1 June 2000 GST/HST Interpretation 28957 - Disclosure of First Nation Taxes

XXXXX

This is in response to your memorandum of January 27, 2000, regarding the disclosure requirements of section 223 of the Excise Tax Act with respect to First Nation taxes (FNT). We apologize for the delay in providing you with our response.

A registrant can meet the disclosure requirements of subsection 223(1) of the ETA by giving clear visible notice of the required information to the recipient of a taxable supply at the place where the supply is made. In other words, a registrant can display a sign indicating that tax is included in the total amount payable or that, tax is extra. Although the current wording of subsection 223(1) provides that the use of signage is only available where supplies are made on a tax-included basis, there is a proposed amendment to ensure that signage can also be used in tax-extra situations. The proposed amendment restores this flexibility which was originally given to registrants prior to the legislative amendments that were made to address the implementation of the HST. The CCRA has always maintained the position that signage can be used in both situations.

There is no legislative requirement that a registrant must choose to use only one of the available methods to meet the disclosure requirements of section 223 of the ETA, that is, signage, invoices, receipts or agreements in writing. Furthermore, there is no requirement that all supplies made by the registrant must be made on either a tax-included or tax-extra basis. A registrant may choose to meet the disclosure requirements in a different manner for different supplies.

If a registrant uses various disclosure methods, the disclosure in respect of each supply must be clearly indicated either in the document or signage used. For example, the use a sign that indicated that "Fuel and tobacco products include 7% XXXXX["] and another sign that indicated that "All products, other than fuel and tobacco, include 7% GST, where applicable" would be sufficient to meet the disclosure requirements of subsection 223(1) of the ETA. Alternatively, the above FNT sign could be used in conjunction with an indication, on an invoice, of the amount of the consideration for a taxable supply, that is not fuel or tobacco nor a zero-rated supply, and the amount of the tax payable in respect of that supply. As you can see, there is no requirement that each specific product be identified.

It should be noted that there is no requirement in the legislation that a registrant specify the name of the tax. As such, it could be argued that a sign indicating that "7% tax is included in the amount paid, where applicable" would be sufficient to meet the disclosure requirements for supplies subject to either the GST or the FNT. Furthermore, it is our understanding that the FNT is treated as a tax imposed under subsection 165(1) of the ETA. Pursuant to subsection 165.2(1) of the ETA, a registrant may calculate the tax payable under section 165 of the ETA on the total consideration payable for taxable supplies that are taxed at the same rate. As such, it would appear that a registrant with supplies that are subject to GST at 7% and FNT at 7% could total the consideration for those supplies and calculate the total tax payable based on 7% of the total consideration. Where a registrant chooses to disclose the tax on a tax-extra basis on an invoice, an indication of the total consideration payable and the total tax payable where all the supplies are subject to either FNT or GST would be sufficient to meet the disclosure requirements of subsection 223(1) of the ETA.

Should you wish to discuss this matter further, please do not hesitate to contact Marcel Boivin at 954-2488.

D. Caron
Manager
General Operations
General Operations and Border Issues Division