RITS0777
File: 11860-3
August 11, 1997
Dear XXXXX
This is in response to your ruling request of April 28, 1997 (received by this office on July 15, 1997) in which you requested a ruling on the Goods and Services Tax (GST) status of a product named XXXXX soon to be introduced in Canada by your firm.
Statement of Facts
1. XXXXX is a diagnostic test product for stomach damage such as ulcers. It is similar to a urine-glucose challenge kit in that it is based on the consumption of a beverage and the subsequent examination of the patient's urine. In the case of XXXXX the beverage contains sucrose. The presence in the urine of the sucrose is an indication of gastric damage. As per our telephone conversation of August 7, 1997, XXXXX is not a drug; it has no Drug Identification Number or GP number.
2. The most common method of purchase however will be as follows: The doctor signs a laboratory requisition which the patient takes to a pharmacist. The pharmacist sells the product to the patient who takes it home and follows the instructions which include consumption of the beverage after supper and the collection of all overnight and morning urine. The sample is to be then taken to a medical laboratory for analysis.
3. The product may be purchased by a patient without a written prescription or a laboratory requisition from a medical practitioner. However, without the laboratory requisition the patient will be unable to get the tests performed by the lab.
Questions
You would like a ruling on the GST status of the supply of XXXXX by the pharmacist to the patient/consumer.
Answer
The Excise Tax Act provides a zero-rated status for the supply of certain drugs included under Part I of Schedule VI and for the supply of medical devices included under Part II of the same Schedule. Regrettably these provisions provide no GST relief for the supply of XXXXX The supply of XXXXX is subject to the GST at 7%. Where the Harmonized Sales Tax (HST) applies (in Nova Scotia, New Brunswick and Newfoundland), the supply of XXXXX is subject to the HST at 15%. These rates of tax will apply at all levels of the distribution chain including the supply to the consumer by the pharmacist.
This ruling is given subject to the general limitations and qualifications outlined in the GST Memoranda series 1.4. We are bound be this ruling provided that none of the above issues are presently under audit, objection or appeal, there are no relevant changes in the future to the Excise Tax Act and provided that you have described all necessary facts and transactions for which you have requested a ruling.
If you would like to discuss this matter further, please contact me at (613) 952-9590.
Ken Syer
Senior Rulings Officer
GST/HST Rulings and Interpretations
Policy and Legislation Branch
c.c.: K. Syer
M. Sylvest
E. Vermes
L. Dixon
XXXXX , Department of Finance
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