Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 11th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 241474
Dear […][Client]:
Subject: GST/HST RULING
Tax Status of Dental Loupes with Prescription
Thank you for your letter of [mm/dd/yyyy], concerning the application of the goods and services tax/harmonized sales tax (GST/HST) to supplies of dental loupes with built-in prescription lenses.
The HST applies in the participating provinces at the following rates: 13% in Ontario; and 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island. The GST applies in the rest of Canada at the rate of 5%.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
STATEMENT OF FACTS
We understand the following:
1. […].
2. A dental loupe is a small magnification device, usually set in an eyepiece or head frame, used by dentist and doctors for examination or operation when fine detail is involved.
3. The dental loupes are worn for 10-12 hours per day to permit doctors and dentists to perform diagnostics and surgery effectively.
4. The dental loupes often have a prescription built into them as required by the individual doctor or dentist.
5. […].
RULING REQUESTED
You […][ask if] dental loupes with prescription lenses built in […] [are] considered as prescription eyewear for purpose of the GST/HST, and therefore be zero-rated.
RULING GIVEN
Based on the facts set out above, we […] confirm that dental loupes with prescription lenses built in are not zero-rated. Rather, supplies of dental loupes are subject to the GST/HST at the applicable rate based on the place of supply.
EXPLANATION
Generally all supplies of goods and services made in Canada are subject to the GST/HST unless specifically relieved under the ETA. There are exceptions for medical devices that are specifically identified in Part II of Schedule VI as being zero-rated; e.g., the tax applies at the rate of 0%. Some devices are zero-rated in their own right (e.g. supplies of artificial eyes, artificial teeth, hearing aids) while other devices are zero-rated only when supplied under certain conditions (e.g. on the written order of a medical practitioner for use by a consumer named in the order). If a medical device is not included in Part II of Schedule VI, then the supply of the medical device would be subject to tax at the applicable rate depending on the province in which the supply is made, unless another provision in the ETA applies to zero-rate or exempt the supply.
Section 9 of Part II of Schedule VI zero-rates “a supply of eyeglasses or contact lenses if the eyeglasses or contact lenses are, or are to be, supplied under the authority of a prescription prepared, or an assessment record produced, by a person for the treatment or correction of a defect of vision of a consumer named in the prescription or assessment record and the person is entitled under the laws of the province in which the person practises to prescribe eyeglasses or contact lenses, or to produce an assessment record to be used for the dispensing of eyeglasses or contact lenses, for the treatment or correction of the defect of vision of the consumer”.
A consumer is defined in subsection 123(1) as a particular individual who acquires or imports property or service for the particular individual’s personal consumption, use or enjoyment or the personal consumption, use or enjoyment of any other individual at the particular individual’s expense, but does not include an individual who acquires or imports the property or service for consumption, use or supply in the course of the commercial activities of the individual or other activities in the course of which the individual makes exempt supplies. In other words, a consumer is a person who will use a particular good or service for their (or another person’s) personal purposes rather than in the course of their business.
You have indicated that the dentist or doctor would acquire the dental loupe with prescription built in to use in their practice for effective diagnostics and surgery. As such, they are using the loupes in the course of their commercial activities or for making exempt supplies, and not for their own personal consumption, use or enjoyment, or the personal consumption, use or enjoyment of another individual. Therefore, the dental loupes would not be considered to be supplied for the treatment or correction of a defect of vision of a consumer, and would not be zero-rated pursuant to section 9 of Part II of Schedule VI.
As no other zero-rating or exempting provision applies, supplies of the dental loupes would be taxable at the applicable rate depending on the province in which the supply is made.
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the Canada Revenue Agency (CRA) is bound by the ruling(s) given in this letter provided that: none of the issues discussed in the ruling(s) are currently under audit, objection, or appeal; no future changes to the ETA, regulations or the CRA’s interpretative policy affect its validity; and all relevant facts and transactions have been fully and accurately disclosed.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 343-573-6088. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Yours truly,
Kate Portner Gartke
Health Care Sectors Unit
Legislative Policy and Regulatory Affairs Branch
GST/HST Rulings Directorate
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