File No.: 11872-13
XXXXX
XXXXX July 31, 1995
Dear XXXXX
Thank you for your letter of July 11, 1995, addressed to Jamie McInnis, of my office, regarding GST rebates for Indian bands. You requested an interpretation or clarification on the following issues relating to rebates for Indians bands:
A. GST paid for off-reserve travel for band management activities
The GST administrative policy pertaining to Indians provides that Indian bands and band-empowered entities will pay the GST on off-reserve purchases of transportation, short-term accommodation, meals and entertainment. Subsequently, the band or the band-empowered entity may file a General Rebate application, reason code 8, to recover the GST paid on these purchases when they are purchased for band management activities or for real property located on reserve.
Mileage and Meal Allowances:
Reasonable allowances paid out by bands or band-empowered entities for band management activities are acceptable expenditures for purposes of this rebate, that is the allowance paid should represent the actual expenditure incurred. The allowances may be for a number of things, including mileage and meals. Gas stations or restaurants located on a band's reserve will not impact upon the band's ability to claim this rebate or the amount of the allowance eligible for rebate.
Supporting Documentation:
When filing the rebate, the applicant is required to complete the "Details of Rebate Application" for all purchases for which amounts were paid as GST. For Type 8 rebates, this list would include employees expense report forms in addition to amounts paid out directly to vendors. The Department may, in certain circumstances, accept a listing of eligible items from the applicant's general ledger. This is an audit decision based on the facts of the specific case. However, the acceptability of the general ledger will depend a great deal on the amount of detail in the ledger.
Funding to the Band versus Re-Imbursements to the band:
If a band or band empowered entity does not actually incur expenses for the travel, they are not eligible for the rebate. Hence, if travel expenses are not the applicant's expense and are directly reimbursed to the applicant, the applicant will not be entitled to a rebate for that travel. In the case of a funding arrangement, the applicant receives funding for the activity, but there is no direct reimbursement and the expenses are actually expenses of the applicant.
B. GST charged in error by vendors and paid by an Indian band
This last question asks if the Department will issue a rebate if the vendor certifies, in writing, that they have not and will not in the future reimburse the GST owing. If GST has been paid in error, a band or band empowered entity is entitled seek a refund or credit from the supplier or apply for a refund of the amount under the "Reason Code 1 - Amounts paid in error". When the vendor makes a refund they are entitled under section 232(1) of the Excise Tax Act to adjust their next GST return to reflect the refund. Therefore, if the vendor is aware that they were in error and incorrectly charged the GST, they should willingly refund or credit their customer.
The foregoing comments represent our general views with respect to the subject matter. Unannounced, proposed or future amendments to the legislation may result in changes to our interpretation. These comments are not rulings and, in accordance with the guidelines set out in GST Memorandum 100-3, do not bind the Department with respect to a particular situation.
If you have any further questions, please feel free to contact Jamie McInnis at (613) 954-7954.
Yours truly,
J.A. Venne
Director
Special Sectors
GST Rulings and Interpretations
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J. McInnis XXXXX
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