The Canada Revenue Agency (CRA) recently updated Information Sheets GI-114, “Application of GST/HST to Indian Individuals” and GI-117, “Information for Off-reserve Businesses that Sell Goods or Provide Services to Indians, Indian Bands, or Band-empowered Entities”, both related to the tax status of sales to status Indians.
While the requirement to obtain suitable documentary evidence for granting GST/HST tax relief has not changed, both documents confirm that the new Secure Certificate of Indian Status card (SCIS card) and the Temporary Confirmation of Registration Document (TCRD) are acceptable.
Both bulletins also re-iterate the second condition for granting the exemption: only goods and services delivered or performed on a reserve are eligible for the exemption. Goods picked up by the status Indian off-reserve must be taxed (this includes goods delivered to a purchaser’s carrier). Documentation/proof of delivery by the vendor must be properly recorded and maintained.
In Ontario only, status Indians may be granted point-of-sale relief for the provincial portion of the HST for qualifying off-reserve goods or services. Further details on this are provided in the Government of Ontario Guide 80, “Ontario First Nations Point-of-Sale Exemptions” and GST/HST Info Sheet GI-106, “Ontario First Nations Point-of-Sale Relief - Reporting Requirements for GST/HST Registrant Suppliers”.
Additionally, GI-117 mentions that besides applying to individuals, the conditions listed above also apply to bands and unincorporated band-powered entities for both goods and services. Exemptions exist where the band or band-empowered entity issues a certificate attesting that the services (whether acquired on or off reserve) are:
- related to band management activities; or
- for real property on a reserve.
However, an exception exists for GST/HST on meals, entertainment, transportation, and accommodation (eligible travel expenses) acquired off-reserve. GST/HST on these expenses must be paid by Indian bands and band-empowered entities who may then be eligible for a rebate.
For more information, both documents refer registrants to GST/HST Technical Information Bulletin B-039, “GST/HST Administrative Policy - Application of the GST/HST to Indians” which was last updated in June 2013.