File: 11865-2 XXXXX
May 29, 1995
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XXXXX
District I & S Chief
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Revenue Canada XXXXX
I am writing with reference to the case of XXXXX which was discussed during the workshop held at the XXXXX office on December 14, 1994.
You requested our comments with respect to the application of the GST to the invitro fertilization (IVF) services provided by XXXXX to its clients.
In our opinion the main issue to be addressed is whether XXXXX meets the definition of a "health care facility" pursuant to paragraph 1(a) of Schedule V to the Excise Tax Act (ETA), and if so, whether they provide "institutional health care services".
Our understanding of the facts provided by you are as follows:
1. XXXXX provides IVF services to its clients.
2. XXXXX is owned and operated by a group of physicians.
3. The supply of IVF services is made by one supplier to one recipient for an all inclusive price for which a single consideration is paid.
4. As of April 1, 1994, XXXXX coverage is only extended to those patients that meet the following criteria:
a) Patients have had one cycle of IVF prior to April 1, 1994 deadline. A maximum of three cycles of treatment in a life time is permitted.
b) Patients must have complete bilateral fallopian tube blockage.
Exempting Provisions
The applicable exempting provision for the supply of institutional health care service within a health care facility is section 2 of Part II of Schedule V to the Excise Tax Act (ETA), which reads as follows:
"A supply of an institutional health care service made by the operator of a health care facility to a patient or resident of the facility, but not including a service related to the provision of a surgical or dental service that is performed for cosmetic purposes and not for medical or reconstructive purposes".
Analysis
XXXXX does not meet the exempting provisions of paragraphs (b) or (c) of the definition of "health care facility" under section 1 of Part II of Schedule V to the ETA.
For purposes of paragraph 1(a) of the same provision, the Department has maintained the position that "medical care" refers to those services provided by or ordered by a physician, with the care provided by other health care professions (such as nursing care, rehabilitation, and the like) excluded from the definition.
In order to meet the provisions of the definition of "health care facility" under paragraph 1(a) of Part II of Schedule V to the ETA, XXXXX must be operated for the purpose of providing medical or hospital care, including acute, chronic or rehabilitative care. The inclusion of the terms "acute", "chronic" and "rehabilitative care" are included as examples of medical or hospital care. They do not stand alone. XXXXX will meet the definition of "health care facility" only if they provide medical care as described above. Conversely, if XXXXX does not provide such medical care, they do not meet the definition of a "health care facility" and consequently will not be considered to provide "institutional health care service" pursuant to section 2 of Part II of Schedule V to the ETA.
Based on the information provided and the commonly accepted definition of "medical care", XXXXX provides "medical care" and therefore meets the definition of a "health care facility" and provides "institutional health care service". Accordingly, the supply of IVF by XXXXX to its patients is an exempt supply pursuant to section 2 of Part II of Schedule V to the ETA.
It should be noted that the supply of physician services rendered to an individual and laboratory services which are not part of the overall fee for IVF and are covered under XXXXX are exempt of the GST pursuant to section 9 of Part II of Schedule V to the ETA.
In conclusion, the supply of IVF made by XXXXX to patients constitutes an exempt supply pursuant to section 2 of Part II of Schedule V to the ETA.
If you have any further questions regarding this case, please contact either Ms Enikö Vermes A/Manager, Goods & Health Care at (613) 954-5127 or Mr. Lance Dixon at (613) 952-9264.
Yours truly,
J.A. Venne
Director
Special Sectors
GST Rulings and Interpretations
| c.c.: |
Lance Dixon
Adrien Venne
Enikö Vermes |
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