10 December 2001 General Information Letter 38098 - GENERAL INFORMATION LETTER Application of TIB-039R to Goods Purchased on Surrendered Lands

Dear XXXXX:

Thank you for your letter of November 2, 2001, with attachments, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to goods purchased by Indians on surrendered lands, sent to Mr. Denis Lefebvre, our previous Assistant Deputy Minister. Our current Assistant Commissioner, Mr. Bill McCloskey has asked me to reply on his behalf.

Our understanding of your situation is as follows. The XXXXX has been asked by the XXXXX to notify businesses located on the band's surrendered lands that the members of the band are relieved from paying GST when making purchases at locations on the surrendered lands. You have enclosed photocopies of maps of XXXXX in which areas of black denote "unsold surrendered land."

You would like to have clarification of the application of the GST/HST to purchases made by Indians on surrendered lands.

Part IX of the Excise Tax Act provides for the GST/HST, but the tax relief for Indians and bands is provided in the Indian Act. Our publication, TIB-039R, Application of GST/HST to Indians, administratively provides GST/HST relief in a manner that is consistent with the terms of the Indian Act. We enclose TIB-039R for your consideration.

For vendors selling goods to Indian individuals, it would normally be paragraph 87(1)(b) of the Indian Act that would apply, as it states "the personal property of an Indian or band situated on reserve." TIB-039R explains that for tax relief from the GST/HST to be available to an Indian individual, the property must be acquired on reserve or delivered to the reserve by the vendor or the vendor's agent. In defining the term "reserve," TIB-039R paraphrases the Indian Act definition, but it should also be noted that under section 2 of the Indian Act, the term "surrendered lands" is defined as "a reserve or part of a reserve or any interest therein, the legal title to which remains vested in Her Majesty, that has been released or surrendered by the band for whose use and benefit it was set apart."

The determination of whether or not a tract of land qualifies as "surrendered lands" and thus a reserve or part of a reserve for purposes of the Indian Act falls within the responsibility of the Department of Indian Affairs and Northern Development. I have taken the opportunity to forward your letter, including the maps, to the following address:

Denis Gros-Louis
Acting Registrar
Land Research and Titles
Department of Indian Affairs and Northern Development
Rm. 17H, 10 Wellington St.
Hull, Quebec K1A 0H4

If you require additional clarification or information, do not hesitate to contact Dave Caron, Manager of the Aboriginal Affairs Unit, at (613) 954-7957, or Dwight Kostjuk, Policy Analyst, at (613) 957-1175.

Yours truly,

Ed Gauthier
Deputy Assistant Commissioner
Excise and GST/HST Rulings Directorate
Policy and Legislation Branch