Reason code 23 - Ontario First Nations point-of-sale relief

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Reason code 23 - Ontario First Nations point-of-sale relief

The Government of Ontario relieves Status Indians, Indian bands and councils of an Indian band (status Indian purchasers) from tax on qualifying off-reserve supplies of property and services. The relief is an amount equal to the 8% provincial part of the HST.

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Are you eligible for the rebate?

You can claim a credit under reason code 23 if you are a GST/HST registrant supplier who credited status Indian purchasers, at the time of sale in Ontario,  an amount equal to the 8% provincial part of the HST on qualifying off-reserve supplies of property or service.

When a GST/HST registrant supplies qualifying property or service off a reserve to a status Indian purchaser, the registrant may credit an amount equal to the 8% provincial part of the HST and only collect the 5% federal part of the HST on that property or service.

Do not claim a rebate under reason code reason 23 if you are a status Indian purchaser, you paid the 8% provincial part of the HST on the purchase of off-reserve qualifying property or services, and the supplier did not credit you the provincial part of the HST.

Instead, you would apply a rebate equal to 8% the provincial part of the HST paid from the Ontario Ministry of Finance. Also, for the  period of July 1, 2010 to August 31, 2010, the Government of Ontario will refund status Indian purchasers an amount equal to the 8% provincial part of the HST paid on qualifying off-reserve supplies of property and services.

How do you report and claim the rebate?

How GST/HST registrant suppliers report credited amounts

In contrast to point-of-sale rebates for certain designated items (such as children's items and books), the supplier would be required to include on its GST/HST return:

  • on Line 105, Total GST/HST and adjustments, the amount of HST collectible for the supplies at the full 13% rate so that net tax for the reporting period shows tax collected or collectible at 13%; and
  • on Line 111, Rebates, the total amount credited at the point of sale.

Also, the GST/HST registrant would be required to complete Form GST189, General Application for Rebate of GST/HST, using reason code 23. On the form, the registrant would be required to:

  • report the amount that has been credited to status Indian purchasers at the point of sale;
  • indicate in the appropriate box that this amount has been set off on Line 111 of the GST/HST return against the remittance amount on the GST/HST return; and
  • identify the reporting period to which the set-off on the GST/HST return applies.

Do not include amounts for items that are otherwise relieved from GST/HST or eligible for a point-of-sale rebate of the provincial part of the HST for certain designated items.

How GST/HST registrant suppliers show the amount credited on their invoices

When disclosing the HST on an invoice or receipt issued for a qualifying off-reserve supply of property or services for which the GST/HST registrant supplier has credited an amount to a status Indian purchaser at the point of sale, the registrant supplier may show:

  • the total amount of the HST payable (or the total HST rate) with the rebate amount paid or credited shown separately;
  • the total HST payable as an amount net of the rebate amount credited, or
  • the total price of the qualifying property or service that includes HST at a net rate of 5%.

The netting of the HST amount to 5%, or having the price include HST at a net rate of 5%, is only permitted on the invoice, while the GST/HST return must show tax at 13% on Line 105, Total GST/HST and adjustments, and the amount credited on Line 111, Rebates.

Unlike other cases where the 8% provincial part of the HST is credited by GST/HST registrants (such as the point-of-sale rebates for certain designated items), the amount credited for qualifying off-reserve purchases made by status Indian purchasers is not a deduction in the calculation of the registrant's net tax.

Where do you send your rebate application?

The GST/HST registrant would send their GST/HST return for the reporting period in which the set-off is made, with the completed Form GST189, to their local tax centre.

If you are using GST/HST NETFILE to file your GST/HST return, you can also use GST/HST NETFILE to electronically file your rebate application. There is no need to send us a paper copy.

However, if you choose not to file your rebate application using GST/HST NETFILE, you must mail your completed application form to:

Sudbury Tax Centre
1050 Notre Dame Avenue
Sudbury ON P3A 5C1

If you are filing your GST/HST return electronically with Revenu Québec, send your completed rebate application to:

Summerside Tax Centre
275 Pope Road
Summerside PE C1N 6A2

What is the due date to file your rebate application?

The registrant submits Form GST189 with its GST/HST return for the reporting period in which the set-off is made to the local tax centre.

If you are mailing the application, the tax centre should receive the GST189 form on or before the due date of the GST/HST return.

What records do you include with your application and what records do you keep?

If you apply for a rebate under reason code 23, you do not have to send us documentation. To find out what documentation you need to keep to support your claim, see Point-of-Sale Exemption for Status Indians.

Forms and Publications

Provincial and territorial government partners

Multimedia

Video: Ontario First Nations Point-of-Sale Relief - Reporting Requirements for GST/HST Registrants (8:56 min)

Date modified:
2015-12-18