6 June 2002 GST/HST Interpretation 38785[2] - Two-Year Time Limit on GST/HST General (Code 8) Rebates

Dear XXXXX:

This is in response to your letter of XXXXX and your supplementary letters of XXXXX. You have some concerns regarding the current two-year time limit on GST/HST general rebates filed as code 8 by an Indian band, tribal council or band-empowered entity.

Interpretation Requested

Given the nature of the claims filed as code 8 under the general rebate by Indian bands and band-empowered entities you are asking whether it would not be more appropriate to administer code 8 rebates under section 259 rather than section 261 of the Excise Tax Act (ETA). Barring that you would like to see the time limit extended to 4-years rather than the current 2-years.

Interpretation Given

TIB B-039R GST Administrative Policy - Application of GST to Indians provides point of purchase tax relief to Indian bands and band-empowered entities when the service relates to band management activities or for real property on reserve. The exception to the point of purchase tax relief is where an Indian band or band-empowered entity acquires off-reserve purchases of transportation, short-term accommodation, meals and entertainment. For these expenses GST/HST is recoverable by filing a general rebate. An Indian band, tribal council, or band-empowered entity would file for the above-noted expenses under reason code 8 on the application form. Given the unique nature of the tax relief provided CCRA has taken the position that the appropriate mechanism for recovery of the tax is under section 261 of the ETA.

There was never any official policy that extended the ETA time limit. The practice evolved as a result of providing some administrative tolerance on a case-by-case basis in situations where it was felt appropriate to do so. In fact, the acceptance of applications filed late by Indians, Indian bands and band-empowered entities became automatic. Over time, this practice continued until tax professionals and their First Nation clients understandably began to assume that the general rebate time limits did not apply to Indians, Indian bands and band-empowered entities.

In reviewing our administrative practices, the CCRA decided to apply the general rebate time limits that are applicable to all persons. There is no legislative exception from the rebate time limit that is provided to anyone, including a First Nation person. The concerns raised in your letters have been looked at. However, as indicated it is felt that administratively providing a rebate time limit exceeding two years would not be appropriate.

If you wish to pursue a request for legislative changes to either section 261 or 259 of the ETA to provide for a 4-year time limit for code 8 type rebates you may wish to contact the Department of Finance. Changes to the ETA are within their scope of responsibility. However, please be assured that they are already aware of the issue and there is no current plan to amend the time limits for rebates under the ETA at this time.

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.

For your convenience, find enclosed a copy of section 1.4 of Chapter 1 of the GST/HST Memoranda Series.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact Dave Caron, manager, Aboriginal Affairs Unit at (613) 954-7957

Yours truly,

Roy Osudar
Acting Director
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate

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