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.
XXXXX
XXXXX
XXXXX
XXXXX
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 14th floor
320 Queen Street
Ottawa ON K1A 0L5
Case Number 102758
Attention: XXXXX XXXXX
April 22, 2010
Dear XXXXX:
Subject:
GST/HST INTERPRETATION
Supplies of XXXXX by a Medical Practitioner for Cosmetic Purposes
Thank you for your letter of XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the supply of XXXXX performed by a medical practitioner for cosmetic purposes. You are requesting a ruling as it relates to the application of section 5 of Part II of Schedule V to the Excise Tax Act (ETA) in respect of these supplies.
Please note that we are providing you with an interpretation rather than a ruling as proposed amendments to this provision were announced on March 4, 2010, by the Minister of Finance and are included in Bill C-9. Please note that, in accordance with its administrative procedures on its GST/HST rulings service outlined in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the Canada Revenue Agency does not issue rulings on proposed or draft legislation, draft regulations, federal budget proposals, or Notices of Ways and Means Motions. The CRA may issue interpretations based on these documents.
All legislative references are to the ETA and the regulations thereunder, unless otherwise specified.
The Government of Canada and the Government of Ontario have signed a Comprehensive Integrated Tax Coordination Agreement for the implementation of the HST in Ontario. The HST will come into effect in Ontario on July 1, 2010, at a rate of 13%, consisting of a 5% federal part (equivalent to the existing GST) and an 8% provincial part.
Legislation required to implement the HST in Ontario has received Royal Assent by the Parliament of Canada and the Legislative Assembly of Ontario. However, many of the rules which would apply to transactions will be contained in regulations made under the Act. Although the Government of Ontario has announced details of the rules which may eventually apply, the required regulations have not yet been made by the Government of Canada.
Ruling Requested
You would like to know if the supply of XXXXX is exempt pursuant to section 5 of Part II of Schedule V.
Interpretation Given
Generally all supplies of goods and services made in Canada are subject to the GST/HST at the rate of 5% or 13% unless the supply is specifically identified as being an exempt supply or a zero-rated supply. "Exempt supplies" are listed in Schedule V and are not subject to GST/HST. "Zero-rated supplies" are taxable at the rate of 0% and are listed in Schedule VI.
On March 4, 2010, the Minister of Finance announced proposed amendments to Part II of Schedule V. The purpose of the proposed amendments is to clarify that the GST/HST applies to all purely cosmetic procedures.
Section 1 of Part II of Schedule V is amended by adding the definition of "cosmetic service supply." This is defined as "a supply of a property or service that is made for cosmetic purposes and not for medical or reconstructive purposes."
Part II of Schedule V is amended by adding section 1.1. Section 1.1 states that "For the purposes of this Part, other than section 9, a cosmetic service supply and a supply, in respect of a cosmetic service supply, that is not made for medical or reconstructive purposes are deemed not to be included in this Part."
Section 5 of Part II of Schedule V is amended to exempt "A supply of a consultative, diagnostic, treatment or other health care service that is rendered by a medical practitioner to an individual."
The supply of XXXXX for cosmetic purposes would be a "cosmetic service supply" as defined in section 1 of Part II of Schedule V. Section 1.1 of Part II of Schedule V deems that a cosmetic service supply is deemed not to be included in Part II of Schedule V. Therefore, the supply of XXXXX, when performed for cosmetic purposes by a medical practitioner, would be subject to the GST/HST.
The proposed amendments will apply to the following supplies:
(a) supplies made after March 4, 2010
(b) supplies made on or before that day if
(i) all of the consideration for the supply becomes due after March 4, 2010, or is paid after that day without becoming due, or
(ii) any consideration for the supply became due, or was paid, on or before that day, unless the supplier did not, on or before that day, charge, collect or remit any amount as or on account of tax in respect of the supply under Part IX of the Act.
The proposed amendments would not apply to supplies made before March 4, 2010 where the GST/HST was not charged, collected, or remitted. For supplies made prior to March 4, 2010 where the GST/HST was not charged, collected, or remitted, there will be no GST/HST consequences. Please note that where the supply was treated as an exempt supply, the supplier will not be able to claim input tax credits in respect of inputs used or consumed in the course of making the supply.
The foregoing comments represent our general views with respect to the proposed amendments to the Excise Tax Act as they relate to the subject matter of your request. Any change to the wording of these proposed amendments or any future proposed amendments to the ETA, if enacted, could have an effect on the interpretation provided herein. These comments are not rulings and, in accordance with the guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, do not bind the Canada Revenue Agency with respect to a particular situation.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-7952. 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,
Art Blommesteijn
Municipalities and Health Care Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
Email this Content