The appellant, a non-resident corporation selling contact lenses online to Canadian consumers, appealed a GST/HST reassessment.
The appellant argued the sales were zero-rated supplies under section 9 of Part II of Schedule VI of the Excise Tax Act, which exempts contact lenses supplied under a prescription.
The Minister assessed the sales as taxable because the appellant did not verify or keep records of the consumers' prescriptions.
The Tax Court of Canada dismissed the appeal, holding that to qualify as a zero-rated supply, the registrant must obtain and keep a copy of a valid prescription or assessment record to prove the lenses were for the treatment or correction of a vision defect.
Without such documentation, the supply is taxable.
