27 July 2000 GST/HST Interpretation 31712 - Warranty Replacement Goods

Dear XXXXX

Thank you for your facsimile letter of June 20, 2000, to Ivan Bastasic, concerning the application of the Section 5 of Schedule VII of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to your operations.

Interpretation Requested

Where goods are imported as replacement goods under a warranty can GST code 55 be applied to exempt payment on commercial goods?

Interpretation Given

Based on the information provided, we are pleased to provide you with the following interpretation.

Section 5 of Schedule VII of the Excise Tax Act (the Act) provides for non-taxable status on the importation of goods that are imported by a particular person where the goods are supplied to the particular person by a non-resident person for no consideration other than shipping and handling charges, as replacement parts or replacement property under a warranty in respect of tangible personal property.

Section 123 of the Act provides that "person" means an individual, a partnership, a corporation, the estate of a deceased individual, a trust, or a body that is a society, union, club, association, commission or other organization of any kind.

Therefore, the benefits of section 5 of Schedule VII to the Act are available whether the importer is an individual or a company and whether the goods are for commercial or non-commercial use. GST code 55, as described in Customs' Memorandum D17-1-10, may be quoted on the Customs entry document where the goods qualify as a non-taxable importation under section 5 of Schedule VII of the Act, as described above.

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 Canada Customs and Revenue Agency 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) 952-4294.

Yours truly,

Francine Ménard
Border Issues Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate