Section 129.1 — Excise Tax Act: Supply by small supplier division

If a public service body makes a taxable supply through a branch or division of the body and the consideration or a part of the consideration for the supply becomes due to the body at a time when the branch or division is a small supplier division or is paid to the body at such a time without having become due, the consideration or the part of the consideration, as the case may be, shall not be included in calculating the tax payable in respect of the supply or in determining a threshold amount of the body under section 249 and that supply is, for the purposes of this Part, deemed not to have been made by a registrant, except if the supply is a supply by way of sale of real property; a supply by way of sale of personal property by a municipality that is capital property of the municipality; or a supply by way of sale of designated municipal property of a person designated to be a municipality for the purposes of section 259 that is capital property of the person. In determining an input tax credit of a public service body, there shall not be included an amount in respect of tax that, at any time after March 27, 1991, became payable, or was paid without having become payable, by the body, to the extent that the tax is in respect of property (other than capital property or improvements thereto) acquired, imported or brought into a participating province by the body for the purpose of consumption, use or supply in the course of activities engaged in by the body through a small supplier division of the body; or is calculated on consideration, or a part thereof, that is reasonably attributable to services that were, before that time, consumed, used or supplied by the body in the course of activities engaged in by the body through a small supplier division of the body or that are, at that time, intended to be so consumed, used or supplied. [Repealed, 1997, c. 10, s. 151] Where at any time after March 27, 1991, a public service body that is a registrant begins to hold property of the body (other than capital property) for consumption, use or supply primarily in the course of activities engaged in by the body through its small supplier divisions, and immediately before that time, the body was holding the property for consumption, use or supply in the course of commercial activities of the body, and otherwise than primarily in the course of activities engaged in by the body through its small supplier divisions, except where subsection 129(6) or 171(3) applies, the body shall be deemed to have made, immediately before that time, a supply of the property 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 a public service body begins, at any time after March 27, 1991, to hold property of the body (other than capital property) for consumption, use or supply primarily in the course of activities engaged in by the body otherwise than through its small supplier divisions, immediately before that time the property was held by the body for consumption, use or supply primarily in the course of activities engaged in by the body through its small supplier divisions, and immediately after that time the property is held by the body for consumption, use or supply in the course of commercial activities engaged in by the body otherwise than through its small supplier divisions, except where subsection 171(1) applies, for the purpose of determining an input tax credit of the body, it shall be deemed to have received a supply of the property and to have paid, at that time, tax in respect of the supply equal to the lesser of the amount, if any, by which the total of all amounts each of which is tax that, before that time, was paid or became payable by the body in respect of the last acquisition or importation of the property by the body or that was deemed under subsection 129(6) to have been collected by the body in respect of the property exceeds the total of all input tax credits and rebates that the body was entitled to claim under this Part before that time in respect of that acquisition or importation, and tax calculated on the fair market value of the property at that time. For the purposes of determining an input tax credit in respect of capital property of a public service body and for the purposes of Subdivision D of Division II, an activity engaged in by a public service body shall be deemed not to be a commercial activity of the body to the extent that the activity is engaged in through a small supplier division of the body. Subsections 200(2) and 206(4) and (5) do not apply to a public service body in respect of a reduction in the extent to which property is used in commercial activities of the body where the reduction in use occurs before March 28, 1991; and as a result of the application of subsection (6) but not as a result of a branch or division of the body becoming a small supplier division.