18 February 2005 GST/HST Ruling 57507 - Importation of the XXXXX [Medical Device]

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 (with attachments), concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the transaction(s) described below.

Statement of Facts

Our understanding of the facts, the transaction, and the purpose of the transaction is as follows:

You are part of a research team, located at XXXXX, which is studying a very rare genetic disease i.e., XXXXX. This disease appears to affect XXXXX. XXXXX. Your research team has located a person in Canada who is willing to participate in your study.

Participants of your study are required to wear a device called the XXXXX to monitor and collect data associated with their XXXXX. The study typically takes place in the participant's home over a XXXXX period. You are planning to send the XXXXX to the Canadian participant's home.

XXXXX. Instructions for using the XXXXX are shipped to the participant's home along with the device. A research coordinator is available through e-mail or phone for any questions related to the XXXXX. You do not charge the participant any amount to participate in your study. Once the study is completed, the XXXXX is sent back to your location in XXXXX. Your organization pays for all the shipping charges to and from the participant's home.

XXXXX. The XXXXX is not for resale.

Transaction(s)

Importation of the XXXXX.

Ruling Requested

Whether the importation of the XXXXX for medical research in Canada is a taxable importation that is subject to GST.

Ruling Given

Based on the facts set out above, we rule that the importation of the XXXXX medical device is a taxable importation.

This ruling is subject to the general limitations and qualifications outlined in section 1.4 of Chapter 1 of the GST/HST Memoranda Series. We are bound by this ruling provided that none of the above issues is currently under audit, objection, or appeal; that there are no relevant changes in the future to the Excise Tax Act, or to our interpretative policy; and that you have fully described all necessary facts and transaction(s) for which you requested a ruling.

Explanation

Generally, all goods imported into Canada are taxable unless specifically relieved under section 213 of the Excise Tax Act (ETA). Importations of goods relieved of tax under section 213 of the ETA are set out in Schedule VII to the ETA.

Section 6 of Schedule VII to the ETA allows, in part, specific medical and assistive devices the supply of which is zero-rated under Part II of Schedule VI to the ETA to be treated as non-taxable importations. Therefore, where the supply of a device is zero-rated as a medical device under Part II of Schedule VI to the ETA, the importation of the device is also considered a non-taxable importation pursuant to Section 6 of Schedule VII to the ETA. Enclosed is a copy of section 4.2 of Chapter 4 of the GST/HST Memoranda Series, Medical and Assistive Devices, which provides detailed information on zero-rated medical and assistive devices for purposes of the GST/HST.

There is no provision in Part II of Schedule VI to the ETA that would zero-rate the supply of the XXXXX as a medical device. As a result, its importation is taxable. There is no other GST/HST provision that could provide for the non-taxable importation of the XXXXX.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-4294.

Yours truly,

Donato Licursi
Border Issues Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate

2005/01/10 — RITS 49116 — GST/HST Treatment of Site Leases