19 February 2003 GST/HST Interpretation 43273 - Visitor Rebate - Breast Implant Material

This memorandum is in response to your e-mail XXXXX. You requested an interpretation as to whether or not breast implant material would be eligible for a rebate under subsection 252(1) of the Excise Tax Act (ETA).

Subject to the restrictions of section 252.2 of the ETA, subsection 252(1) provides for a rebate of the GST/HST paid by a non-resident person on eligible tangible personal property (TPP) purchased by the non-resident for use primarily outside Canada and exported by the non-resident within 60 days of delivery to the non-resident.

The CCRA's general position is that the breast implant material is an input into the supply of a surgical procedure that may involve breast augmentation for cosmetic reasons, or breast reconstruction for medical reasons. In the latter situation, there is usually more than one surgical procedure being performed and the implant is considered an input into the overall reconstruction. A reconstruction is generally performed in a hospital making it an exempt supply and therefore not eligible for a rebate.

A breast augmentation procedure is considered a supply of a service. The supply is generally considered a single taxable supply, for the purposes of the ETA, and subject to GST/HST. The breast implant material is considered an input into the taxable service. However, there could be an instance where the supply of the implant material is not part of a single supply, where for instance, a corporation supplied the implant material to the client which was then used by a medical practitioner to perform the taxable service (i.e. surgical procedure) of a breast augmentation. It is our view that in such a situation, two separate supplies are being made, and billed, by two separate suppliers. However, when the implant material is used in performing the augmentation procedure in Canada, it would be considered an input into that taxable service. It would lose its "characterization" as a separate supply of TPP. The individual in this case would not be eligible for a rebate.

It is conceivable that the implant material could be supplied in Canada and exported to be used in a procedure outside Canada. In that case, the question of whether TPP has been exported would be analyzed based on the particular facts of the case.

Generally, in no instance would the supply of the breast implant material be eligible for a visitor rebate. TPP is not supplied but rather a single supply of a service (augmentation) and the implant material is consumed as an input into that service, when performed in Canada.

Similarly, the use of botox in a cosmetic procedure would be considered an input into that procedure. The botox "injected" into the patient is consumed in the procedure and cannot be considered a separate supply.

Please do not hesitate to contact me at (613) 952-8814 should anything further be required.

Robert Douthwright
Rulings Officer, Services and Intangibles Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate