28 November 2006 GST/HST Ruling 79933 - XXXXX stent-graft

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:

This is in reply to your letters XXXXX, with attachments, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to supplies of stents made by your client, XXXXX.

XXXXX.

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

Statement of Facts

On the basis of your letter, our understanding of the facts is as follows:

1. XXXXX.

2. XXXXX makes supplies of various types of stents to XXXXX Canadian hospitals. Its customer base is made up exclusively (100%) of hospitals.

3. Stents are materials implanted in various parts of the body to support some form of tissue against collapse. They are flexible, expandable metal tubes that are designed to be inserted (i.e., implanted) into a diseased lumen (the inner cavity or channel) within a tubular organ, e.g., larynx, trachea, artery, esophagus, biliary duct, colon, ureteral duct, etc., for the purpose of restoring the natural function of that particular lumen.

4. You identified the following stents as the subject of the ruling request:

•   Cardiovascular stents, also referred to as coronary artery stents, which are implanted in a patient's artery that has been narrowed or occluded by disease to restore natural blood-flow in the artery and to reduce the patient's risk of cardiac arrest or stroke.

•   Esophageal stents, which are implanted in a patient's esophagus to treat an obstruction in the esophagus, such as advanced stage cancerous tumours that block the esophagus and impair the patient's ability to swallow foods and liquids.

•   Tracheobronchial stents, which are implanted in a patient's trachea to treat an obstruction caused by either malignant or non-malignant growths that restrict airflow to and from the patient's lungs.

•   Biliary stents, which are implanted in a patient's biliary ducts to treat biliary strictures, such as malignant growths that impede the flow of bile from the liver to the duodenum.

•   Colonic stents, which are implanted in a patient's colon to treat colonic blockages caused by malignant growths that impede the natural functions of a patient's digestive tract.

•   Ureteral stents, which are implanted in a patient's ureteral duct to treat blockages and restore the natural drainage of urine from the patient's kidney to the bladder.

5. You advised that the surgical procedure and purpose for implanting all of the stents is fundamentally the same. Specifically, all stents are delivered though the particular lumen that has become narrowed or occluded by way of a guide wire and are positioned by expanding the stents to the affected site. The stent becomes a permanent part of the patient's body.

Ruling Requested

You are requesting that the supplies of stents made by XXXXX identified in

Fact #4 fall within section 25 of Part II of Schedule VI and thus are zero-rated supplies; i.e.:

•   Cardiovascular stents;

•   Esophageal stents;

•   Tracheobronchial stents;

•   Biliary stents;

•   Colonic stents; and

•   Ureteral stents.

Ruling Given

The supplies of stents made by XXXXX identified in Fact #4 fall within section 25 of Part II of Schedule VI. That is, we consider the stents in question to be zero-rated supplies of "medical or surgical prosthesis".

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 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) 952-6761.

Yours truly,

Susan Eastman
Municipalities and Healthcare Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate

2006/12/06 — RITS 82659 — Supplies of an Admission Made by the City XXXXX