27 June 2000 GST/HST Interpretation 31327 - Delivery Service

Dear XXXXX

Thank you for your letter of March, 2000 concerning the application of the Goods and Services Tax (GST) to a delivery service that you are proposing to operate. Your letter was referred to us by XXXXX[.] In a letter dated April 4, 2000, XXXXX responded to some questions and concerns you had regarding the audit of XXXXX. He referred your proposals to:

XXXXX

c) to begin a delivery service on behalf of vendors.

Your letter impacts on a number of areas of responsibility of the federal government. The Excise and GST/HST Rulings Directorate of the Policy and Legislation Branch of the Canada Customs and Revenue Agency is responsible for the interpretation and application of the Excise Tax Act, Regulations, departmental policies and administrative procedures. We can thus respond to your inquiry on delivery services as it relates to our administrative policy on the application of the GST to Indians. This administrative policy is based on legislation contained in the Indian Act that is administered by the Department of Indian Affairs and Northern Development (DIAND). The Department of Finance is responsible for tax policy. XXXXX[.] According to your letter, "... the XXXXX is proposing to initiate a delivery service on behalf of vendors to further clarify the exemption from the GST." I understand that your service would enter into contracts with off reserve vendors in XXXXX to deliver to a reserve property that was purchased by Indians from these off-reserve vendors.

Interpretation Requested

Would the described delivery service meet the delivery requirements stated in "TIB-B[-]039R GST Administrative Policy - Application of GST to Indians" for off[-]reserve purchases?

Interpretation Given

Based on the information provided, your proposed delivery service would meet the requirements of TIB-B[-]039R provided that the service operates as an agent of the vendor.

Explanation

As stated in the enclosed copy of TIB-B[-]039R, the treatment of Indian purchases under the GST 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 reserves or designated lands are not subject to tax.

Indians, Indian bands and unincorporated band-empowered entities, as well as incorporated band-empowered entities purchasing for band management activities, may acquire property off-reserve without paying the GST, provided they have the appropriate documentation to show the vendor; and the property is delivered to a reserve by the vendor or the vendor's agent.

There is generally nothing to prevent a vendor from appointing anyone as their agent for the purposes of effecting delivery. This includes a delivery service that is owned by an Indian band. Please refer to pages 7 and 8 of the enclosed TIB-B[-]039R for more information in this regard.

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 Canada Customs and Revenue Agency with respect to a particular situation.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-8531.

Yours truly,

Gordon M. Kostiuk
Aboriginal Affairs Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate