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: 143194
Business Number: […]
Dear [Client]:
Subject: GST/HST RULING
Kinesiology services
Thank you for your letter of February 29, 2012, concerning the application of the goods and services tax (GST)/harmonized sales tax (HST) to kinesiology services. We apologize for the delay in our response.
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 that:
1. The practice of kinesiology is not a regulated health care profession in British Columbia.
2. You are a member of the British Columbia Association of Kinesiologists (the Association), which is a not-for-profit membership association that promotes kinesiology as an integral part of individual health and wellness and which also represents and advocates for its members.
3. The Association has established a scope of practice to which its practicing members voluntarily adhere. Amongst other things, this scope of practice outlines permitted treatments (e.g., assessments, treatments and interventions) as well as restricted activities.
4. You perform kinesiology services (i.e., permitted treatments) in accordance with the Association’s scope of practice. […].
5. You […] provide kinesiology services to […][customers]. Some of the services include stretching and performing range of motion exercises, transferring wheelchair bound individuals to and from standing frames, assisting individuals to walk with walkers, and general strengthening programs.
6. Kinesiology services are not covered under the Medical Services Plan (MSP) of British Columbia.
7. […]
8. […][Information about GST/HST registration].
9. […].
RULING REQUESTED
You would like to know […][whether GST/HST applies to the kinesiology services].
RULING GIVEN
Based on the facts set out above, we rule that:
1) The supply of a kinesiology service […] is taxable;
2) GST/HST is payable […];
3) Supplies of kinesiology services […] are taxable. As a registrant since [mm/dd/yyyy], you are required to collect GST/HST on taxable supplies.
EXPLANATION
Generally, supplies of property and services made in Canada are subject to the GST/HST, pursuant to section 165, unless they are specifically exempt under Schedule V to the ETA.
Part II of Schedule V provides that certain health care services are exempt from GST/HST. For a supply of a property or a service to be exempt from GST/HST under Part II of Schedule V, a specific exempting provision included in that Part must apply to the particular supply and the supply must be a “qualifying health care supply” and not a “cosmetic service supply” as those terms are defined in section 1 of that Part. If not included in Part II of Schedule V, then supplies are generally subject to GST/HST under section 165 at the applicable rate, depending on the province in which a supply is made, unless another exempting provision applies.
Section 10 of Part II of Schedule V exempts a supply of a prescribed diagnostic, treatment or other health care service rendered to an individual if made on the order of
(a) a medical practitioner or practitioner;
(b) a registered nurse authorized under the laws of a province to order such a service if the order is made within a nurse-patient relationship; or
(c) a person that is entitled under the laws of a province to practise the profession of pharmacy and is authorized under the laws of the province to order such a service, if the order is made within a pharmacist-patient relationship.
The term “prescribed” applies to all the services mentioned in the preamble to that section, and as a result, section 10 of Part II of Schedule V effectively exempts a supply of a prescribed diagnostic service, a prescribed treatment service, or a prescribed other health care service rendered to an individual if made on the order of one of the individuals listed in that section.
Subsection 123(1) defines “prescribed” to mean
(a) in the case of a form or the manner of filing a form, authorized by the Minister,
(b) in the case of the information to be given on a form, specified by the Minister,
(c) in the case of the manner of making or filing an election, authorized by the Minister, and
(d) in any other case, prescribed by regulation or determined in accordance with rules prescribed by regulation.
As a result, the term “prescribed” for purposes of section 10 of Part II of Schedule V does not refer to the type of “prescription” document that one may obtain from a medical or other health professional, but rather to a service prescribed by regulation.
“Prescribed” health care services, which are exempt from GST/HST, are found in the Health Care Services (GST/HST) Regulations made under the ETA. The following services are “prescribed” services:
(a) laboratory, radiological or other diagnostic services generally available in a health care facility; and
(b) the administration of drugs, biologicals or related preparations in conjunction with the provision of services included in paragraph (a).
As kinesiology services are not listed in the Health Care Services (GST/HST) Regulations above, they are not exempt from GST/HST under section 10 of Part II of Schedule V.
As there are no other exempting provisions that can apply, your supplies of kinesiology services, […] are taxable pursuant to section 165. For […] GST/HST registrants (a GST/HST registrant is a person who is registered for the GST/HST or who is required to be registered), GST/HST applies to the value of the consideration for such supplies made in Canada.
[…]
[…].
As a GST/HST registrant, you are entitled to claim input tax credits (ITCs) for tax payable on acquisitions and importations of property or services to the extent to which the property or services are for consumption, use or supply in the course of your commercial activities. See publication RC4022, entitled General Information for GST/HST Registrants, for more information on these ITCs which you are entitled to claim.
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 306-517-0416. 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,
John Ware
Health Care Sectors Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
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