29 May 2000 GST/HST Interpretation 31013 - Persons Claiming Exempt Status

Dear XXXXX

I refer to your letter of April 17, 2000, to XXXXX Canada Customs and Revenue Agency (CCRA) concerning individuals claiming exempt status. XXXXX requested that we respond to your query.

Statement of Facts

Our understanding of the facts is as follows:

On two occasions you have had customers come into XXXXX XXXXX stores presenting a card from the XXXXX and claiming exemption from Provincial and Federal sales taxes.

The XXXXX card has the following characteristics:

•   Plastic, credit card size, photo on the left hand side

•   Card states that holder is exempt from paying both taxes (e.g. GST/HST and PST)

•   XXXXX

Interpretation Requested

Does the XXXXX card entitle its holder to be exempt from paying the GST/HST?

Interpretation Given

The XXXXX card does not entitle its holder to be exempt from paying the GST/HST. Therefore, individuals presenting these and other similar cards must pay the GST/HST where applicable.

Please note that vendors who do not collect GST/HST from an individual falsely claiming to be exempt from the GST/HST, must still remit the tax that should have been collected.

Indian individuals can purchase goods and services without paying the GST/HST under certain conditions. When these conditions are met, the CCRA accepts the Certificate of Indian Status card issued by the Department of Indian Affairs and Northern Development (DIAND) as proof of Indian status.

The Certificate of Indian Status card displays the Canadian maple leaf logo immediately followed by "Indian and Northern Affairs Canada". The certificate card may also contain the following information:

•   the person's photo

•   the person's name

•   a 9- or 10-digit registry number

•   band name

•   family number

An Indian individual may be eligible for tax relief if the individual provides the Certificate of Indian Status card and:

•   the goods are sold on a reserve, or the goods are delivered XXXXX to a reserve; or

•   the services (for example, haircuts, small appliance repairs) are performed totally on a reserve.

XXXXX must clearly indicate on the sales documents (i.e., invoice) the registry number, or the band name and family number (commonly referred to as the "band number or treaty number") and must also retain proof of delivery, if the goods are delivered to the reserve (such as way bills, postal receipts, freight bills, mileage logs, dispatch records).

However, the tax relief described above does not apply in the Yukon. Effective February 15, 1998, all supplies of goods and services to Indians and Indian bands in the Yukon became subject to the GST/HST. In addition, goods purchased by a Yukon First Nation or a Yukon Indian person resident in the Yukon are subject to GST/HST even if the goods are delivered to a reserve outside the [XXXXX].

For more information on this subject please consult the GST Technical Information Bulletin B-039R, GST Administrative Policy: Application of GST to Indians, which is attached. This publication is also available on the CCRA Internet site under Forms and Publications, Technical Publications - Tax, GST/HST, GST/HST Technical Information Bulletins, B 001 - B 050, or by using this exact address: www.ccra-adrc.gc.ca/E/pub/gm/b-039r/README.html.

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) 957-1175.

Yours truly,

Don Gagnon
Technical Analyst
Aboriginal Affairs Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate

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