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GST/HST Rules for Supplying Goods and Services to First Nations Customers in Canada

by | Feb 23, 2025

When a GST/HST-registered supplier provides goods or services to First Nations customers in Canada, the tax treatment depends on various factors, including the location of the transaction and the specific provincial rules that apply.

General GST/HST Exemption Rules for First Nations

You can read more about the First Nations exemption on the CRA webshite here.

Who Qualifies for Exemption?

The GST/HST exemption applies to purchases made by:

  • Status Indians, as recognized under the Indian Act.
  • Indian bands and band councils.
  • Eligible Indigenous organizations.

To qualify for an exemption, status Indians must present their Certificate of Indian Status (status card) or Temporary Confirmation of Registration Document (TCRD) at the time of purchase.

On-Reserve Purchases (Generally Tax-Exempt)

  • Goods sold to a status Indian are exempt from GST/HST if they are delivered to a reserve by the vendor or their agent.
  • Services performed entirely on a reserve (e.g., haircuts, vehicle repairs) are also generally tax-exempt.
  • Some services related to real property on a reserve (e.g., construction services) may also be exempt.

Off-Reserve Purchases (Generally Taxable, with Some Exceptions)

  • Goods purchased off-reserve are generally subject to GST/HST unless they are delivered to a reserve by the vendor.
  • Services provided off-reserve (e.g., legal, accounting, consulting services) are generally taxable, unless they directly relate to reserve property or specific exempt activities.

Internet & Remote Sales

  • If a First Nations individual buys goods online, the sale may be GST/HST-exempt if the goods are delivered to a reserve.
  • Digital services (e.g., streaming, SaaS) are generally taxable, regardless of the buyer’s status.

Provincial Variations

While GST/HST rules are federally governed, some provinces administer their own provincial sales taxes (PST) with unique exemptions.

Provinces with GST/HST (Harmonized Sales Tax)

In Ontario (13%), New Brunswick (15%), Newfoundland & Labrador (15%), Nova Scotia (15%), and Prince Edward Island (15%), the HST portion follows federal GST rules:

  • Status Indians are exempt from HST when goods are delivered to a reserve.
  • Services performed on a reserve are generally exempt.
  • In Ontario an exemption of the Provincial portion of the HST is available to holders of a Certificate of Indian Status Card for the purchase of most tangible goods and services to maintain them, even if purchased off reserve (although the federal GST portion may still be chargable).  Vendors may offer this at point of sale, but are not required to as eligible individuals can claim it back from the government.  You can read more about this on the Ontario website here.

Provinces with Separate PST

  • British Columbia (7% PST + 5% GST)
    • PST exemption applies to goods delivered to a reserve and services performed on a reserve.
    • Status Indians are also PST-exempt for vehicles, boats, and aircraft purchased off-reserve if used primarily on a reserve.
  • Manitoba (7% RST + 5% GST)
    • Status Indians and bands are exempt from RST for goods and services purchased on a reserve or delivered to a reserve.
    • Vehicles purchased by status Indians are RST-exempt if registered to an address on a reserve.
  • Saskatchewan (6% PST + 5% GST)
    • Status Indians are exempt from PST if goods are delivered to a reserve.
    • PST does not apply to services performed on a reserve.
  • Quebec (9.975% QST + 5% GST)
    • The GST exemption applies, but QST rules differ slightly:
      • QST exemption applies to goods delivered to a reserve.
      • Certain services, such as those related to real property on a reserve, may also be QST-exempt.

Alberta, NWT, Nunavut, Yukon (No PST, Only 5% GST)

  • The standard GST exemption rules apply (i.e., tax-exempt purchases must be delivered to a reserve or provided on a reserve).

Additional Considerations

  • Vendors must document tax-exempt sales properly (e.g., retain a copy of the status card and proof of delivery to a reserve).
  • Rebates may be available if tax was paid incorrectly on exempt transactions.
  • Self-Government Agreements: Some Indigenous groups have self-tax agreements where different tax rules may apply.

Understanding and correctly applying GST/HST rules for First Nations customers is crucial for compliance. Vendors should ensure they have proper documentation and remain updated on changes to tax policies affecting Indigenous communities.