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, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
XXXXX
XXXXX
XXXXX
Case Number: 90170
Attention: XXXXX
XXXXX
18th February 2009
Subject:
GST/HST RULING
Supplies of Drugs Prescribed by Pharmacists and Associated Dispensing Fees
Dear XXXXX:
This is further to your letter of XXXXX, and your XXXXX, in which you requested confirmation of the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to supplies made by pharmacies of drugs prescribed by pharmacists in the Province of Alberta and to dispensing fees for drugs prescribed by pharmacists and other health care professionals who are not medical practitioners.
As we discussed in our telephone conversations in XXXXX, officials of the Department of Finance had advised the Canada Revenue Agency (CRA) that they were reviewing this matter. On February 26, 2008, the Minister of Finance announced proposed amendments to section 1 and paragraph 3(b) of Part I of Schedule VI to the Excise Tax Act (ETA) concerning the application of the GST/HST to supplies made by pharmacies of drugs prescribed by pharmacists and health care professionals who are not medical practitioners. These amendments received Royal Assent on June 18, 2008. As discussed in the Explanation below, these amendments extend zero-rated status to supplies made after February 26, 2008 of drugs prescribed by authorized individuals.
All legislative references are to the ETA and the regulations thereunder, unless otherwise specified.
Statement of Facts
On the basis of your letter and our research, our understanding of the facts is as follows:
1. XXXXX.
2. In the Province of Alberta, the Pharmacists Profession Regulation made pursuant to section 131 of the Health Professions Act, RSA 2000, c. H-7, came into effect on April 1, 2007.
3. The Pharmacists Profession Regulation grants clinical pharmacists licensed by the Alberta College of Pharmacists authority to prescribe a drug listed in Schedule 1 of the Pharmacy and Drug Act, RSA 2000, c. P-13 under limited conditions and to administer drugs by injection.
4. A "clinical pharmacist" is defined in the Pharmacists Profession Regulation. These pharmacists are members of the Alberta College of Pharmacists who are registered in the clinical register category of the regulated members register.
5. Drugs listed in Schedule 1 of the Pharmacy and Drug Act include drugs in Schedule F to the Food and Drug Regulations made under the Food and Drugs Act, R.S.C. 1985, c. F-27 and drugs set out in a Schedule to the Controlled Drugs and Substances Act, S.C. 1996, c. 19.
6. Pharmacist prescribing differs from prescribing by other health professionals in that generally a pharmacist will prescribe in partnership with another health professional after a diagnosis or decision for treatment has been made by the other health professional. This means that pharmacists may alter a dosage or formulation or regimen to ensure that the prescribed therapy best meets the need of the patient.
7. Pharmacists may also provide a refill of a prescription that a patient takes regularly, as long as the pharmacist determines that it is in the best interests of the patient to continue the therapy. The refill is intended to tide patients over until they can see their physician.
8. If a patient has an immediate need for drug therapy and cannot see another health professional to receive a prescription, a pharmacist may prescribe a small amount of a drug to treat symptoms until the patient can see someone to make a diagnosis.
9. Other provinces are also considering regulatory changes to provide pharmacists with the authority to prescribe drugs for human use.
Rulings Requested
1. In the Province of Alberta and other jurisdictions where pharmacists may legally prescribe drugs for human use, zero-rated status would apply to the supply made by the pharmacy of a drug prescribed by a pharmacist.
2. Zero-rated status applies to dispensing fees charged by pharmacies for supplies of drugs prescribed by pharmacists and other health care professionals who are not medical practitioners in jurisdictions where they may legally prescribe drugs.
Rulings Given
1. Effective for supplies made after February 26, 2008, in the Province of Alberta and other jurisdictions where pharmacists are authorized to prescribe drugs, a supply made by a pharmacy of a drug for human use that is prescribed by a pharmacist for the personal consumption or use of an individual named in the prescription is zero-rated pursuant to paragraph 3(b) of Part I of Schedule VI to the ETA.
2. A supply made by a pharmacy of a service of dispensing a drug where the supply of that drug is included in Part I of Schedule VI is zero-rated pursuant to section 4 of this Part. Therefore, effective for supplies made after February 26, 2008, zero-rated status applies to a dispensing fee charged by pharmacies for a supply of a drug made in the circumstances described in Ruling 1 above where the drug is:
• prescribed by a medical practitioner; and
• prescribed by a health care professional other than a medical practitioner who is authorized to prescribe drugs for individuals.
These rulings are subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by these rulings 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
Paragraph 3(b) of Part I of Schedule VI zero-rates a supply of a drug made by a pharmacy if the drug is for human use and is dispensed by a pharmacist on the prescription of a medical practitioner or authorized individual for the personal consumption or use of the individual named in the prescription.
As noted above, the Minister of Finance expanded this zero-rating provision to include drugs that are prescribed by an authorized individual. The relevant definitions to the zero-rating provision in question are found in section 1 of Part I of Schedule VI and are as follows:
A "medical practitioner" means a person who is entitled under the laws of a province to practise the profession of medicine or dentistry.
An "authorized individual" means an individual, other than a medical practitioner, who is authorized under the laws of a province to make an order directing that a stated amount of a drug or mixture of drugs specified in the order be dispensed for the individual named in the order.
A "prescription" means a written or verbal order, given to a pharmacist by a medical practitioner or authorized individual, directing that a stated amount of any drug or mixture of drugs specified in the order be dispensed for the individual named in the order.
A "pharmacist" means a person who is entitled under the laws of a province to practise the profession of pharmacy.
As a result of these amendments, paragraph 3(b) of Part I of Schedule VI has the effect of zero-rating supplies made by pharmacies of a drug prescribed by a medical practitioner or by an authorized individual who is authorized to prescribe the drug under provincial legislation, when the drug is dispensed for the personal consumption or use of the individual named in the order. As previously indicated, these amendments apply to a supply made after February 26, 2008. However, a transitional rule provides that these amendments also apply to a supply made on or before February 26, 2008, if no GST/HST was charged, collected or remitted on or before that day in respect of the supply.
Consequently, if a pharmacy did charge, collect or remit the GST/HST on or before February 26, 2008 in respect of a supply made on or before that day, the amendment will not apply. Therefore, no refund or rebate is available for any GST/HST charged, collected or remitted on these supplies of a drug prescribed by a pharmacist or other health professional, including the associated dispensing fee.
As noted in the Statement of Facts, clinical pharmacists were also given authority under Pharmacists Profession Regulation to administer drugs by injection in limited conditions. Please note that with the exception of dispensing services, this ruling does not apply to services rendered by pharmacists, including consultation services and administering drugs by injection.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-952-6761. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Yours truly,
Susan Eastman
Municipalities and Health Care Service Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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