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:

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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