Supporting Documents for Sales Made to Indians Where no Tax is Collected
When sales are made on a reserve to an Indian and neither the GST nor the QST is collected by virtue of the fact that the Indian is not required to pay taxes, the vendor must keep supporting documents proving that the sale was made to an Indian registered under the Indian Act.
The vendor must note, on his or her copy of the invoice, the Indian purchaser’s registration number, shown on the Certificate of Indian Status card (status card) issued by Aboriginal Affairs and Northern Development Canada (AANDC). The band name and family number may also be accepted. Note that the family number is often called the "band number" or "treaty number."
In order to not collect taxes on a sale made to a newly registered Indian who qualifies under the Gender Equity in Indian Registration Act, the vendor can accept the Temporary Confirmation of Registration Document (TCRD) issued by AANDC as proof of registration.
An Indian making a purchase must present the original TCRD to the vendor. This document provides the individual’s name and registration number, the effective date of registration and the expiration date of the TCRD. The original TCRD also has a raised seal of the Indian Registrar in the bottom right-hand corner. The vendor must note the registration number and the expiration date on his or her copy of the invoice.
AANDC is currently developing a Secure Certificate of Indian Status card (SCIS card) that will replace the current status card and the TCRD. However, delays in issuing the new SCIS card mean that a number of newly registered Indians will not receive their SCIS card prior to the expiration of their TCRD.
Therefore, vendors may continue to accept the TCRD even if it is expired. In such a case, the vendor can request an additional piece of photo ID. This procedure will be reviewed once AANDC has issued the new SCIS cards to all Indians registered under the Indian Act.
Photocopies of the status card and TCRD accepted in certain situations
With more and more purchases being made over the telephone, online or using other electronic means, it is becoming more difficult for Indians to present their original status card or TCRD so that the vendor can make the sale without collecting taxes. In these cases, the vendor must ask that the status card or TCRD be photocopied and sent by mail or sent electronically (for example, by fax or email) as proof that the sale was indeed made to an Indian. Information on the status card or TCRD given verbally over the telephone or completed online is not considered sufficient proof.
For more information, consult GST/HST Notice 264, Sales Made to Indians and Documentary Evidence - Temporary Confirmation of Registration Document, and GST/HST Info Sheet GI-127, Documentary Evidence when Making Tax-Relieved Sales to Indians and Indian Bands over the Telephone, Internet and Other Electronic Means.