GSTHST Rulings and
Interpretations Directorate Place Vanier, Tower C, 10th Floor
25 McArthur Avenue
Vanier, Ontario
XXXXX K1A 0L5
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Attention: XXXXX
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February 26, 1998
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Subject:
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GSTHST INTERPRETATION
Real Property Construction on Reserve Lands
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Dear XXXXX
Thank you for your letter of February 5, 1998, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to construction services provided on reserve.
Interpretation Requested
You have requested confirmation that construction services provided to an Indian band on reserve will be relieved of tax. You have provided the following information.
1. An Indian Band retains the services of a contractor to construct a building for use in the operation of a commercial business on the Band's reserve lands.
2. The construction costs will be borne by the Band and the contractor will invoice the Band.
3. The Band will provide the contractor with a certificate claiming an exemption of GST on all invoices or billings submitted to the Band.
Interpretation Given
Revenue Canada's administrative policy concerning the application of tax to purchases by Indians and Indian bands is summarized in Technical Information Bulletin B039R GST Administrative Policy: Application of GST to Indians. The treatment of Indian purchases under the GSTHST is consistent with the Indian Act under which the personal property of an Indian or an Indian band situated on a reserve and their interests in reserves are not subject to tax.
Based on the information provided, construction services provided to an Indian band for the construction of a building on the reserve for use in the band's commercial activities will be relieved of tax. A certificate is not required. The tax relief flows from the fact that the band is acquiring construction services for real property on reserve. The contractor will not charge GSTHST.
Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 954-7954.
Yours truly,
Suzanne Leclaire
A/Senior Policy Officer
Public Service Bodies and Governments Division
GSTHST Rulings and Interpretations Directorate
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