GST/HST Rulings and
Interpretations Directorate
Place Vanier, Tower C, 10th Floor
25 McArthur Avenue
Vanier, Ontario
XXXXX K1A 0L5
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Subject:
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GST/HST INTERPRETATION
The Application of GST to Postage Stamps Purchased on Reserve
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Dear XXXXX
Thank you for your facsimile of March 12, 1997 (with attachments) concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the purchase of postage stamps by Indians, Indian bands, and band empowered entities. We apologize for the unavoidable delay in responding.
Interpretation Requested
You have requested written confirmation of the application of the GST/HST to the purchase of postage stamps by the following:
1. an Indian on a reserve; and
2. an Indian band; and
3. a band empowered entity.
Interpretation Given
It is the Department's position that under the Excise Tax Act, the sale of postage stamps is considered a supply of a freight transportation service, as opposed to the sale of a good. As a freight transportation service, stamps are subject to GST unless they are otherwise relieved of tax elsewhere in the Excise Tax Act.
However, Revenue Canada has adopted administrative guidelines designed to provide relief from taxation that is guaranteed under the Indian Act. These guidelines are detailed in the Technical Interpretation Bulletin 039R issued by Revenue Canada on November 25, 1993 entitled "GST Administrative Policy: Application of GST to Indians" (hereinafter "TIB-039R"), a copy of which we have enclosed for your convenience. Please note that while theTIB-039R only makes reference to the GST, it also applies to the supply of goods and services in the participating provinces of Nova Scotia, New Brunswick and Newfoundland, to which the Harmonized Sales Tax applies at the rate of 15%.
1. Purchase of Postage Stamps by an Indian on a Reserve
The purchase of postage stamps by an individual Indian will be relieved of the GST where both the origin and the destination are on a reserve, meaning that:
• the postage stamps must be purchased on a reserve; and
• the mail to which the stamps relate must be posted on a reserve; and
• the mail to which the stamps relate must be delivered to a reserve.
2. Purchase of Postage Stamps by an Indian Band
The purchase of postage stamps on reserve by an Indian band is not subject to the GST if the services are acquired for band management activities.
Freight transportation services (stamps) acquired off-reserve by a band will be subject to the GST. However, the band will be eligible for a rebate of the GST paid if the services are acquired for band management activities.
3. Purchase of Postage Stamps by a Band Empowered Entity
The guidelines relating to the purchase of postage stamps by an Indian band, outlined above, also govern the purchase of postage stamps by a band empowered entity. Therefore, the purchase of postage stamps by a band empowered entity is not subject to GST if the stamps are acquired on reserve for band management activities.
Stamps purchased off-reserve by a band empowered entity are subject to the GST. However, the band empowered entity will be eligible for a rebate of the GST paid if the services are acquired for band management activities.
Please note that in addition to the administrative guidelines outlined above, all other conditions outlined in the TIB-039R must be met in order for a supply of freight transportation services, to an Indian, Indian band or band empowered entity, to be relieved of GST. In particular, Indians, Indian bands and band empowered entities must provide the appropriate documentation to the vendor at the time of purchase.
We trust that the above answers your question. However, should you require further clarification on the above matter, please do not hesitate to contact me at 952-4157.
Yours truly,
Kristine Allen
Public Service Bodies and Governments Unit
GST/HST Rulings and Interpretations Directorate
Encl.: TIB-039R
Legislative References: TIB-039R
NCS Subject Code(s): 11872-1
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