23 November 2001 GST/HST Interpretation 37983 - Tax Status of an Imported Drug Used During the Course of Providing Anti-HIV Treatments

This is in reference to your fax transmission sheet of October 24, 2001, in which you request confirmation as to whether the importation of a particular drug can be relieved from the Division III tax, under the Excise Tax Act (the ETA).

The facts as I understand them are as follows:

-    XXXXX. (XXXXX) imported a particular drug that is used during the course of providing anti-HIV treatments.

-    The drug in question is identified as XXXXX which is also marketed as "XXXXX".

-    XXXXX imported the drug under GST exemption code 56, which provides for non-taxable importation of drugs and biologicals described in Part I of Schedule VI to the ETA.

Part I of Schedule VI to the ETA provides for the zero-rating of prescription drugs and biologicals. More particularly, paragraph 2(b) of Part I of Schedule VI provides that a drug included in Schedule F to the Food and Drug Regulations (the FDR) is zero-rated, other than a drug or mixture of drugs that may, pursuant to the Food and Drugs Act or the FDR, be sold to a consumer without a prescription. According to Schedule F to the FDRXXXXX is listed as a prescribed drug and is therefore zero-rated by virtue of Paragraph 2(b) of Part I of Schedule VI to the ETA. Thus, section 6 of Schedule VII to the ETA would apply to relieve the importation of XXXXX from the Division III tax, under GST exemption code 56.

Should you require more information, please contact me at (613) 957-8220 or by e-mail at daniel.chamaillard@ccra-adrc.gc.ca.

Daniel E.B. Chamaillard
Senior Rulings Officer