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.
[Addressee]
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
Case Number: 125523
Business Number: [...]
April 4, 2011
Dear [Client]:
Subject:
GST/HST RULING
Maternity/obstetrical pads
Thank you for your letter of June 18, 2010, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to maternity/obstetrical (OB) pads.
HST applies at the rate of 15% in Nova Scotia, 13% in New Brunswick, Newfoundland and Labrador, and Ontario, 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
Our understanding of the facts is as follows:
1. The [...] ([Company]) supplies products to hospitals, physicians and long term care facilities. [The Company] is registered for GST/HST purposes with BN [...].
2. You first contacted the [...] Region of GST/HST Rulings via fax regarding the point-of-sale rebate for feminine hygiene products. You included a copy of this fax with your second submission to our office.
3. In this first submission, you had reviewed the GST/HST Info Sheet GI-062, Harmonized Sales Tax for Ontario, British Columbia and Nova Scotia - Point-of-Sale Rebate on Feminine Hygiene Products and found that clarification is required on what the Canada Revenue Agency considers to be a "sanitary napkin". The fax stated that GI-062 does not indicate whether the rebate is just for sanitary napkins used for menses or whether it will also include obstetrical napkins, as these are used both post-surgical as post-partum.
4. The ruling request was reviewed by the [...] Region who determined that the Excise and GST/HST Rulings Directorate in Ottawa should provide the response. As requested, you sent a second submission dated June 18, 2010, directly to Ottawa. In this submission you have provided further information and state that under the provincial sales tax jurisdictions in [...] [Province X] and [...] [Province Y], maternity/obstetrical pads were exempt of provincial sales tax. Copies of relevant government publications were included with your submission, as well as literature from one of [the Company's] suppliers.
5. The [Province Y] publication included in the submission is [...]
6. The [Province X] publication referenced is [...]
7. The supplier information consisted of a sheet of products supplied by the [...] for a line of [...] maternity/OB pads. The products featured are a range of products from liners to tabbed maxi pads. The sheet states the following: [...]
8. I spoke to you on July 23, 2010, to confirm the specific [...] products for which you are requesting the ruling. The specific [...] products, as listed on the information sheet and on the [the Company's] Web site [...] are as follows:
• [...] [Product 1] The Web site contains a picture of the package, which is a plastic bag containing [...] pads. The description says [...].
• [...] [Product 2] The Web site shows a picture of the package, which is a plastic bag containing [...] pads. The labelling on the front of the package is: [...]. The Web site refers to the product as [...]. It also provides the following description: [...]
• [...] [Product 3] This Product is available in three forms;
1. [...] This product is packaged in a plastic bag, with the following wording on the front: [...].
2. [...] This product is [...] wrapped in plastic and is labelled as [...].
3. [...] This Product is [...] wrapped in plastic and is labelled as follows; [...].
• [...] [Product 4] The Web site shows a picture of one pad and it is called [...]. The description of the product is the same as for the [Product 2].
Ruling Requested
You would like to know if the above described [...] products are qualifying feminine hygiene products for purposes of the point-of-sale rebate in British Columbia, Ontario and Nova Scotia.
Ruling Given
Based on the facts set out above, we rule that the above described [...] products, namely the [Product 1], [Product 2], [Product 3] [...] and [Product 4] are qualifying feminine hygiene products for purposes of the point-of-sale rebate provided by the governments of Ontario, British Columbia and Nova Scotia.
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 provinces of Ontario, British Columbia and Nova Scotia have provided for a point-of-sale rebate of the provincial component of the HST payable on qualifying feminine hygiene products. The terms in which the provinces describe the qualifying feminine hygiene products are the same as the ones used in the federal Deduction for Provincial Rebate (GST/HST) Regulations (the Regulations). The Regulations permit, in conjunction with subsection 234(3), to offset such a rebate credited or paid by a supplier against the net tax remittance of the supplier. The feminine hygiene products which qualify for the rebate are described under section 1 of the Regulations to mean "a product that is marketed exclusively for feminine hygiene purposes and is a sanitary napkin, tampon, sanitary belt, menstrual cup or other similar product".
In order for a product to meet the definition of a "feminine hygiene product" for purposes of the rebate, the product must meet two conditions:
1) the product must be marketed exclusively for feminine hygiene purposes, and
2) the product must be a sanitary napkin, tampon, sanitary belt, menstrual cup or other similar product.
The term "feminine hygiene" is not defined in the ETA or the Regulations, but it is a general term used to describe personal care products used by women during menstruation, vaginal discharge and other bodily functions related to the vulva. Commonly accepted categories of feminine hygiene products are sanitary napkins, pantiliners, tampons, menstrual cups and feminine wipes. As the [...] products are marketed as napkins/pads designed to absorb the flow of bodily fluids relating to childbirth, they are products which are marketed for feminine hygiene purposes.
The term sanitary napkin is not defined in the ETA or the Regulations, and thus we use its common dictionary meaning. Sanitary napkins are generally understood to be an absorbent item worn by a woman to absorb menstrual flow. Sanitary napkins are available in a number of different sizes and absorbency ranges (i.e., thin, regular, super/maxi, night time) to accommodate for the differences in body size and vaginal flows in women. The [...] products can be described as slightly larger than a super/maxi pad and are designed to absorb vaginal discharges (e.g., lochia). Therefore, the [...] products are a type of sanitary napkin.
As the [...] products are sanitary napkins which are marketed exclusively for feminine hygiene purposes, they are therefore "qualifying feminine hygiene products" for purposes of the point-of-sale rebate.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (902) 426-6940. 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,
Nancy Jardine
Goods Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
Email this Content