Alberta. Taxpayer also started construction on property years ago for which it made claim for Input tax credits (ITC). Minister audited and reassessed taxpayer for reporting periods between 2011 and 2013 and found that supplies were within Canada and subject to GST and denied taxpayer some ITC’s. Taxpayer appealed. Appeal allowed. Minister conceded that GST collected was to be reduced in respect of zero-rated passenger transportation services provided to several passengers and additional ITC amount was conceded. There was no evidence that any of disputed transportation services, which were labeled as missed sales and proper sales, were provided outside of Canada. Consequently it was concluded that services provided by taxpayer were not zero-rated, because neither origin nor termination of any of those trips or any stopover in respect to services provided by taxpayer were outside Canada. Taxpayer was unable to establish one of three scenarios required for taxpayer’s services to be considered zero-rated.

Sunshine Coach Ltd. v. The Queen (2019), 2019 CarswellNat 1255, 2019 CarswellNat 990, 2019 TCC 72, 2019 CCI 72, Diane Campbell J. (T.C.C. [Informal Procedure]).

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