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: 129731
Business Number: [...]
December 20, 2011
Dear [Client]:
Subject:
GST/HST INTERPRETATION
GST/HST point-of-sale rebate on children's goods (swimwear)
Thank you for your fax of October 28, 2010, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the point-of-sale rebate on children's goods.
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.
We understand that [...] [the Company] sells commercial aquatic supplies, including swimwear, at various locations in Canada.
Interpretation Requested
You have requested a ruling on whether or not children's swimwear is eligible or ineligible for the point-of-sale (POS) rebate on children's clothing.
Although you have requested a ruling on swimwear, we are unable to provide such, as you have not requested a ruling on a specific product. However, we are providing an interpretation which sets out the Canada Revenue Agency's (CRA) position on the application of the legislation to a generic fact situation.
Interpretation Given
The Provinces of Ontario, British Columbia and Nova Scotia each provide a point-of-sale rebate of the provincial part of the HST payable on qualifying children's goods. The point-of-sale rebate is available to persons that are recipients of qualifying children's goods sold in Ontario, British Columbia or Nova Scotia, or that are resident in any of those provinces and that import qualifying children's goods in circumstances where the provincial part of the HST is payable on the importation, or that receive delivery or possession of qualifying children's goods into Ontario, British Columbia or Nova Scotia in circumstances where the provincial part of the HST is payable on the children's goods.
For purposes of the POS rebate The Deduction for Provincial Rebate (GST/HST) Regulations (the Regulations) defines qualifying "children's clothing" as the following.
Garments (other than garments of a class that is used exclusively in sports or recreational activities, costumes, children's diapers or children's footwear) that are
(a) designed for babies, including baby bibs, bunting blankets and receiving blankets;
(b) children's garments
(i) designed for girls and of a size not greater than the size that is girls' size 16 according to the national standard applicable to the garments, or
(ii) designed for boys and of a size not greater than the size that is boys' size 20 according to the national standard applicable to the garments, or
(iii) if no national standard applies to the garments, designed for girls or boys and having a size designation of extra small, small, medium or large; or
(c) hosiery or stretchy socks, hats, ties, scarves, belts, suspenders, mittens and gloves in sizes and styles designed for children or babies.
We recognize that traditionally unspecialized swimwear is dual purpose in that it can be worn by children outside of a swimming environment. Such traditional swimwear including traditional boys swimming trunks and girls one and two piece swimsuits qualify for the POS rebate.
As a result, the above-noted swimwear qualifies for the point-of-sale rebate where they are designed for girls or boys and meet the size requirements noted above, regardless of the material used in their manufacturing.
However, supplies of specialized wear such as wetsuits are considered to be designed exclusively for sports or recreational activities and do not qualify for the point-of-sale rebate.
Further, supplies of swimming goggles and amphibious footwear such as flippers, water shoes or aqua shoes, water socks and similar products are considered to be exclusively designed for sports or recreational activities and are therefore excluded from the point-of-sale rebate.
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 to the ETA, 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) 954-5124. 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,
Angela Stachowski
Goods Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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