Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 14th floor
320 Queen Street
Ottawa ON K1A 0L5
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Case Number: 98709
May 6, 2008
Subject:
GST/HST RULING
Importation and Supply of the XXXXX
Dear XXXXX:
Thank you for your letter XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the supply of the XXXXX and its accessories made by XXXXX.
All legislative references are to the Excise Tax Act (ETA) and the regulations thereunder, unless otherwise specified.
Statement of Facts
1. XXXXX is the exclusive Canadian importer XXXXX.
2. XXXXX is a single use surgical device XXXXX.
3. XXXXX.
4. XXXXX.
Ruling Requested
You would like to know whether XXXXX is required to charge the GST/HST on its supply of XXXXX and its accessories.
Ruling Given
The supply of the XXXXX and its accessories is a taxable supply and pursuant to subsection 165(1), XXXXX is required to collect the GST/HST on the value of the consideration for this supply at the rate of 5% or pursuant to subsections 165(1) and (2) at a rate of 13% where the supply is made in a participating province (Nova Scotia, New Brunswick, and Newfoundland and Labrador).
This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.
Explanation
Generally all supplies of goods and services made in Canada are subject to the GST/HST at the rate of 5% or 13% unless specifically relieved under the ETA. There are exceptions for medical devices that are specifically identified in Part II of Schedule VI as being zero-rated; i.e., the tax applies at the rate of 0%. If a medical device is not included in Part II of Schedule VI, then the supply of the medical device remains subject to tax. There is no provision in Part II of Schedule VI that would apply to the supply of surgical tools and equipment and therefore the supply of the XXXXX and its accessories are properly subject to tax.
Regarding the importation by XXXXX of the XXXXX, please note that the GST/HST applies equally to imported goods as well as to goods supplied in Canada. Section 212 requires every person who is liable under the Customs Act to pay duty on imported goods, or who would be so liable if the goods were subject to duty, to pay GST on the goods calculated at the rate of 5% on the value of the goods. Section 212.1 imposes the provincial component of the HST at a rate of 8% in respect of non-commercial importations by residents of the participating provinces (Nova Scotia, New Brunswick, and Newfoundland and Labrador). This tax applies in addition to the tax imposed under section 212. If the supply of a medical device is included in Part II of Schedule VI that device may be imported on a non-taxable basis pursuant to section 6 of Schedule VII. However, as the supply of the XXXXX is not included in Part II of Schedule VI it does not constitute a non-taxable importation for GST/HST purposes.
XXXXX.
Yours truly,
Art Blommesteijn
Municipalities and Health Care Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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