Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
GST/HST Rulings Directorate
5th floor, Tower A, Place de Ville
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 246083
[Dear Client]
Subject: GST/HST RULING
Purchase and importation of face masks
Thank you for your correspondence of[mm/dd/yyyy], concerning the application of the goods and services tax/harmonized sales tax (GST/HST) on the purchase of various[…][face masks]. We apologize for the delay in responding.
The HST applies in the participating provinces at the following rates: 13% in Ontario; and 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island. The GST applies in the rest of Canada at the rate of 5%.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
STATEMENT OF FACTS
Our understanding of the facts are as follows:
1. […][The Product] is a multipurpose respirator that substantially protects against airborne particles and is designed to fit both adults and children.
2. You have provided product information for our review, including pictures of the [the Product] in both adult and children sizes […].
3. The Products are made by […] (the Manufacturer), a […] manufacturer [located outside of Canada].
4. You purchased the Products for importation on [mm/dd/yyy] and was charged GST/HST at the time of importation.
5. On the packaging, the Products are described as […].
6. The packaging further describes the Products as follows: […].
7. You have indicated in your incoming request that the Products meet the […][Country Z] standard, which is the N95 equivalent for [Country Z].
8. As evidence that the Products meet the requirements to be considered equivalent to an N95 mask, you have provided […][a safety report on the Products from Country Z].
RULING REQUESTED
You would like to know whether supplies of the Products are zero-rated for GST/HST purposes.
RULING GIVEN
Based on the facts set out above, we rule that supplies of the Products are not zero-rated and are subject to GST/HST at the applicable rate.
EXPLANATION
Sections 2 to 5 of Part II.1 of Schedule VI zero-rate supplies of certain face masks, respirators and face shields.
Section 2 of Part II.1 of Schedule VI zero-rates supplies of face masks and respirators that are designed for human use and are authorized for medical use in Canada. As it is our understanding that the Products are not authorized for medical use in Canada, supplies of the Products would not be zero-rated under section 2.
Section 3 of Part II.1 of Schedule VI zero-rates supplies of face masks and respirators that meet N95, KN95 or equivalent certification requirements. You have indicated in your incoming request that the Products meet the requirements to be considered equivalent to an N95 certification. However, based on the information provided, it is our opinion that the Products do not meet the requirements of this section.
For the purposes of Section 3, an N95 face mask or respirator is a mask or respirator with an approval number stamped on the device, represented as TC-84A-####, that has been approved by the United States of America’s National Institute for Occupational Safety and Health (NIOSH). A KN95 face mask or respirator is a mask or respirator that meets the standard GB 2626-2019.
During the [COVID_19] pandemic, all of the following standards were considered equivalent under the Interim Orders issued by Health Canada:
- 95PFE products or CSA certified CA-N95 and CA-N99 type respirators as marked according to the CSA Z94.4.1 standard.
- KF94 respirators that meet standard KMOEL–2017-64.
- FFP2 respirators that meet standard EN 149-2001.
Based on the information provided in your request, it appears that the Products do not meet any of these certification standards.
Section 4 of Part II.1 of Schedule VI zero-rates supplies of face masks and respirators designed for human use that are used in preventing the transmission of infectious agents such as respiratory viruses, if they meet the following construction requirements:
- they are made of multiple layers of dense material, but may, under certain conditions, have a portion in front of the lips that permits lip reading;
- they are large enough to completely cover the nose, mouth and chin without gaping;
- they have ear loops, ties or straps for securing the face mask or respirator to the head; and
- they do not have an exhalation valve or vent.
Please note that the Products are designed to be secured without the use of ear loops, ties or straps and therefore do not meet the requirements of section 4.
Section 5 of Part II.1 of Schedule VI zero-rates supplies of face shields designed for human use that have a transparent and impermeable window or visor, cover the entire face and have a head strap or cap for holding them in place. This section does not zero-rate supplies of face shields specifically designed or marketed for a use other than preventing the transmission of infectious agents, such as respiratory viruses. […], the Products do not meet the requirements of this section.
Therefore, given that the Products do not fall within sections 2 to 5 of Part II.1 of Schedule VI, the supply of the Products will be subject to GST/HST at the applicable rate. You are therefore not entitled to a refund of the GST/HST you paid on the Products at the time of importation.
Please note that Budget 2024, as announced on April 16, 2024, proposes to amend the ETA to repeal the zero-rating of certain face masks, respirators and face shields for GST/HST purposes. This measure, if enacted, would apply to any supplies made on or after May 1, 2024.The temporary relief announced in the 2020 Fall Economic Statement was proposed to be in effect until the use of face coverings was no longer broadly recommended by public health officials for the COVID-19 pandemic.
DISCLAIMER
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1-4, Excise and GST/HST Rulings and Interpretations Service, the interpretation(s) given in this letter, including any additional information, is not a ruling and does not bind the Canada Revenue Agency (CRA) with respect to a particular situation. Future changes to the ETA, regulations, or the CRA’s interpretative policy could affect the interpretation(s) or the additional information provided herein.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 905-429-1696. Should you have additional questions on the interpretation and application of the GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287 or by fax to 1-418-566-0319.
Sincerely,
Siraj Patel
Senior Rulings Officer
Strategic and Emerging Issues Unit
General Operations and Border Issues Division
GST/HST Rulings Directorate
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