19 December 2006 GST/HST Interpretation 63389 - Supplies Made by XXXXX

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.

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 a XXXXX stent-graft by XXXXX. We apologize for the delay in this response.

All legislative references are to the Excise Tax Act (ETA) and the regulations therein, unless otherwise specified.

The following statement of facts is based on our understanding of the information you provided, that is found on the website of XXXXX and on the Internet respecting the XXXXX stent-graft.

Statement of Facts

We understand that:

1. XXXXX is a medical device manufacturer and is registered for GST/HST purposes.

2. XXXXX supplies the XXXXX stent-graft to hospitals in Canada. The XXXXX stent-graft, in your view, is comparable to a prosthesis that is used in hip or knee replacement surgery.

3. The XXXXX stent-graft is implanted in the aorta ^[i]footnote 1 of a person to support the diseased or injured walls of the damaged vessel.

4. The surgeon inserts a catheter loaded with a self-expanding, fabric-covered stent-graft through a surgical opening in the femoral artery. The catheter is guided through the person's blood vessels under fluoroscopy until the device is positioned across the diseased or injured section of the aorta. The stent-graft expands upon deployment from the catheter to form a continuous tube through the aorta that carries the blood and reduces pressure on the damaged vessel, restoring normal blood flow.

5. The XXXXX stent-graft is implanted in a person by a surgeon with the intent that it remains in the person's body permanently.

6. The most common location of arterial aneurysm formation is the abdominal aorta, specifically the segment of the abdominal aorta below the kidneys. An abdominal aneurysm located below the kidneys is called an infrarenal aneurysm. Among other things, an abdominal aortic aneurysm repair may be performed to prevent the risk of rupture, to relieve symptoms, or to restore good blood flow. This procedure may also be performed where an emergency life-threatening haemorrhage exists, when the size of the aneurysm is greater than 5 centimetres in diameter, or when the growth rate of the aneurysm is more than 0.5 centimetres over one year. The XXXXX stent-graft has been implanted in people to treat infrarenal aortic aneurysms.

Ruling Requested

You would like to know whether the supply of the XXXXX stent-graft is a zero-rated supply for purposes of the Excise Tax Act and therefore not subject to the GST/HST.

Ruling Given

Based on the facts set out above, we rule that the supply of the XXXXX stent-graft is a zero-rated supply under section 25 of Part II of Schedule VI to the ETA and therefore no GST/HST applies in respect of its supply.

This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Goods and Services Tax Rulings. We are bound by this ruling provided that none of the above issues is 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.

If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-7952.

Yours truly,

Lynn Fournier Renner
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate

2006/11/28 — RITS 79933 — Supplies of Stents