FAQ - GST/HST Relief for Face Masks and Face Shields
1. On November 30, 2020, the Government of Canada announced a proposed measure to relieve certain products from GST/HST. What products are subject to this relief?
The announcement proposes to amend the Excise Tax Act to remove the GST/HST on certain supplies of face masks and face shields that are made after December 6, 2020, by making them zero-rated.
The following products are proposed to be relieved of GST/HST:
- Face masks or respirators that are designed for human use and that are authorized for medical use in Canada.
- Face masks or respirators that meet or exceed N95, KN95 or equivalent certification requirements, that are designed for human use and that do not have an exhalation valve or vent.
- Face masks or respirators that:
- are designed for human use;
- are 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;
- are large enough to completely cover the nose, mouth and chin without gaping;
- have ear loops, ties or straps for securing the face mask or respirator to the head;
- are for use in preventing the transmission of infectious agents such as respiratory viruses; and
- do not have an exhalation valve or vent.
- Face shields that are designed for human use, have a transparent and impermeable window or visor, cover the entire face and have a head strap or cap for holding them in place (but not including face shields specifically designed or marketed for a use other than preventing the transmission of infectious agents such as respiratory viruses).
- Prescribed face masks, respirators or shields (none are prescribed at this time).
2. What does zero-rated mean?
The proposed measure would zero-rate supplies of face masks, respirators and face shields as described above. Zero-rated means that no GST/HST is charged when the product is sold, 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 expenses made to provide zero-rated supplies.
3. Can suppliers stop charging GST/HST on face masks, respirators and face shields that are proposed to be zero-rated before the amendment receives Royal Assent?
Yes, in accordance with the announcement, suppliers can stop charging GST/HST on these products that are supplied after December 6, 2020. This proposed measure is subject to parliamentary approval. However, consistent with its standard practice, the CRA is administering this measure on the basis of the announcement.
4. What should I do if a supplier charges me GST/HST on the face masks, respirators or face shields that are proposed to be zero-rated that I purchase after December 6, 2020?
If a supplier charges GST/HST on these products, the supplier must include that amount in the calculation of their net tax on their GST/HST return, and pay that net tax if there is a balance owing, according to the regular rules. If the proposed amendment becomes law, you may then either go to the supplier to get a refund or credit of the amount, or you can file a rebate claim with the CRA if the amount exceeds $2. The CRA cannot pay a rebate for an amount paid in error prior to the proposed legislation becoming law.
5. How will the proposed amendment apply in provinces that have a provincial sales tax?
The proposed amendment only applies to GST/HST. This means that although a supplier in a province that has a provincial sales tax may stop charging GST on a supply of face masks, respirators or face shields in accordance with the announcement, 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.
6. Will the importation of the face masks, respirators and face shields that are proposed to be zero-rated be relieved of GST/HST?
Yes, such face masks, respirators and face shields imported after December 6, 2020, will be relieved of GST/HST.
7. Where can I get more information on the proposed change?
The CRA is committed to providing taxpayers with up-to-date information. The announcement can be viewed on the Department of Finance Canada website. The CRA also encourages taxpayers to check its website.
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