Case information

Taxation — Goods and services tax — Minister of Revenue disallowing input tax credits claimed by respondent — What is the correct approach to the fundamental question of what is a “supply” under the Excise Tax Act — Whether the proposed appeal will answer the question of whether the characterization of a transaction on the facts should be the starting point of the analysis in ascertaining the applicable tax treatment of the transaction — Whether the Federal Court of Appeal has introduced uncertainty and unpredictability by ignoring the test endorsed by the Court to determine the nature of a supply for the purposes of the Excise Tax Act — Excise Tax Act, R.S.C.1985, c. E-15.

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

The respondent, Dr. Kevin L. Davis Dentistry Professional Corporation (“Davis Dentistry”), operates a group of orthodontic practices. It was reassessed by the Minister for two reporting periods, disallowing the Input Tax Credits (“ITCs”) claimed that would have allowed it to recoup a portion of the GST it paid in carrying on business, on the basis that Davis Dentistry did not comply with the requirement to separately identify the consideration for the orthodontic appliances on its patient invoices. Since the 1990s, under an administrative arrangement between the Minister of Finance and the Canadian Dental Association, orthodontists have been allowed to claim ITCs with respect to zero-rated orthodontic appliances supplied to their patients. Davis Dentistry successfully appealed this decision, which was upheld on appeal.