Canada Border Services Agency issued customs notice CN 20-34 on December 7, 2020 that provides information on the Legislative Proposals to Amend the Excise Tax Act, where, in support of public health during the COVID-19 pandemic, the Government of Canada proposes to temporarily relieve (i.e., zero rate) supplies of certain face masks and face shields from the Goods and Services Tax / Harmonized Sales Tax (GST/HST). The Fall Economic Statements 2020 announced the change in Annex 4 Tax Measures: Supplementary Information.
This proposed temporary relief is applicable for goods that meet the requirements found in paragraph 3 below, which are imported after December 6, 2020. The relief will only be in effect until their use is no longer broadly recommended by public health officials for the COVID-19 pandemic, at which time CBSA will issue an updated Customs Notice.
The legislative proposals provide that:
- (1) Part II.1 of Schedule VI to the Excise Tax Act is amended by adding the following after section 1:
- A supply of a face mask or respirator that is designed for human use and is authorized for medical use in Canada.
- A supply of a face mask or respirator that meets N95, KN95 or equivalent certification requirements, is designed for human use and does not have an exhalation valve or vent.
- A supply of:
- (a) a face mask or respirator that
- (i) is designed for human use
- (ii) is made of multiple layers of dense material, but may have a portion in front of the lips made of transparent and impermeable material that permits lip reading provided that there is a tight seal between the transparent material and the rest of the face mask or respirator
- (iii) is large enough to completely cover the nose, mouth and chin without gaping
- (iv) has ear loops, ties or straps for securing the face mask or respirator to the head
- (v) is for use in preventing the transmission of infectious agents such as respiratory viruses and
- (vi) does not have an exhalation valve or vent or
- (b) a prescribed mask or respirator
- (a) a face mask or respirator that
- A supply of:
- (a) a face shield that is designed for human use, has a transparent and impermeable window or visor, covers the entire face and has a head strap or cap for holding it in place, but not including a supply of a face shield specifically designed or marketed for a use other than preventing the transmission of infectious agents such as respiratory viruses or
- (b) a prescribed shield
- (2) Subsection (1) applies to supplies made after December 6, 2020
Imports of goods that are eligible for relief under the Legislative Proposals to Amend the Excise Tax Act as described in paragraph 3 above, may be accounted for under the tariff items listed and described in Appendix A. Please note, Appendix A is a non-exhaustive list.
Application
All claims for relief of GST/HST under the Legislative Proposals to Amend the Excise Tax Act must also include all relevant documents (e.g. copy of original Form B3-3, bill of lading, sales invoice, waybill, sales contract, etc.) that demonstrate that the imported goods match the prescribed goods described in Part II.1 of Schedule VI to the Excise Tax Act and, that they were imported after December 6, 2020.
In respect of commercial goods which meet the requirements listed in paragraph 3, importers must report the GST status code in field 35 “Rate of GST” of Form B3-3 by inserting code “57” for the GST.
For casual goods (non-commercial) which meet the requirements listed in paragraph 3, at time of import, Form BSF715 or BSF715-1 Casual Goods Accounting Document, or Form E14, CBSA Postal Import Form, will be completed according to standard procedures, without collection of GST/HST.
For certainty regarding the tariff classification of a good, importers may request an advance ruling on tariff classification. Details on how to make such a request can be found in Memorandum D11-11-3, Advance Rulings for Tariff Classification.
To determine whether a particular good or similar goods qualify for the relief, you may call the GST/HST Rulings Centre at 1-800-959-8287 or request a written ruling or interpretation. If the physical location of your business is in Quebec, contact Revenu Québec, at 1-800-567-4692.