19 March 1998 GST/HST Interpretation HQR000107 - GST/HST Status of the Supply of

                                                                        GSTHST Rulings and
Interpretations Directorate                                                 Place Vanier, Tower C, 10th Floor
25 McArthur Avenue
Vanier, Ontario
XXXXX                                                                                 K1A 0L5

Dear XXXXX

Thank you for your letter of February 18, 1998, (with attachments) concerning the application of the Goods and Services Tax (GST)Harmonized Sales Tax (HST) to importation or supply in Canada of XXXXX You also provided a sample for our examination.

Our understanding of the facts, is as follows:

Statement of Facts

Your undisclosed client imports XXXXX into Canada and has been requested to pay to GSTHST on these importations via a Form B 1 Detailed Adjustment Statement.

XXXXX may be described as tinted nonprescription lenses mounted in a frame (in the case of your sample, a wire frame) which are to be attached via clips in front of the lenses of a pair of prescription eyeglasses to reduce excessive sunlight resulting in greater ease of vision for the wearer. This allows the wearer to reduce the glare of the bright lights while still benefitting from the corrective properties of the prescription eyeglasses.

XXXXX and any similar good which can be described as above, are understood to be used only by individuals wearing prescription eyeglasses. Those wearing nonprescription eyeglasses are generally wearing sunglasses and would not need XXXXX

Ruling Requested

You have asked whether XXXXX may be considered a GSTHST zerorated supply pursuant to section 32 of Part II of Schedule VI to the Excise Tax Act (ETA).

Ruling Given

As you are aware, the supply of prescription eyeglasses is zerorated under section 9 of Part II of Schedule VI to the ETA. Section 32 of the same Part provides a zerorated status for the supply of the following:

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

Therefore the supply of specially designed accessories for prescription eyeglasses is zero-rated.

XXXXX have no other use than as described above. Their features are such that they meet the specially designed criterion in section 32. For purposes of the ETA XXXXX are considered to be specially designed accessories for prescription eyeglasses.

Based on the facts set out above, we rule that the importation into Canada or the supply in Canada of XXXXX is zerorated. When importing XXXXX you are advised to use GSTHST Code 57 on the Customs B3 documents.

As a final point, we would like to clarify a comment made in your letter. The Department has not made a determination on the GSTHST status of certain parts for eyeglasses which were noted in your letter, namely: bridges, temples, hinges, nose pads and screws. Therefore it would be inaccurate to state that the supply of the goods in question is zerorated at this time. We are, however, currently examining the status of these goods and a decision will be made in the near future.

This ruling is subject to the general limitations and qualifications outlined in section 1.4 of Chapter 1 of the GST Memoranda Series. We are bound by this ruling provided that none of the above issues is currently under audit, objection, or appeal; that there are no relevant changes in the future to the Excise Tax Act, or to departmental interpretative policy; and that you have fully described all necessary facts and transaction(s) for which you requested a ruling.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-9590.

Yours truly,

Ken Syer
Senior Rulings Officer
Municipalities and Health Care Services Unit
Public Service Bodies and Governments Division
GST/HST Rulings and Interpretations Directorate

NCS Subject Code: 2