7 May 2003 GST/HST Ruling 44292 - Aesthetic Laser Systems

Dear XXXXX:

I am writing in response to your letter XXXXX (with attachments), concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to XXXXX Aesthetic Laser Systems.

Statement of Facts

Our understanding of the facts, the transactions, and the purpose of the transactions is as follows:

1) XXXXX develops, manufactures and markets the XXXXX aesthetic lasers for dermatologists, plastic surgeons and other practitioners.

2) XXXXX Aesthetic Laser Systems consist ofXXXXX lasers that have been designed for use by these practitioners in the treatment of wrinkles, the improvement of skin tone including the reduction of pore size and facial redness, improvements in the textural smoothness of skin, the removal of unwanted hair and the treatment of unwanted leg and facial veins.

Ruling Requested

Whether XXXXX Aesthetic Laser Systems qualify for tax exemption under Medical and Assistive Devices.

Ruling Given

Based on the facts set out above, we rule that XXXXX Aesthetic Laser Systems supplied in Canada or imported into Canada are subject to the 7% GST and to the 15% HST in the participating provinces of Nova Scotia, New Brunswick, Newfoundland and Labrador.

Explanation

Medical and assistive devices that are described in Part II of Schedule VI to the Excise Tax Act (i.e., the "ETA") are zero-rated supplies, meaning they are taxable at a rate of 0%. XXXXX Aesthetic Laser Systems do not fall under any of the zero-rating provisions in this Part. These products also do not fall under any of the exemptions from tax set out in Schedule V to the ETA. Accordingly, they are subject to the 7% GST and 15% HST when supplied in Canada.

Certain medical or assistive devices can be imported into Canada tax-free pursuant to section 6 of Schedule VII if they are zero-rated under Part II of Schedule VI. As XXXXX Aesthetic Laser Systems do not fall under any of the zero-rating provisions in Part II of Schedule VI, they will be subject to the GST/HST upon importation into Canada.

This ruling is subject to the general limitations and qualifications outlined in section 1.4 of Chapter 1 of the GST/HST Memoranda Series. We are bound by this ruling provided that none of the above issues is currently under audit, objection, or appeal; that there are no relevant changes in the future to the ETA, or to our interpretative policy; and that you have fully described all necessary facts and transactions for which you requested a ruling.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-9590.

Yours truly,

Elaine Bonnah
Municipalities and Health Care Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate