Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 101364
Business Number: […]
July 9, 2012
Dear [Client]:
Subject: GST/HST RULING
Application of GST/HST to lift chairs […]
Thank you for your letter of December 17, 2007, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the supply of lift chairs […]. We apologize for the delay in responding to your enquiry.
HST applies at the rate of 15% in Nova Scotia, 13% in Ontario, New Brunswick, and Newfoundland and Labrador, and 12% in British Columbia. GST applies at the rate of 5% in the remaining provinces and territories.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
STATEMENT OF FACTS
We understand that:
1. […] (The Pharmacy) is a retail pharmacy located in Ontario, that is operated by […] (Corporation). Corporation is registered for GST/HST purposes and has been assigned the business number […].
2. The Pharmacy’s […] offers a selection of home medical equipment and supplies, including lift chairs […].
3. The Pharmacy sells a variety of lift chairs, also known as lift recliners, manufactured by […][Manufacturer A] (Lift Chairs). The Lift Chairs are available in […] product lines. Each product line incorporates a lifting system designed to assist an individual in rising to a standing position and lowering to a seated position. According to the promotional material for the products: […]
4. All of the Lift Chairs have the following features:
* A […] system to lower an individual to a seated position and raise an individual to a standing position.
* […]
5. […]
6. […]
7. […]
RULING REQUESTED
You would like to know whether:
i. The Pharmacy is required to charge the GST/HST on a supply of a Lift Chair.
ii. […].
RULING GIVEN
Based on the facts set out above, we rule that:
i. The Pharmacy is not required to charge the GST/HST on a supply of a Lift Chair [specially designed for use by an individual with a disability] if the chair is supplied on the written order of a specified professional for use by a consumer named in the order.
ii. […].
This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.
EXPLANATION
The general rule in section 165 is that every recipient of a taxable supply made in Canada shall pay tax calculated at the rate of 5%, 12%, 13%, or 15% (depending on the place of supply) on the value of the consideration for the supply unless the supply is zero-rated. The tax rate in respect of a zero-rated supply is 0%. A zero-rated supply is a supply that is included in Schedule VI.
Pursuant to Part II of Schedule VI, certain supplies of medical and assistive devices are zero-rated. If a particular medical or assistive device is not included in Part II of Schedule VI, the supply of the device remains subject to tax at the rate of 5%, 12%, 13%, or 15%, as applicable.
Section 14.1 of Part II of Schedule VI
Section 14.1 of Part II of Schedule VI provides that a supply of a chair that is specially designed for use by an individual with a disability is zero-rated when supplied on the written order of a specified professional for use by a consumer named in the order.
For purposes of Part II of Schedule VI, including section 14.1, the term “specified professional” means a person who is entitled under the laws of a province to practise the profession of medicine, physiotherapy or occupational therapy; or a registered nurse.
In order for a particular supply to be zero-rated under section 14.1 of Part II of Schedule VI, the supply in question must be that of a chair. The term “chair” is not defined in the ETA. Considering a common or ordinary meaning approach to the term “chair”, a chair can be described as a type of seat with a specific form consisting of a base or frame (often with four legs), a surface area for sitting and, in many instances, a back. A chair generally provides the ideal height and stability such that it may be used on its own for sitting.
We consider a lift chair to be specially designed if the chair has design elements that assist an individual with a disability to get in and out of the chair independently which they would not otherwise be able to do. A lift chair lowers an individual from, and raises an individual to a standing position. To sit, an individual leans against the front of the chair with seat in its raised position. The individual then activates the switch to lower the seat and the individual to an upright sitting position. To stand, the individual activates the switch and the seat lifts the individual to a standing position.
Therefore, a lift chair specially designed for an individual with a disability would include features such as a lifting mechanism that raises and slightly tilts the chair to raise the individual from a sitting position to a standing position and back again.
i. Lift Chairs
The Lift Chairs manufactured by [Manufacturer A] are chairs that have features that make them specially designed for use by an individual with a disability. Therefore, the supply of these lift chairs will be zero-rated under section 14.1 of Part II of Schedule VI when the supply is made on the written order of a specified professional for use by a consumer named in the order.
ii. […]
Supplies made before March 30, 2012
For supplies of chairs made before March 30, 2012, section 14.1 read “a supply of a chair that is specially designed for use by an individual with a disability if the chair is supplied on the written order of a medical practitioner for use by a consumer named in the order”.
The term “medical practitioner” was defined in section 1 of Part II of Schedule VI as a person who is entitled under the laws of a province to practise the profession of medicine. Therefore, only a supply of a chair that is specially designed for use by an individual with a disability that is supplied on the written order of a medical practitioner would be zero-rated before March 30, 2012.
Amounts paid as or on account of tax
Where a supplier has charged or collected an excess amount as or on account of tax on supplies that qualify for zero-rating, the supplier may refund or credit the excess amount to the recipient in accordance with section 232. If the supplier refunds or credits the amounts collected as GST/HST, it must do so within two years after the day the amount was charged or collected and it must provide the recipient with a credit note containing prescribed information.
Alternatively, persons who have paid an amount as GST/HST on supplies that qualify for zero-rating may make an application to the CRA for a rebate of tax paid in error under section 261 using form GST189 General Application for Rebate of GST/HST (available on CRA’s website at www.cra-arc.gc.ca). The time limit to apply for this rebate is within two years after the day the amount was paid. For more information, please refer to GST/HST Memorandum 12.2, Refund, Adjustment, or Credit of the GST/HST under Section 232 of the Excise Tax Act also available on CRA’s website.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-7952. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Yours truly,
Alison Jones, LL.B
Municipalities and Health Care Sectors Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
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