Section 129 — Excise Tax Act: Meaning of small supplier division

In this section and section 129.1, small supplier division of a public service body, at any time, means a branch or division of the body that, at that time, is a branch or division designated by the Minister as an eligible division for the purposes of this section; and would be a small supplier under section 148 if the branch or division were a person separate from the body and its other branches or divisions, the branch or division were not associated with any other person, and every supply made by the body through the branch or division were made by the branch or division. A public service body that is engaged in one or more activities in separate branches or divisions may apply to the Minister, in prescribed form containing prescribed information, to have a branch or division specified in the application designated by the Minister as an eligible division for the purposes of this section. Where the Minister receives an application under subsection (2), the Minister may, by notice in writing, designate a branch or division specified in the application as an eligible division for the purposes of this section, effective on a day specified in the notice, if the Minister is satisfied that the branch or division can be separately identified by reference to its location or the nature of the activities engaged in by it; separate records, books of account and accounting systems are maintained in respect of the branch or division; and a revocation under subsection (4) pursuant to a request made by the body in respect of the branch or division has not become effective in the 365-day period ending on that day. The Minister may, in writing, revoke a designation under subsection (3) of a branch or division of a public service body where the conditions described in paragraph (3)(a) or (b) are no longer met in respect of the branch or division or the body makes a request in writing to the Minister that the designation be revoked. Where, under subsection (4), the Minister revokes a designation of a branch or division of a public service body, the Minister shall send a notice in writing of the revocation to the body and shall specify in the notice the effective date of the revocation. For the purposes of this Part, where a branch or division of a public service body that is a registrant becomes at any time a small supplier division and the body does not, at that time, cease to be a registrant, the body shall be deemed to have made, immediately before that time, a supply of each of its properties, other than capital property or an improvement thereto, that was held immediately before that time for consumption, use or supply in the course of commercial activities of the body and that the body begins, immediately after that time, to hold for consumption, use or supply primarily in the course of activities engaged in by the body through its small supplier divisions; and except where the supply is an exempt supply, to have collected, immediately before that time, tax in respect of the supply equal to the total of all input tax credits in respect of the property that the body was entitled to claim at or before that time. Where, at any time in a particular reporting period of a public service body that is a registrant, a branch or division of the body becomes a small supplier division, the body does not, at that time, cease to be a registrant, and in or before that period, tax became payable, or was paid without having become payable, by the body and is calculated on consideration, or a part thereof, that is a rent, royalty or similar payment in respect of property and that is reasonably attributable to a period (in this subsection referred to as the “lease period”) after that time, or that is reasonably attributable to services that are to be rendered after that time, the following rules apply: there shall not be included, in determining the input tax credits in respect of that tax that are claimed by the body in the return under section 238 for that or any subsequent reporting period, any portion of the amount determined by the formula A × B where A is that tax, and B is the extent (expressed as a percentage) to which the property is used by the body during the lease period, or the services were acquired or imported by the body for consumption, use or supply, in the course of activities engaged in by the body through the branch or division, and where all or any portion of the amount determined under paragraph (d) was included in determining an input tax credit claimed by the body in a return under section 238 for a reporting period of the body ending before the particular reporting period, that amount or portion thereof shall be added in determining the net tax for the particular reporting period.