GST/HST Policy Statement P-021

Application of Subsection 149(3)

DATE OF ISSUE September 4, 1992

SUBJECT Application of subsection 149(3)

LEGISLATIVE REFERENCE(S) Subsection 149(3) of the Excise Tax Act

NATIONAL CODING SYSTEM FILE NUMBER(S) 11560-6

EFFECTIVE DATE January 1, 1991

TEXT

This policy statement discusses the application of subsection 149(3) where a person acquires a non-financial business as a going concern from a financial institution.

Pursuant to subsection 149(3), where a person purchases, in a taxation year a non-financial business as a going concern from a financial institution, and this activity was continued as the person's principal business after the purchase, the person is considered to be a financial institution for the remainder of that taxation year.

However, in the circumstances described above, it is the Department's position "not" to consider a person who purchases a non- financial business from a financial institution to be a financial institution unless it wants to be considered a financial institution.