• GST Rebate for Acquisition of Books for Free Distribution
  • April 3, 2012
  • Law Firm: Miller Thomson LLP - Toronto Office
  • The Budget proposes a new incentive to encourage the promotion of literacy by registered charities and certain non-profit organizations.

    Current rules

    The Excise Tax Act currently provides for a rebate of the GST (and the federal portion of the HST) for certain books and related items (including audio recordings and printed scripture) acquired by public libraries, educational institutions, as well as charities and qualifying non-profit organizations prescribed by regulation whose primary purpose is the promotion of literacy.

    Currently, however, the rebate does not apply to tax paid on printed books purchased to be sold or donated.

    Proposed changes

    Under the Budget proposals, charities and qualifying non-profit literacy organizations prescribed by regulation will be allowed to claim a rebate of the GST (and the federal portion of the HST) paid to acquire printed books to be given away. The rebate applies to the acquisition of the following:

    • printed books or updates of such books;

    • audio recordings all or substantially all of which consist of a spoken reading of a printed book; and

    • bound or unbound printed versions of the scripture of any religion.

    The Budget states that this change will allow those literacy organizations prescribed by regulation to claim a rebate of tax paid on printed books, where, for example, such books are purchased to be given to children from low income households who might not otherwise be able to afford them.

    This measure will apply to acquisitions and importations of printed books in respect of which tax becomes payable after Budget Day.