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, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
Case Number: 131006
Business Number: [...]
March 8, 2011
Dear [Client]:
Subject:
GST/HST INTERPRETATION
Documentation Requirements for relief of GST/HST on supplies made to Indians
Thank you for your email of December 14, 2010, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) on supplies made on a reserve to an Indian whose Certificate of Indian Status Card (Status Card) has expired.
HST applies at the rate of 15% in Nova Scotia, 13% in Ontario, New Brunswick, and Newfoundland and Labrador, and 12% in British Columbia. GST applies at the rate of 5% in the remaining provinces and territories.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
We understand that [...] [(the Company)] provides supplies on a reserve relieved of the GST/HST to individuals claiming to be Indians under the Indian Act. However, certain Status Cards issued by Indian and Northern Affairs Canada have expiry dates. It is not uncommon for [the Company's] Indian customers to not get their cards renewed.
It is [the Company's] current practice to require that the date on the Status Card be valid, and [the Company] charges the GST/HST to First Nations customers whose cards have expired. As well, where [the Company] enters into a long term contract to provide telecommunication services on a reserve, and receives a Status Card with a valid date at the start of the contract,
[the Company] does not charge the GST/HST. However, when the card subsequently expires, [the Company] contacts the customer and requests a copy of a new Status Card with a valid date. If a new Status Card with a valid date is not received, [the Company] commences charging the GST/HST.
First Nations customers are complaining about this practice as they believe that once they have been issued a Status Card, they are still Indians under the Indian Act regardless of the fact that the card has expired. They believe they are entitled to relief of the tax.
You have provided a letter to us that was issued by [Province X] indicating that it will accept Status Cards that have expired as documentary proof that the supply is being made to an Indian for purposes of relieving the provincial part of the HST on qualifying goods and services made to the person.
You are requesting the Canada Revenue Agency (CRA) to provide a letter containing our position with respect to providing relief of the GST/HST on supplies of telecommunication services made on a reserve to an Indian when the Indian's Status Card has expired. Specifically, will the CRA consider an expired Status Card to be sufficient documentation for verification that the supply was made to an Indian?
Interpretation Given
Section 87 of the Indian Act provides tax relief for "personal property of an Indian or band situated on a reserve". The administrative policy of the CRA concerning the application of GST/HST to Indians, bands and band-empowered entities is explained in GST/HST Technical Information Bulletin B-039, GST/HST Administrative Policy - Application of the GST/HST to Indians (B-039). The guidelines in B-039 are fully consistent with the relieving provisions in section 87 of the Indian Act affecting the personal property of an Indian situated on a reserve. In addition, the guidelines reflect governmental tax policy by extending relief to other supplies, such as services, acquired by Indians where the conditions of B-039 have been met.
An Indian, as defined in the Indian Act, is a person who pursuant to the Indian Act is registered as an Indian or is entitled to be registered as an Indian. Tax relief is not available to individuals who do not qualify as Indians under the Indian Act.
The CRA has taken the position that a supply of a telephone service acquired by an Indian individual will be relieved of tax if the hook-up is on a reserve. In the case of a cellular phone, the service contract usually provides for monthly payments and is a supply of a telecommunication service under the ETA. Tax will be relieved when this service is acquired by an Indian and billed to an address on a reserve. The location of the cellular service is normally considered to be on a reserve when the account is billed to an address on a reserve.
Vendors must maintain adequate evidence that the supply for which no GST/HST was payable was made to an Indian. In this case, they will require the appropriate information from the Status Card as described in B-039 to satisfy the documentary requirement that the purchaser is an Indian as registered under the Indian Act. The CRA will accept as adequate evidence a notation on the invoice, or other sales document which is retained by the vendor, of the nine or ten digit registry number or the band name and family number (commonly referred to as the band number/treaty number).
Once an individual is recognized as an Indian by Indian and Northern Affairs Canada, the individual's legal status is not altered because the Status Card has not been renewed. Therefore, the CRA will accept an authentic Status Card even if expired as supporting documentation that the purchaser is an Indian. However, the CRA will review this position after Indian and Northern Affairs Canada makes the new Secure Certificate of Indian Status Cards available to all Indians.
The foregoing comments represent our general views with respect to the subject matter of your request. These comments are not rulings and, in accordance with the guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, do not bind the Canada Revenue Agency with respect to a particular situation. Future changes to the ETA, regulations, or our interpretative policy could affect this interpretation.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-7957. 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,
Dave Caron, Manager
Aboriginal Affairs Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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