Application of the GST/HST to Lift Chairs

GST/HST Info Sheet GI-133
January 2013

This info sheet explains how the goods and services tax (GST)/harmonized sales tax (HST) applies to:

• the sale and lease of lift chairs;
• specially designed parts, accessories and attachments to lift chairs; and
• services relating to installing, maintaining, restoring, repairing or modifying lift chairs.

Meaning of significant terms used in this publication

"Consumer" means a particular individual who acquires or imports property or a service for the individual's personal consumption, use or enjoyment or the personal consumption, use or enjoyment of another individual at the particular individual's expense. A consumer is not an individual who acquires or imports the property or a service for consumption, use or supply in the course of commercial activities or for making exempt supplies.

"Disability" refers to a long-term impairment lasting at least 12 months that restricts an individual in carrying out his or her activities of daily living. The individual's disability may be congenital, may be the result of an injury or a neuromuscular disorder such as muscular dystrophy or multiple sclerosis, or may result from conditions such as cerebral palsy, paraplegia, amputation, pulmonary disease, heart disease, arthritis, diabetes, and back disorders. An individual with a disability does not include an elderly or frail person who is otherwise able-bodied, or any person who is only temporarily disabled or incapacitated.

"Specified professional" means a person that is entitled under the laws of a province to practise the profession of medicine, physiotherapy or occupational therapy; or a registered nurse.

"Zero-rated" refers to a supply that is taxable at the rate of 0%.

Background

Certain sales or leases of medical and assistive devices are zero-rated in their own right (e.g., supplies of artificial eyes or hearing aids) while other devices are zero-rated only when certain conditions are met (e.g., when specially designed for use by an individual with a disability or when supplied on the written order of a specified professional). Lift chairs are zero-rated when certain conditions are met.

GST/HST relief for lift chairs

Lift chairs are designed to help people who have physical disabilities that make it difficult to sit down and rise up from chairs. The chairs feature electric motors that raise the chair to an elevated position for the purpose of assisting a user to sit down in the chair and also to help the user rise up from the chair.

The sale or lease of a lift chair is zero-rated if it meets the following conditions:

• the lift chair has all the features of a chair;
• the lift chair is specially designed for use by an individual with a disability;
• the lift chair is supplied on the written order of a specified professional for use by a consumer named in the order.

When all these conditions are met, the sale or lease of the lift chair is zero-rated, regardless of where the lift chair is sold. For example, when all the conditions are met, a lift chair sold in a pharmacy or in a general furniture store is zero-rated.

Chair

The Canada Revenue Agency (CRA) considers a "chair" to be a type of seat with a specific form consisting of a base or frame that sits on the ground (often with four legs), a surface area for sitting and, in most instances, a back. A chair generally provides the ideal height and stability that allows the chair to be used on its own by an individual as a seat.

Specially designed for use by an individual with a disability

A lift chair is specially designed if it has design features that assist an individual with a disability to get in and out of the chair independently without which an individual would not be able to do so. A specially designed lift chair includes design features such as:

• a lifting mechanism that raises and slightly tilts the chair to raise the individual from a sitting position to a standing position and back again; and
• the base or frame of the lift chair is stable and remains stationary.

A lift chair that includes these features would be zero-rated even if it had a reclining feature, regardless of how the lift chair is advertised.

Supplied on the written order of a specified professional for use by a consumer named in the order

A lift chair specially designed for use by an individual with a disability is zero-rated if it is supplied on the written order of a specified professional for use by a consumer named in the order. Prior to March 29, 2012, these lift chairs were zero-rated if supplied on the written order of a physician.

Suppliers who supply lift chairs on a zero-rated basis must retain sufficient documentation for the CRA to verify that the sale or lease of the lift chair is made on the written order of a specified professional for use by a consumer named in the order.

The CRA considers a written order as a written instruction or instructions that govern the plan of health care for an individual patient or client.

The written order should contain the individual's name, the specified professional's signature, date, and confirmation that the individual has a disability that the features of a specially designed lift chair can address. The written order should be separate from any order form or invoice against which the chair is supplied.

Specially designed parts, accessories and attachments

Any part, accessory or attachment that is specially designed for a zero-rated lift chair is also zero-rated.

Where an individual upgrades the fabric of the chair or acquires additional features at the time of the original purchase, these items are considered part of the original supply of the lift chair regardless of whether the upgrades are listed separately on the invoice.

Servicing zero-rated lift chairs

A service of installing, maintaining, restoring, repairing or modifying a zero-rated lift chair, including the supply of any necessary or spare parts, is zero-rated.

A professional maintenance check performed on a zero-rated lift chair is also zero-rated.

Tax paid in error

Where a supplier has charged GST/HST on the sale of a zero-rated lift chair, the supplier may refund or credit the GST/HST to the purchaser. If the supplier refunds or credits the amounts collected as GST/HST, it must do so within two years after the day the amount was charged or collected and it must provide the purchaser with a credit note containing specific information.

Alternatively, purchasers who have paid an amount as GST/HST on zero-rated supplies may claim a rebate of tax paid in error using Form GST189, General Application for Rebate of GST/HST. The time limit to apply for this rebate is two years after the day the amount was paid by the purchaser.

For more information, refer to GST/HST Memorandum 12.2, Refund, Adjustment, or Credit of the GST/HST under Section 232 of the Excise Tax Act.

All technical publications related to GST/HST are available on the CRA Web site at www.cra.gc.ca/gsthsttech.