GST POLICY STATEMENT

P-160R MEANING OF THE PHRASE "WHERE A PARTICULAR PROPERTY OR SERVICE IS SUPPLIED TOGETHER WITH ANY OTHER PROPERTY OR SERVICE"

Date of Issue

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In situations where the Department has issued specific interpretations that differ from this policy, the policy should be applied to the affected person(s) on the earlier of the day the Department has made the public aware of this policy (i.e. Excise News, TIB or memorandum), or informs the person(s) in writing of the application of the tax to their transaction(s). However, the Department may apply the policy retroactively, where this would be beneficial to a person and the person asks that the policy be applied retroactively.

Issue and Decision:

According to section 138, "where

By relying on the concepts outlined in the policy statement with respect to single supply/multiple supplies, it is possible to establish the number of supplies being made that are part of a particular transaction. Section 138 applies only in circumstances where, as a result of the application and analysis of the single supply/multiple supplies policy, or on the basis of the facts where such an analysis is not necessary, it is determined that at least two supplies are being made together. If it is determined that only one supply is being made, section 138 will not apply to the particular transaction.

This does not mean that section 138 applies only where two supplies are made. Section 138 may be applicable in situations where more than two supplies are made. This may be the case where a supplier makes a primary supply together with more than one secondary (and perhaps incidental) supply. Section 138 may also be applied in situations where more than one primary supply and one or more secondary supplies are made. In this case, it will be necessary to evaluate each secondary supply in relation to its respective primary supply.

Where more than two supplies are made together, each supply will have to be evaluated in relation to each other supply to determine if the provision of one property or service may be regarded as incidental to the provision of another property or service. If one of these properties or services is regarded as incidental to (and therefore deemed to be part of) another property or service, the other supplies should not be evaluated in relation to the deemed single supply (i.e. the particular supply and the incidental supply), but rather should be evaluated in relation to each one of the other properties or services being supplied.

ILLUSTRATIVE EXAMPLES

Example 1

1. A non-profit organization supplies a ticket providing the right to attend an amateur performance together with a bus ticket providing the right to use a public transit bus once.

2. The non-profit organization supplies the bus ticket to reduce traffic related problems on the day the amateur performance will be held. It would not supply the bus ticket if it was not supplying the ticket providing the right to attend the amateur performance.

3. However, the customer may use the bus ticket at any time and is not required to use it on the day the amateur performance is held.

4. In advertising tickets providing the right to attend the amateur performance, the non-profit organization indicates that it supplies a bus ticket with the admission ticket.

5. The context of the transaction as a whole indicates that the main objective of the non-profit organization may be considered to supply the ticket providing the right to attend the amateur performance and not to supply the bus ticket.

6. The face value of the ticket providing the right to attend the amateur performance is $80.00 and the face value of the bus ticket is $1.50.

7. The non-profit organization charges a single consideration of $81.00 in respect of both supplies.

Issue

May section 138 be used to determine whether the bus ticket is deemed to part of the ticket providing the right to attend the athletic event?

Analysis

To determine whether section 138 may be used to make a determination, it is necessary to determine first whether each element constitutes a separate supply or whether all the elements are part of a single supply.

In the context of this transaction, each ticket has a separate use. The ticket providing the right to attend the amateur performance is useful even if the purchaser was not provided with the bus ticket. The customer is not required to use the public transit and may use various transportation means to go to the performance. Similarly, the customer may use the bus ticket at any time and is not required to use it to go to the performance. This criterion indicates that the provision of the two tickets may constitute multiple supplies.

The non-profit organization only provides the two tickets together and does not supply the ticket providing the right to attend the amateur performance without supplying the bus ticket. This criterion indicates that the provision of the two tickets may constitute a single supply.

In its advertising, the non-profit organization makes the purchasers aware that they will get a bus ticket together with the admission ticket. The purchasers know precisely which amateur performance they will attend, the date and the time on which the performance will be held and the general content of the performance. They also know that they will get a bus ticket providing the right to use a public transit bus at any time. This criterion indicates that the provision of the two tickets may constitute multiple supplies.

Conclusion

On balance, the above criteria indicate that the two tickets provided by the non-profit organization constitute multiple supplies. Therefore, section 138, may be used to determine whether the bus ticket is deemed to be part of the ticket providing the right to attend the athletic event.

Example 2

1. An individual has a car accident.

2. In preparing for legal action, the individual's lawyer, with the authorization of the individual, asks the individual's doctor for a (medico-legal) report reflecting the doctor's medical opinion in respect of the effects of the car accident, i.e. what aspects of his client's physical condition have changed as a result of the accident.

3. To prepare this report, the doctor has to examine the individual and to express in writing her medical opinion on the change in her patient's health condition resulting from the accident.

Issue

May section 138 be used to determine whether the examination of the person to form part of the medico-legal report?

Analysis

To determine whether section 138 may be used to make a determination in this situation, it is necessary to determine first whether each element constitutes a separate supply or whether all the elements are part of a single supply.

In the context of this transaction, the examination is not an output provided to the lawyer. It is merely an input in the making of the supply of the medico-legal report to the lawyer and the doctor is making a single supply of a medico-legal report to the lawyer.

Although the preparation of the medico-legal report may have required consultation, examination and diagnosis, the intent of the practitioner is not to render a health care service to an individual. The purpose or intent is the preparation of a report for legal or quasi-legal proceedings.

Given that the examination of the individual is not a supply in itself, section 138 is not to be used to determine whether the examination of the person to form part of the medico-legal report.