Contact Lens King – Federal Court of Appeal finds that a requirement to make supplies pursuant to a prescription did not require obtaining a copy of the prescription

The zero-rating for contact lenses in Sched. VI, Pt. II, s. 9 requires that the contact lenses be supplied under the authority of a prescription by an authorized practitioner, but does not explicitly require that the supplier obtain and retain copies of such prescriptions. LeBlanc JA found, contrary to the Tax Court, found that no such requirement should be inferred. However, he found that the supplier (a U.S. corporation that apparently did not require any confirmation of the prescription other than that implicit in the notion that most customers would not be able to provide the contact lens particulars without having first received a prescription) was required to establish the prescriptions’ “existence by means of sufficient and credible evidence,” which it had not done.

He noted that the supplier, after the reporting periods in issue, had commenced requiring customers to certify that they had the prescription in their possession – and, regarding this customer attestation requirement, stated:

[I]t is not for this Court, in this context, to measure its impact on the burden imposed on the appellant. The question will surely arise in the future.

Neal Armstrong. Summaries of Contact Lens King Inc. v. Canada, 2022 CAF 154 under ETA Sched. VI, Pt. II, s. 9, s. 286(1) and Statutory Interpretation – Inserting Words.