2 February 1999 GST/HST Interpretation HQR0001186 - Haulage, Storage and Disposal of Sewage Biosolids to the

Dear XXXXX

Thank you for your letter of May 14, 1998, with attachments concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the operations of the XXXXX[.] We apologize for the delay in responding to your request.

Interpretation Requested

Although you have requested an application ruling, we are not able to comply with your request. As noted in Chapter 1.4, Goods and Services Tax Rulings of the GST/HST Memoranda Series, an application ruling provides Revenue Canada's position on specific provisions of the legislation as these relate to a clearly defined fact situation of a particular person. As the issue in question does not relate to a specific provision of the Excise Tax Act, we will provide an interpretation.

You have stated that the XXXXX XXXXX constructed a sewage plant on XXXXX XXXXX[.] The XXXXX XXXXX supplies the services of receiving and of treating waste materials to certain parties located on reserve.

XXXXX has entered into an agreement with the XXXXX to provide certain services. Specifically, the services consist of the removal of treated sewage waste biosolids from the sewage plant and disposal off the reserve in accordance with the applicable laws and regulations relating thereto.

You are concerned about the application of tax to the services provided by XXXXX to the XXXXX and the applicable documentation required.

Interpretation Given

Technical Information Bulletin B039R GST Administrative Policy: Application of GST to Indians (TIB039R) summarizes the policy concerning the treatment of Indian purchases under the GST and the HST. The treatment of Indian purchases under the GST/HST is consistent with the Indian Act under which personal property of an Indian or an Indian band situated on a reserve and their interests in reserve lands are not subject to tax.

As provided in TIB039R, an Indian band, in this case the XXXXX may acquire services, on or off reserve, for band management activities without the payment of tax. The Indian band must provide a certificate to be retained by the vendor that the services are being acquired for band management activities.

"Band management activities" are activities or programs undertaken by a band or band-empowered entity that are not commercial activities for which it would otherwise be entitled to an input tax credit. In determining whether the acquisition of a supply is for band management, the output of the activity or program will be the determining factor, as opposed to the objectives of the activity or program. Generally, a program that consists of receiving and treating waste materials for various parties on reserve would be considered band management activities.

Therefore, by providing the required certificate, the XXXXX would be eligible to acquire the services from XXXXX without payment of tax, to the extent that the activity of the band is not a commercial activity.

The foregoing comments represent our general views with respect to the subject matter of your letter. Proposed amendments to the Excise Tax Act, if enacted, could have an effect on the interpretation provided herein. These comments are not rulings and, in accordance with the guidelines set out in section 1.4 of Chapter 1 of the GST/HST Memoranda Series, do not bind the Department with respect to a particular situation.

Should you have further questions or require clarification on the above matter, please contact me at (613) 954-7954.

Yours truly,

Suzanne Leclaire
Educational Services and Indians Unit
Public Sector Bodies and Governments Division
GST/HST Rulings and Interpretations Directorate