CRA has not accepted the Le Gardeur decision on zero-rating based on a component being zero-rated

Although CRA’s position was that supplies of in vitro diagnostic test kits designed for laboratory use are taxable, the Centre Hospitalier Le Gardeur decision (2007 TCC 425) found that certain in vitro diagnostic test kits were zero-rated pursuant to Sched. VI, Pt. I, s. 2(a). When asked whether CRA accepted this result, it responded that it was awaiting the Patterson Dental decision for clarification of this issue. Four months later, that decision came down and decided that zero-rating for epinephrine did not include a drug containing epinephrine. Although Patterson Dental distinguished rather than overtly disagreed with the earlier decision, perhaps CRA will decide to maintain its pre-Gardeur view.

Neal Armstrong. Summary of 8 March 2018 CBA Commodity Taxes Roundtable, Q.3 under Sched. VI, Pt. I, s. 2(a).