Tax memo: Nova Scotia HST

Guidance on sales to Indians

Memo No. 2012-23

The Harmonized Sales Tax (HST) in Nova Scotia applies to most taxpayers. However, certain supplies made to Aboriginal persons in Canada are not subject to HST. It is important for a dealer to understand the circumstances when HST does not apply, to ensure that the proper tax treatment is applied.

This guidance sets out the Canada Revenue Agency’s administrative policy guidelines in effect as at the date of this memo. Because tax positions are ever-evolving, dealers should continue to discuss issues with their tax advisers to ensure that their positions remain current.

For an exemption to apply on a sale to an Indian, the individual must provide a copy of his/her Secure Certificate of Indian Status Card (Card). These Cards are issued to eligible Indians by the Aboriginal Affairs and Northern Development Department Canada (the Department) or, if issued before June 13, 2011, by the Department of Indian and Northern Affairs Development. HST relief may be provided only to the cardholder and not to another party purchasing on his/her behalf. When HST relief is provided, the dealer must make notification on the sales documentation of the registry number or the band name and family number (commonly referred to as the band number/treaty number).

Dealers can also accept a Temporary Confirmation of Registration Document (TCRD). TCRDs are issued by the Department, are valid for a 12-month period and evidence that a registration is pending for a Card. TCRDs contain the name of the individual, a registration number and the expiration date of the TCRD. In these circumstances, the Indian must present the original TCRD and the dealer must make notification on the sales documentation of the registration number and the expiration date of the TCRD.