25 June 1996 GST/HST Interpretation 11860-2[3] - The Application of the Goods and Services Tax (GST) to the Supply of Frames for Prescription Eyeglasses by Your Client

Dear XXXXX:

This is in response to your letter of June 17, 1996, in which you requested clarification on the application of the Goods and Services Tax (GST) to the supply of frames for prescription eyeglasses by your client.

Your client imports prescription eyeglasses and each importation is supported by a written invoice with the patient's prescription noted thereon. For purposes of importation, this documentation is suitable to zero-rate the importation of the prescription eyeglasses on a zero-rated basis. Please note that if the written order on the invoice is not by the prescribing eyecare professional, a Revenue Canada auditor may request the actual written order during the process of a GST audit. At that point your client will be required to provide the actual prescription.

The main issue raised in your letter is the GST status of the supply of importation of frames for prescription eyeglasses and whether they qualify for a zero-rated GST status under section 32 of Part II of Schedule VI which provides a zero-rated status for the following:

"A supply of a part, accessory or attachment that is specially designed for a property described in this Part."

Frames for eyeglasses are not considered to meet the "specially designed" requirement under section 32. The same frames used for prescription eyeglasses can be used for non-prescription eyeglasses. It is Revenue Canada's position that the supply or importation of frames for prescription eyewear is subject to the GST at 7%.

The only circumstance under which the supply of frames for prescription eyewear is zero-rated is when the frames are incorporated into zero-rated prescription eyewear. I regret to inform you that when your client imports frames for prescription eyewear, the supply is properly subject to the GST at 7%.

This interpretation is based upon our current understanding of the Excise Tax Act and regulations thereunder. Further, while we trust that our comments are of assistance to you, we would advise that they do not constitute a GST ruling and are, therefore, not binding on the Department in respect of any fact situation.

If you would like to discuss this matter further, please do not hesitate to contact Ken Syer, Senior Policy Officer, at (613) 952-9590.

Yours truly,

J.A. Venne
Director
Special Sectors
GST Rulings and Interpretations