20 October 1998 GST/HST Interpretation HQR0001286 - Temporary Importation of Equipment for Evaluation Purposes

                                                                        GST/HST Rulings and Interpretations
 Directorate
Place Vanier, Tower C, 10th Floor
25 McArthur Road
Vanier, Ontario
XXXXX                                                                                 K1A 0L5

Dear Sir:

Thank you for your facsimile message of August 13, 1998, concerning the application of the Goods and Services Tax/Harmonized Sales Tax (GST/HST) to the temporary importation of machinery or equipment for evaluation purposes.

Statement of Facts

A hospital authority that is resident in Canada temporarily imports equipment from a non-resident supplier for evaluation purposes and subsequently exports the property back to the original supplier.

Interpretation Requested

Are there any provisions under the GST/HST legislation which would allow hospitals to temporarily import goods for evaluation purposes relieved from the tax?

Interpretation Given

All goods imported into Canada are taxable unless specifically relieved under section 213 of the Excise Tax Act (Act). Goods relieved of tax under section 213 of the Act are included in Schedule VII to the Act. Machinery, equipment or other articles that are imported to be evaluated are not included in the provisions of Schedule VII to the Act or the Non-Taxable Imported Goods (GST) Regulations and, as such, are taxable at time of importation.

Departmental policy contained in Customs Notice N-118 states that goods that are temporarily imported and then exported, where GST at 7% (and full or partial relief of customs duty) was paid at the time of importation, are considered to be tax paid for purposes of any subsequent importation. Therefore, where a hospital authority returns the equipment to the non-resident supplier, any subsequent importation by the hospital authority of that same equipment will not attract GST.

The foregoing comments represent our general views with respect to the subject matter of your letter. Proposed amendments to the Excise Tax Act, if enacted, could have an effect on the interpretation provided herein. These comments are not rulings and, in accordance with the guidelines set out in section 1.4 of Chapter 1 of the GST/HST Memoranda Series, do not bind the Department with respect to a particular situation.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-8532.

Yours truly,

J. Frobel
A/Rulings Officer
Border Issues Unit
General Operations and Border Issues Division
GST/HST Rulings and Interpretations Directorate