16 May 2006 GST/HST Interpretation 80170 - Application of GST/HST to the Processing of Wild Game

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.

Dear XXXXX:

Thank you for your fax XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the importation of a dumbwaiter.

All legislative references are to the Excise Tax Act (ETA) and the regulations therein, unless otherwise specified.

Based on the information in your facsimile, the attached description of the item to be imported and our telephone conversation XXXXX, we understand the following:

1. XXXXX is a transport company based in XXXXX that specializes in the cross-border transportation of goods between the USA and Canada.

2. XXXXX also provides customs brokerage services and will provide customs clearance services to clients for the goods it transports between the USA and Canada.

3. A client of XXXXX is importing a dumbwaiter from the USA to Canada. The dumbwaiter, which is a small elevator used to transport food or other items between floors of a building, is for the use of a disable individual.

Interpretation Requested

Is the importation of a dumbwaiter that is for the use of a disabled individual a non-taxable import pursuant to section 6 of Schedule VII to the ETA? If yes, for purposes of clearing the dumbwaiter through Customs could XXXXX use GST/HST status code 57 on the customs documentation?

Interpretation Given

Based on the information provided, a dumbwaiter that is imported into Canada for use by a disabled individual is not a zero-rated medical device and therefore is not a non-taxable import under Schedule VII of the ETA. As such, XXXXX cannot use GST/HST code 57 on customs documentation when clearing this item through Customs.

Section 212 of Division III of Part IX of the ETA provides for the imposition of tax on imported goods. It provides that subject to other provisions of Part IX of the ETA, every person who is liable under the Customs Act (CA) to pay duty on imported goods, or who would be so liable if the goods were subject to duty, shall pay tax on the goods calculated at the rate of 7% on the value of the goods. Note that if goods are imported by a resident of a participating province (Nova Scotia, New Brunswick or Newfoundland and Labrador) the goods are subject to the HST at 15%.

Please note that on May 2, 2006, the Minister of Finance proposed changes to the GST/HST rate. GST at the rate of 6% will apply to taxable importations of goods on or after July 1, 2006 or released from Customs control on or after that day.

In most cases, the 15% HST applies at the border to taxable importations of non-commercial goods imported by a resident of a participating province regardless of the point of entry into Canada or Customs clearance. If such non-commercial goods are imported on or after July 1, 2006, or released from Customs control on or after that day, the resident of a participating province will pay HST at the rate of 14%.

Section 213 of the ETA specifically excludes goods included under Schedule VII from tax imposed under Division III. Pursuant to section 6 of Schedule VII to the ETA, goods included in Parts I to IV and VIII of Schedule VI to the ETA, which provides for the zero-rating of certain supplies, are to be treated as non-taxable importations when imported into Canada.

Part II of Schedule VI to the ETA provides zero-rated status for supplies of most medical and assistive devices. If a medical devices that is included in Part II of Schedule VI to the ETA is imported into Canada, the device is considered a non-taxable importation pursuant to section 6 of Schedule VII to the ETA. However, if a medical device is not included in Part II of Schedule VI, it is subject to Division III tax at time of importation.

A dumbwaiter that is for the use of a disabled individual is not a medical device for purposes of Part II of Schedule VI to the ETA. Therefore, if a dumbwaiter were imported into Canada, it would not qualify as a non-taxable import under section 6 of Schedule VII and therefore would be subject to Division III tax at time of importation.

GST/HST status code 57, which is to be used on customs documentation for the non-taxable importation of medical and assistive devices enumerated in Part II of Schedule VI, is not applicable to the importation of a dumbwaiter as it is a taxable import.

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, Goods and Services Tax Rulings, 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) 957-7841.

Yours truly,

Dwayne Moore
Border Issues Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate

2006/04/28 — RITS 77835 — [Application of the GST/HST on Bags of Fruit-based Snacks]