Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
GST/HST Rulings Directorate
5th floor, Tower A, Place de Ville
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 244942
Business Number: […]
Dear [Client]:
Subject: GST/HST ruling
A band-empowered entity’s entitlement to a rebate for the GST/HST paid in error
Thank you for your correspondence of [mm/dd/yyyy], concerning a band-empowered entity’s entitlement to a rebate for the goods and services tax/harmonized sales tax (GST/HST) paid in error. We apologize for the delay in this response.
The HST applies in the participating provinces at the following rates: 13% in Ontario; and 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island. The GST applies in the rest of Canada at the rate of 5%.
The Canada Revenue Agency (CRA) uses the term Indian because it has legal meaning under the Indian Act.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
STATEMENT OF FACTS
We understand the following:
1. […] ([…][the Corporation]) is a band-empowered entity as defined in GST/HST Technical Information Bulletin B-039, GST/HST Administrative Policy – Application of the GST/HST to Indians (TIB B-039).
2. The Corporation’s head office is located on […][a reserve] in […] ([…][the Province]).
3. The Corporation is registered for GST/HST purposes under the business number noted above and has stated that it is a non-profit organization for GST/HST purposes. The Corporation’s band management activities do not relate to their commercial activities.
4. The Corporation […][makes supplies of services] to […][persons eligible for the GST/HST relief described in TIB B-039].
5. The Corporation’s services are provided free of charge to [persons eligible for the GST/HST relief described in TIB B-039]. Most of the services that the Corporation provides are performed on various reserves throughout the Province.
6. […].
7. The Corporation has paid the GST/HST on supplies purchased on or delivered to a reserve, as well as services acquired off a reserve.
8. The Corporation has filed form GST189, General Application for Rebate of the GST/HST (GST189) for the claim periods ending […] in respect of the GST/HST paid on supplies purchased on or delivered to a reserve as well as GST/HST paid on supplies of services acquired off a reserve. […].
RULINGS REQUESTED
You would like to know
1. If the Corporation is entitled to claim a rebate of 100% of the GST/HST paid or payable on services acquired off-reserve for band management activities under reason code 1A of GST189.
2. If a rebate under reason code 1A is not available for services acquired off-reserve by a band-empowered entity for band management activities, please confirm that the Corporation would be entitled to claim a rebate under reason code 1C of GST189.
RULINGS GIVEN
Based on the facts set out above, we rule that:
1. The Corporation is entitled to claim a rebate of 100% of the GST/HST paid on services acquired off-reserve for band management activities under reason code 1A of form GST189, where the conditions for the GST/HST relief described in TIB B-039 are met.
2. Since the Corporation is entitled to claim a rebate under reason code 1A for the GST/HST paid on services acquired off-reserve for band management activities, a rebate under reason code 1C of form GST189 is not applicable.
EXPLANATION
GST/HST relief for services acquired by a band-empowered entity
A band empowered-entity that acquires services on or off a reserve for band management activities or for real property on a reserve is entitled to the GST/HST relief described in TIB B-039, provided the band-empowered entity gave a certificate to the vendor indicating that the service is being acquired for band management activities or for real property on a reserve. Please refer to TIB B-039 for an example of a certificate.
Band management activities are defined in TIB B-039 as activities or programs undertaken by a band or band-empowered entity that are not commercial activities for which they would otherwise be entitled to claim input tax credits. In determining whether the acquisition of a supply is for band management activities, the output of the activity or program will be the determining factor, as opposed to the objectives of the activity or program.
The CRA considers band management activities to be those activities conducted by bands and band-empowered entities with regard to their normal administration, programs, services and activities that are designed and/or delivered for the well-being or assistance of band members and are generally similar to those provided by other levels of government. These include, for example, activities undertaken by schools, hospitals and social service entities.
GST189, General application for rebate of GST/HST – reason code 1A
A band-empowered entity who has paid any amount of GST/HST in error when they were entitled to the GST/HST relief described in TIB B-039, can claim a general rebate of the GST/HST under reason code 1A of form GST189. Rebate applications for reason code 1A must be filed no later than two years after the amounts were paid.
Therefore, the Corporation is entitled to claim 100% of the GST/HST paid on services acquired off reserve for band management activities or for real property on a reserve under reason code 1A of form GST189, where the conditions for GST/HST relief described in TIB B-039 are met.
ADDITIONAL INFORMATION
All services acquired by a band-empowered entity for real property off a reserve, even if the services are for band management activities, are not eligible for the GST/HST relief as described by TIB B-039 and are therefore subject to the GST/HST.
A band-empowered entity must pay the GST/HST in respect of off-reserve purchases of transportation, short-term accommodation and meals and entertainment. However, the band-empowered entity may be entitled to recover the GST/HST paid on these purchases under reason code 8 of form GST189 where certain conditions are met. Please refer to TIB B-039 under the heading “General rebates (reason codes 1A and 8 on Form GST189)” for more information.
DISCLAIMER
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1-4, Excise and GST/HST Rulings and Interpretations Service, the Canada Revenue Agency (CRA) is bound by the ruling given in this letter provided that: none of the issues discussed in the ruling are currently under audit, objection, or appeal; no future changes to the ETA, regulations or the CRA’s interpretative policy affect its validity; and all relevant facts and transactions have been fully and accurately disclosed. The additional information given in this letter is not a ruling and does not bind the CRA with respect to a particular situation. Future changes to the ETA, regulations, or the CRA’s interpretative policy could affect the additional information provided herein.
CONTACT
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 873-355-5800. Should you have additional questions on the interpretation and application of the GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287 or by fax to 1-418-566-0319.Sincerely,
Kristine Melloh
Rulings Officer
Governments Sectors and Indigenous Affairs Unit
Public Service Bodies and Governments Division
GST/HST Rulings Directorate
Email this Content