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: 139839
Business Number: […]
August 8, 2012
Dear [Client]:
Subject: GST/HST RULING
Application of GST/HST to lift chairs and […]
Thank you for your [correspondence] of January 11, 2012, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the sale of a power lift chair. This letter is in response to a written GST/HST interpretation dated [mm/dd/yyyy] sent to you by the […] GST/HST Rulings Centre. 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. On [mm/dd/yyyy] you purchased from the […][Retailer] the […] power lift chair (lift chair) model number [#] manufactured by […][Company A]. You purchased the lift chair for […][your spouse] upon the written order of […][your spouse's] family physician.
2. The […] lift chair is a mechanized power lift recliner that will recline or lift at the touch of a switch. It features a […] mechanism and a gradual lifting mechanism with a high lift capacity up to [#] lbs. The lifting system is designed to assist an individual in rising to a standing position and lowering to a seated position. […].
3. The cost of the lift chair was $[…] plus $[…] GST/HST for a total cost of $[…].
4. You applied for a rebate of the GST/HST as tax paid in error by way of Form GST 189 General Application for Rebate of GST/HST. The amount of the rebate requested was $[…].
5. On [mm/dd/yyyy], the GST/HST rebate was denied on the basis that the power lift chair is subject to GST/HST and therefore not rebatable.
6. On [mm/dd/yyyy] you wrote to the […] GST/HST Ruling Centre for a written clarification of the tax status applicable to the sale of a lift chair.
7. On [mm/dd/yyyy], the GST/HST Rulings Centre issued a written interpretation indicating that, although the tax policy regarding the tax status of lift chairs was under review, the Canada Revenue Agency’s current position was that a lift chair marketed to the general public at general merchandise stores does not fall under the meaning of the term “specially designed” as required in section 14 of Part II of Schedule VI.
8. […].
RULING REQUESTED
You would like to know whether the […] power lift chair you purchased at the [Retailer] is subject to the GST/HST.
RULING GIVEN
Based on the facts set out above, we rule that the […] chair you purchased from the [Retailer] is zero-rated and subject to GST/HST at the rate of 0%.
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 (Footnote 1) .
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 the 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. Where a lift chair incorporates these features the supply of the lift chair would be zero-rated regardless of the place of purchase provided all of the conditions in section 14.1 of Part II of Schedule VI were met.
The […] chair you purchased from the [Retailer] has features that make it specially designed for use by an individual with a disability. Therefore, the sale of this lift chair to you should have been zero-rated at the time of purchase as the supply was made on the written order of [your spouse's] family physician for use by [your spouse].
[…]. 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
FOOTNOTES
1 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”.
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