11860-2
C.N.: 1423
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Subject:
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Supply of Communication Devices for the Hearing Impaired.
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I refer to your letter dated August 29, 1995 and the telephone conversations you had with Bob Boudreau concerning the Goods and Services Tax (GST) status of various types of communication devices pursuant to the Medical Devices (GST) Regulations.
Pursuant to section 31 of Part II of Schedule VI to the (ETA), the Regulations provide a zero-rated GST status for the supply of the goods listed thereunder. Paragraph 2(d)(iv) of the Regulations provide a zero-rated GST status for "property that is specially designed to assist an individual in coping with or treating a chronic abnormal physical state of the individual, as follows,
... (iv) communication devices for use by an individual with a hearing, speech or vision impairment, other than a device for use with a telegraph or telephone apparatus."
Section 32 of Part II of Schedule VI to the ETA provides a zero-rated GST status for the following:
"A supply of a part, accessory or attachment that is specially designed for a property described in this Part."
Where a communication device meets the criteria under the paragraph 2(d)(iv) above, the supply of the device will be zero-rated for GST purposes throughout the production and distribution chain as well as when imported.
We have reviewed the information you forwarded to this office and have provided our opinions on the goods promoted on loose leaf brochures. The goods listed in the XXXXX were examined. The principles expressed in this letter will help you provide your own rulings or interpretations on the remaining goods:
ALDS PORTA-IR Communication System
ALDS PORTA-IR Lavaliere One-to-One Infrared Transmitter
ALDS PORTA-IR Compact Portable Infrared Transmitter
ALDS PortaCap P200 Computer Assisted Notetaking System
ALDS Train-on-Phone T-switch and TTY Trainer
ALDS IR Receiver RIR 100/95 and RIR 100/250
ALDS PORTA-IR Panel
These goods are all used to aid persons with hearing disorders. However, the devices do not stand alone as a communication devices without a type of headphone to receive the signals. Therefore these goods are not considered to be communications devices for hearing impaired person under the Regulations. However, they do qualify as specially designed parts for zero-rated medical devices under section 32 of Part II of Schedule VI to the ETA.
ALDS Magnatel Magnetic Field Tester
The manufacturer's literature on this device indicates that it is designed to test electronic systems to determine whether it is suitable for audio enhancing infrared devices such as the ALDS equipment above. It is not a communication device under the Regulations nor is it a part for the purposes of section 32. The supply of this device is taxable at 7%.
AUDEX ICON-TR60
AUDEX SA-PS1-U2 "The Rattler"
AUDEX Convertible Emitter EX-PS3-C
AUDEX Speaker Level Theatre Emitter EX-PS3-T6
AUDEX Expandable Infrared Base Unit EX-B-3
AUDEX Infrared Expansion Unit EX-BEX-6
AUDEX Expandable Emitter EX-PS3
AUDEX Point Source Repeater EX-PS1
AUDEX Expandable Emitter EX-PS9
AUDEX Portable Conference Infrared Emitter ICON-TR60
AUDEX Universal Meeting Room Emitter SA-PS1-U2
AUDEX Wireless Infrared TV Listener
AUDEX Induction Counter Loop System
The brochures on these goods state that they are used to aid hearing for hearing impaired persons in various settings including theatres, meetings and at home. It is not clear whether the headphones required for listening are supplied with the products. If the products are supplied without the headphones, the goods are not supplied in a fully operable condition. Under these conditions, it is our opinion that the supply of the goods is zero-rated under section 32 of Part II of Schedule VI to the ETA. Where the products are supplied with headphones the supply is considered to be a complete communication device which is zero-rated pursuant to the section 31 and the Regulations.
AUDEX SounDirector
The SounDirector is a personal communication devices to be worn by the individual which amplifies the sounds and reduces background noise. It is supplied complete with headphones. It is our opinion that the supply of the AUDEX SounDirector is zero-rated pursuant to section 31 and the Regulations.
This should help you to provide your written response. If you require additional information, do not hesitate to contact Ken Syer at (613) 952-9590.
Enikö Vermes
Manager
Health Care, Goods & Services
Special Sectors
GST Rulings and Interpretations
c.c.: K. Syer
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