10 June 1996 GST/HST Interpretation 11860-2[5] - The Application of the Goods and Services Tax (GST) to the Supply of Batteries for Wheelchairs

Dear XXXXX:

This is further to your recent telephone discussions with Ken Syer of this office regarding the application of the Goods and Services Tax (GST) to the supply of batteries for wheelchairs.

In our ongoing review of Revenue Canada decisions under the GST we came across a decision which does not reflect the wording of the legislation. This policy was expressed in a question and answer on the GST database which is available to the general public. The treatment was as follows:

Part II of Schedule VI to the Excise Tax Act lists medical devices, the supply of which is zero-rated (taxable at the rate of 0%) for GST purposes. Section 14 of Part II provides a zero-rated status for, among other things, wheelchairs. Section 32 of that Part provides a zero-rated status for the supply of a part, accessory or an attachment that is specially designed for zero-rated medical devices (which includes wheelchairs). The result is that the supply of specially designed parts, accessories or attachments for wheelchairs is zero-rated under section 32.

On this subject, a question and answer on the database previously stated that the supply of generic wheelchair batteries which are not specially designed for wheelchairs is zero-rated under section 32. In our opinion this did not properly reflect the intent of the provision. The question and answer is being revised. The revised question and answer will state that the supply of generic batteries is properly taxable at 7% and the supply of only specially designed batteries is zero-rated.

In recognition of the fact that this information may need some time to disseminate, this change will be effective August 1, 1996. Please inform your members of this decision.

If you would like to discuss this matter further, please do not hesitate to contact Ken Syer, A/Senior Policy Officer, at (613) 952-9590.

Yours truly,

J.A. Venne
Director
Public Service Bodies and Government
GST Rulings and Interpretations