2253787 Ontario – Tax Court of Canada finds that a purchase on behalf of a grey marketer cannot be done on an agency basis

A grey marketer acquired Canadian iPhones for export to Hong Kong, which was a prohibited market. It was denied input tax credits for HST incurred by buyers (whom it reimbursed) in acquiring the phones for it from Canadian Apple stores. Bocock J managed to conclude that because its intended use of the phones was contrary to Apple’s sale terms, the grey marketer lacked the "legal capacity" to purchase the phones – so that the buyers could not be considered to have purchased the phones as its agents.

If the buyers were not agents, that meant that they bought the phones on their own account, also for illicit resale.

Neal Armstrong. Summary of 2253787 Ontario Inc. v. The Queen, 2014 TCC 121 under Input Tax Credit Information (GST/HST) Regulations, s. 3(c).