Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.
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Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
Case Number: 120952
Attention: XXXXX XXXXX
September 30,2010
Dear XXXXX:
Subject:
GST/HST RULING
GST on Legal Services provided to an Indian Band
Thank you for your correspondence of XXXXX, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to legal services provided to an Indian band. You provided us with a signed copy of the agreement made between the Indian band and the lawyer, and a signed copy of the Settlement Agreement made between the Indian band and Her Majesty the Queen in Right of Canada.
HST applies at the rate of 15% in Nova Scotia, 13% in Ontario, New Brunswick, and Newfoundland and Labrador, and 12% in British Columbia. GST applies at the rate of 5% in the remaining provinces and territories.
All legislative references are to the Excise Tax Act (ETA) and the regulations thereunder, unless otherwise specified.
Statement of Facts
From the information provided in your letter of XXXXX, we understand the facts are as follows:
1. The XXXXX Indian band is a "band" within the meaning of that term in subsection 2(1) of the Indian Act.
2. XXXXX, entered into a written agreement (the "Fee Agreement") with the XXXXX Indian band to pursue an Action XXXXX.
3. The Free Agreement provides for a contingency fee whereby the band would pay a fee to XXXXX equal to XXXXX % of the total settlement if and when received from Her Majesty as a result of the claim made [XXXXX].
4. XXXXX.
5. XXXXX.
6. XXXXX diligently pursued the Action and the Specific Claim from XXXXX, without payment of any fees made by the band in accordance with the Fee Agreement.
7. On XXXXX, a Settlement Agreement was reached between the band and Her Majesty. The Settlement Agreement provided for XXXXX as a full and final settlement of the Action and Specific Claim.
8. In XXXXX, XXXXX received a fee from the band in the amount of $XXXXX in accordance with the provisions of the Fee Agreement.
9. XXXXX obtained a certificate from the band certifying that the services obtained from him pursuant to the Fee Agreement were for band management activities in accordance with the CRA's administrative policy as outlined in GST/HST Technical Information Bulletin, B-039, GST/HST Administrative Policy - Application of GST/HST to Indians.
Ruling Requested
You would like to know if XXXXX contingency fee paid by the XXXXX Indian band under the Fee Agreement is relieved of GST/HST.
Ruling Given
Based on the facts set out above, we rule that XXXXX contingency fee paid by the XXXXX Indian band under the Fee Agreement is relieved of GST/HST, as it is considered to be acquired by the band for band management activities.
This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.
Explanation
Legal services acquired by an Indian band that relate to land claims and/or treaty or aboriginal rights are considered by the CRA to be acquired for band management activities.
Should you have further questions or require clarification of the matter above, please do not hesitate to contact me at 613-957-1175.
Yours truly,
Dwight Kostjuk
Senior Rulings Officer
Aboriginal Affairs Unit
PSBs and Governments Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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