GST/HST Notices - Notice 296
May 2016

1. What does the amendment propose to change?

Urinary appliances that are designed to be worn by an individual are currently included in the list of zero-rated medical and assistive devices found in Part II of Schedule VI to the Act. Intermittent urinary catheters are an alternative to catheters that are left in place.

The amendment proposes to add intermittent urinary catheters, if supplied on the written order of a medical doctor, registered nurse, occupational therapist or physiotherapist for use by a consumer named in the order, to the list of GST/HST zero-rated medical and assistive devices.

This measure would apply to supplies made after March 22, 2016.

2. What does zero-rated mean?

Zero-rated means that no GST/HST is charged when the product is supplied, as the tax rate is 0%. However, a GST/HST registrant can claim an input tax credit for the GST/HST paid or payable on purchases and expenses made to provide zero-rated supplies, when all necessary conditions are met.

3. Can suppliers stop charging GST/HST on intermittent catheters before the amendment receives royal assent?

Yes, in accordance with the proposed amendment, suppliers can stop charging GST/HST on supplies of intermittent urinary catheters, supplied pursuant to a written order, on or after March 23, 2016. This proposed measure is subject to parliamentary approval. However, consistent with its standard practice, the CRA is administering this measure on the basis of Bill C-15.

4. What should I do if a supplier charged me GST/HST on intermittent urinary catheters supplied on or after March 23, 2016?

A supplier who has charged or collected the GST/HST on intermittent urinary catheters supplied pursuant to a written order, on or after March 23, 2016, must include that amount in the calculation of net tax on their GST/HST return, and remit that net tax if there is a balance owing, according to the regular rules.

If the proposed amendment becomes law, you may then contact the supplier, who may choose to adjust the amount charged, or refund or credit the amount collected. If so, the supplier must provide you with a credit note for the amount. Alternatively, you can file a rebate claim with the CRA for the tax paid in error by using Form GST189, General Application for Rebate of the GST/HST.

The CRA cannot pay a rebate for tax paid in error prior to proposed legislation becoming law.

5. How will the proposed amendment apply in provinces that have a provincial sales tax?

The proposed amendment only applies for GST/HST purposes. This means that although a supplier in a province that has a provincial sales tax may stop charging GST on a supply of intermittent urinary catheters in accordance with the proposed amendment, provincial sales tax may still apply to such sales. Any questions relating to the provincial sales tax should be addressed to the province in question.

Further information