9 May 2007 GST/HST Interpretation 91570 - Application of GST/HST to a XXXXX Levy

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 implantable medical or surgical prostheses.

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

Attached to your correspondence was a copy of your letter XXXXX to

Ms. Danielle Laflèche, Director, Public Service Bodies and Governments Division outlining your concerns and those of XXXXX with respect to the interpretation of section 25 of Part II of Schedule VI by the Canada Revenue Agency (CRA). We understand that XXXXX of your office and representatives from XXXXX met with Ms. Laflèche XXXXX to discuss this matter.

According to your current letter, you received verbal confirmation XXXXX indicating that the CRA had determined that implantable prostheses qualified for zero-rated status under section 25 of Part II of Schedule VI. You advised that interpretations had been provided confirming that stents and breast implants are zero-rated supplies under this provision.

You are not aware of any written CRA directives indicating that stents and breast implants qualify for zero-rated tax status under section 25 of Part II of Schedule VI.

Interpretation Requested

You would like confirmation that implantable medical or surgical prostheses qualify as zero-rated supplies under section 25 of Part II of Schedule VI.

Interpretation Given

Section 25 of Part II of Schedule VI zero-rates "A supply of a medical or surgical prosthesis, or an ileostomy colostomy or urinary appliance or similar article that is designed to be worn by an individual."

The CRA has revised, on a retroactive basis, its interpretation of "medical or surgical prosthesis" worn by an individual to encompass an artificial device that replaces a missing body part, corrects a physical deformity or malfunction, or supports a weak or deformed part of the body. Accordingly, a medical or surgical prosthesis worn by an individual externally to replace a missing body part or implanted to serve a purpose described above will be zero-rated under section 25 of Part II of Schedule VI.

The CRA has taken the position that the supply of stents (cardiovascular, esophageal, tracheobronchial, biliary, colonic, ureteral) is zero-rated under section 25 of Part II of Schedule VI.

GST/HST officials of the CRA have been notified of the above position and an article respecting this issue will be in the Spring 2007 edition of the Excise and GST/HST News, a publication that is accessible to the public through the CRA website.

The matter of whether a breast implant qualifies as a zero-rated "medical or surgical prosthesis" under section 25 of Part II of Schedule VI is under review.

The foregoing comments represent our general views with respect to the subject matter of your request. 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. Future changes to the ETA, regulations, or our interpretative policy could affect this interpretation.

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
Municipalities and Health Care Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate

2007/04/27F — RITS 91576 — Valeur de l'importation temporaire d'un aéronef loué