GST Rebate for Acquisition of Books for Free Distribution

March 29, 2012

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.

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