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, 11th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 223588
Dear [Client]:
Subject: GST/HST RULING
[…][Whether zero-rated - Supply of [X], a cell phone]
Thank you for your letter dated April 29, 2021, concerning the application of the goods and services tax/harmonized sales tax (GST/HST) to supplies of [X] the […] cell phone.
The HST applies in the participating provinces at the following rates: 13% in Ontario; and 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island. The GST applies in the rest of Canada at the rate of 5%.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
STATEMENT OF FACTS
We understand from your letter and from the website [...], that:
1. […] (the Corporation) […] sells specialized mobile devices to people with disabilities.
2. […][Information about the Corporation].
3. The Corporation sells a cell phone known as […] ([…][X][…]). […].
4. You mention that [X] is designed specifically for individuals with vision loss and that the product is marketed exclusively for people with vision loss and sold to individuals with vision loss.
5. […][Information about X]
6. […][Information about the specialized features of X].
7. […]
8. […]
[…]
RULING REQUESTED
You would like to know whether supplies of [X] are zero-rated (taxed at a rate of 0%).
RULING GIVEN
Based on the facts set out above, we rule that supplies of [X] are zero-rated pursuant to section 2 of Part II of Schedule VI. Therefore, no GST/HST is payable on the sale […] of the product.
EXPLANATION
Generally, all supplies of property and services made in Canada are subject to tax at the applicable rate unless specifically zero-rated under the ETA.
Supplies of certain medical and assistive devices are zero-rated. For a supply of a medical device to be zero-rated, a specific zero-rating provision included under Part II of Schedule VI must apply to the supply of the particular medical device. If a medical device is not included in Part II of Schedule VI, then the supply of the medical device would be subject to tax at the applicable rate.
Section 2 of Part II of Schedule VI, in part, zero-rates a supply of a communication device that is specially designed for use by an individual with a hearing, speech or vision impairment.
For a supply of such a communication device to be zero-rated, the device must be designed for human use and for assisting an individual with a disability or impairment. Also, the device must be for medical or reconstructive purposes, and not be a cosmetic service supply.
Supplies of [X] […] meet the conditions of section 2 of Part II of Schedule VI and are thus zero-rated.
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the Canada Revenue Agency (CRA) is bound by the ruling given in this letter provided that: none of the issues discussed in the ruling are currently under audit, objection, or appeal; no future changes to the ETA, regulations or the CRA’s interpretative policy affect its validity; and all relevant facts and transactions have been fully and accurately disclosed.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 306-807-5296. 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,
John Ware
Health Care Sectors Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
Email this Content