Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
XXXXX
XXXXX
XXXXX
Case Number: 110513
Business Number: XXXXX
Attention: XXXXX
March 4, 2009
Subject:
GST/HST INTERPRETATION
GST/HST Status of Imported Contact Lenses
Dear XXXXX:
Thank you for your XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the importation into Canada of corrective contact lenses.
All legislative references are to the Excise Tax Act (ETA) and its regulations, unless otherwise specified.
Based on your letter, we understand that a contact lens wholesaler is importing, in bulk, contact lenses incorporating standard prescriptions. These lenses are intended to eventually be prescribed to consumers by optometrists.
Interpretation Requested
You would like to know whether the contact lenses are subject to GST/HST at the time of importation.
Interpretation Given
Pursuant to section 165 XXXXX, a taxable (other than zero-rated) good or service supplied in Canada is subject to GST imposed at the rate of 5%, unless the supply is made in one of the participating provinces (i.e., Nova Scotia, New Brunswick or Newfoundland and Labrador), in which case HST is imposed at the rate of 13%. Further, goods imported into Canada are generally taxable for GST/HST purposes.
The ETA contains specific exceptions to these general rules. Supplies that are zero-rated, for example, are subject to GST/HST at the rate of 0%. Similarly, importations of goods may be relieved of GST/HST pursuant to section 213 XXXXX if they are referenced under Schedule VII XXXXX.
Under section 9 of Part II of Schedule VI XXXXX, the supply of eyeglasses or contact lenses is zero-rated if they are supplied, or are to be supplied, on the written order of an eye-care professional for the treatment or correction of a defect of vision of a consumer named in the order, and the professional is entitled, under the laws of the province in which the professional practices, to prescribe eyeglasses or contact lenses. As a result, the supply of contact lenses intended to be supplied in these circumstances are zero-rated at the retail and pre-retail levels.
As previously noted, importations of goods described in Schedule VII XXXXX are relieved of tax pursuant to section 213 XXXXX. In accordance with section 6 of Schedule VII, the importation of medical and assistive devices described and zero-rated under Part II of Schedule VI XXXXX qualifies as a non-taxable importation. As a result, the importation of the contact lenses, the supply of which would be zero-rated under section 9 of Part II of Schedule VI XXXXX, by the wholesaler in a case such as this would qualify as a non-taxable importation under section 213 and section 6 of Schedule VII XXXXX.
The foregoing comments represent our general views with respect to the subject matter of your request. These comments are not rulings and, in accordance with the guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, do not bind the Canada Revenue Agency with respect to a particular situation. Future changes XXXXX, regulations, or our interpretative policy could affect this interpretation.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-4291. 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,
Geoff Macmillan
Border Issues Unit Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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