5 January 2004 GST/HST Interpretation 44465 - Rebate for an Indian Band Transporting Members to Medical Appointments

Please note that the following documents, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ces documents, bien qu'exacts au moment émis, peuvent ne pas représenter la position actuelle de l'Agence.

Dear XXXXX:

Thank you for your request for a letter from us concerning the availability of a Goods and Services Tax (GST)/Harmonized Sales Tax (HST) rebate for Indian bands regarding the transport of their members to off-reserve medical appointments. The clarification of our position is based on information XXXXX provided to us in a meeting XXXXX. XXXXX.[.]

A band or band-empowered entity may be eligible to apply for a rebate of GST/HST using Form GST189, General Application for Rebate of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST), using code 8 as the reason for rebate request. For your convenience I have attached a copy of the rebate application.

Our position concerning the availability of the code 8 rebate for Indian bands for the transportation of members to off-reserve medical appointments is summarized in the question and answer provided below. For purposes of the simplicity, in this letter the terms "Indian band" or "band" includes a band-empowered entity.

It is our understanding from the information provided that the First Nations and Inuit Health Branch (FNIHB) of Health Canada has a program that provides funds for off-reserve medical transportation of Indian band members. Under this program some Indian bands are funded through contribution agreements. Funds provided to an Indian band under a contribution agreement are to cover eligible expenses (e.g., transportation, accommodation and meal expenses, including taxes). The medical transportation benefit is available only under guidelines and eligibility criteria established by FNIHB.

Interpretations Requested

Does a band qualify for a code 8 rebate of GST/HST where allowances and reimbursements are paid to band members to attend personal medical appointments at a location off reserve?

Interpretation Given

An allowance or reimbursement paid to a band member to attend a personal medical appointment does not qualify for the code 8 rebate of GST/HST.

Explanation

Under the policy of Canada Revenue Agency (CRA, formally CCRA) described in Technical Information Bulletin B-039R "GST Administrative Policy - Application of GST to Indians" (TIB B-039R), services acquired by a band, either on or off reserve, for band management activities or for real property on reserve are not subject to the GST/HST. An exception is made for off-reserve purchases made by bands of transportation, short-term accommodation, meals and entertainment (this group of supplies is referred to below as TEAM). Although supplies of TEAM are regarded as services for purposes of TIB B-039R, tax is payable when they are acquired off reserve by a band.

GST/HST paid by a band for supplies of TEAM acquired off reserve may be recovered by way of a rebate application under code 8 where supplies are acquired for band management activities or for real property on reserve. TIB B-039R does not specify that any code 8 rebate is available to a band where one of its officials acquires a supply of TEAM while traveling off reserve. However, the CRA has extended the code 8 rebate to include the tax portion of an allowance or reimbursement of TEAM travel expenses incurred by a "band official" acting on behalf of a band.

A "band official" is a person with the authority to represent the band in an official capacity. Persons acting on behalf of a band include, for example, employees, officers, chiefs, members of the band council and other band members, such as elders, who are representing the band in the delivery of band management activities or for real property on reserve. The term "officer" does not include contractors, consultants, or other self-employed persons, who are providing services to the band.

In summary, a code 8 rebate is available only where:

1. the GST/HST has been properly charged by the supplier;

2. the off-reserve TEAM expenses are for "band management activities or real property on reserve" (a term referred to below as band purposes); and

3. the band has paid GST/HST on the acquisition of TEAM; or,

4. where an employee or band official pays TEAM expenses, including GST/HST, the actual costs are reimbursed or a reasonable allowance is given by the band to the employee or band official in respect to these expenses.

Our position under item 4 recognizes that it may be expedient for the band to have its officials pay for TEAM expenses when traveling off reserve for band purposes. Although the general requirement is that the band must have paid GST/HST on the supplies of TEAM, the CRA allows a rebate of the tax portion of reimbursements and allowances paid to employees and other band officials for TEAM expenses incurred while traveling off reserve.

In summary, the rebate provided under code 8 is intended for off-reserve TEAM expenses acquired by a band while one of its band officials travels for band purposes. Where band officials pay for TEAM expenses while traveling for band purposes and the band reimburses or pays an allowance to the official, the band is also allowed to claim a rebate under code 8 as if it acquired the supplies of TEAM. However, where band members travel off reserve for medical appointments, they are not traveling in the capacity as band officials and the band has not acquired the supplies. Consequently, the rebate under code 8 is not applicable to these personal expenses of the band members.

The foregoing comments do not represent a change of policy. However, this interpretation clarifies our administrative position. These comments are not rulings as they do not address a particular situation, and, in accordance with the guidelines set out in section 1.4 of Chapter 1 of the GST/HST Memoranda Series, they do not bind the Canada Revenue Agency with respect to a particular situation. Instead, these comments refer to general situations undertaken by Indian bands and band-empowered entities. The application of the GST/HST provided herein is based on our administrative policies.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact Dwight Kostjuk, Rulings Officer, at 957-1175.

Yours truly,

Dave Caron
Manager
Aboriginal Affairs Unit Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate

Attachment: form GST189