Manuals. Product Documentation. GST Tracking & Recovery. Xyntax Systems #2, 118 Railway Street West Cochrane, AB, T4C 2B5

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1 Manuals Product Documentation GST Tracking & Recovery Copyright 2006 Xyntax Group Inc. All rights reserved. This manual, as well as the software described in it, is furnished under license and may be used or copied only in accordance with the terms of such license. The content of this manual is furnished for informational use only, is subject to change without notice, and should not be construed as a commitment by Xyntax Group Inc. Xyntax Group Inc. assumes no responsibility or liability for any errors or inaccuracies that may appear in this documentation. Xyntax Native Systems and Xyntax Systems is a wholly owned division and Trade-name of Xyntax Group Inc., Calgary, Alberta, Canada. These pages are for reference material only and are not intended for training purposes. Xyntax makes no representation or guarantee as to the validity or accuracy of the material contained herein. Xyntax Systems #2, 118 Railway Street West Cochrane, AB, T4C 2B5

2 GST Tracking/Recovery Module Introduction Introduction The Xyntax GST Tracking/Recovery Module integrates with the Xyntax Accounts Payable and Accounts Receivable modules to assist the financial manager in identifying specific GST code types, embedded GST expenditures (e.g. travel allowances and expenses) and missed or incorrectly coded GST entries. Xyntax tracks and reports on the missed postings and identifies invoices, expenditure types and GL account codes which should have a GST component. This greatly reduces the GST recovery audit time by pointing directly to items for further investigation. Xyntax GST Tracking/Recovery Module allows triggering of GST by: Supplier Code or Customer Code GL account code AP or AR Type GST is automatically calculated and coded based on system settings. Comprehensive reports are produced for GST reconciliation. GST category codes will be attached to each invoice, regardless of any GST content. Invoices from vendors who supply exempt product or services will be assigned the EXE (Exempt) category. Band Member invoices or payments may be assigned this same category. The GST Tracking/Recovery Module contains 5 (five) pre-determined GST categary codes. These Xyntax codes represent the different CCRA GST categories. For more detail on these codes, go to Xyntax GST Codes page. These codes are: (Xyntax GST Code C8R ) Code 8 Travel Expense Rebate Used to recover (stated) GST on all travel expenses. (Xyntax GST Code C8S ) Code 8 Travel Expense Rebate Used to recover (deemed content) GST on all travel expenses. (Xyntax GST Code C1R ) Code 1 - Regular GST ITC Used to recover GST on all products or services. (Xyntax GST Code C1E ) Code 1 - GST Charged in Error Used to recover GST on products or services where tax was charged in error by vendor (Xyntax GST Code NPO ) NPO - Not for Profit Organization Rebate 50% of any other GST paid that was not recovered by Code 8 or Code 1 rebates (Xyntax GST Code EXE ) EXE - Exempt from GST No GST paid or GST content included in expense Setup Although the Xyntax codes are already encoded into the Xyntax GST Tracking/Recovery Module, these codes must be imported into each company within the Xyntax accounting system. This procedure also activates the GST system for either the AP module, AR module or both. 1. GS #50 - Setup Registration number and GST control accounts for each company. 2. GS #51 - Enter Opening balances for each Xyntax GST code and applicable for AP, AR or both. At this point the GST system has been activated for this company. 3. Determine, how do you want to track the GST. - Supplier Code or Customer Code - GL account code - AP or AR Type Xyntax Product Documentation GST Tracking/Recovery Intro

3 Supplier/Customer Code Trigger If you wish to assign a default GST code to a Supplier or Customer, the code must be entered into the AP 99-#1 (Enter/Edit Supllier Code) or AR 99-#1 (Enter/Edit Customer Code). If the Suipplier/Customer does not have a GST code assigned, the system will automatically assign EXE (Exempt) code to the invoice. Also, within the invoice entry screen, the cursor will not stop at the GST amount field, and will continue down to the GL distribution. Setting the GST code in each Supplier/Customer file tells the system to stop at the GST amount line to confirm amount and coding type. Again, to set the coding type in the Supplier/Customer file, you have two (2) options. 1. Enter coding in file manually AP 99-#1 (Enter/Edit Supllier Code) or AR 99-#1 (Enter/Edit Customer Code). 2. Run GS #20 to update the AP Supplier codes automatically. AR Customer must be done manually. GL Account Code Trigger You also have the option to assign a trigger to a GL Account code. The purpose of this feature is to identify possible embedded GST amounts whenever an expense (or revenue) is coded to this account. Example: Paying a band member a travel allowance and coding the expense to Staff Travel. The GST may not have been coded separately since no physical invoice showing GST has been submitted. However, by tagging this expense as having a possible GST component, a tracking report will show all invoices which have been coded to this account for further analysis and possible GST rebates. Note: If a GST component has already been assigned to this invoice, either by Supplier/Customer Code, or by AP/AR type code, the system will not request approval to tag the GL code amount. AP or AR type Trigger Certain AP/AR type can have GST components. Travel Allowances could be the most common non-invoice submitted expense. By attaching a GST code to a Xyntax AP type ensures that this expenditure will be included for possible GST component reporting and eventual rebates. Note: AP Types are an ideal method to track Band Member expenditures which may have GST amounts embedded. The concept behind the Xyntax GST Tracking/Recovery Module is to have the system catch expenditures that often fall through the cracks. By having three (3) separate triggering options, the expenditure is much more likely to be tagged for review at a later time. Period End Reporting (GS #90) Regardless of your reporting frequency, the Xyntax GST module allows you to reconcile the GST transactions based on period date ranges. As part of the reconciliation process the system flags the invoices which have been included in this period s report, so that invoices which are posted in the same period after the reconciliation process, are picked up in subsequent reporting periods. Therefore, if invoices are posted in GST periods already reconciled and reported, these invoices will show on current reports for ITC rebates. Xyntax Product Documentation GST Tracking/Recovery Intro

4 GST Tracking/Recovery Module GST Rebate Codes and Definitions GST Rebates available to First Nations for band-management activities. Travel expenses and allowances (Code 8) Products and Services on Reserve (Regular Rebate) (Paid in Error) (Code 1) Other GST (Non-Profit-Organizations) (NPO Rebate) Code 8 Travel Expense Rebate (Xyntax GST Code C8R ) Used to recover (stated) GST on all travel expenses. Travel must relate to band-management activities Use for AP module only Eligible Amounts GST paid on travel expenses including meals, short-term accommodation, airfare, taxi, etc. Actual GST paid per invoices (Xyntax Code C8R ) 6% (6/106 )rate on all amounts paid for travel allowances (Xyntax Code C8R ) Code 8 Travel Expense Rebate (Xyntax GST Code C8S ) Travel must relate to band-management activities Use for AP module only Used to recover (deemed content) GST on all travel expenses. Eligible Amounts GST paid on travel expenses including meals, short-term accommodation, airfare, taxi, etc. 5% (5/105) on deemed content (Simiplified method) (Xyntax Code C8S ) Code 1 - Regular GST Rebate (Amounts Paid in Error) (Xyntax GST Code C1R and C1E ) Used to recover GST on all products or services or where tax charged in error by vendor Must relate to band-management activities Use for AP and AR module Eligible Amounts Goods delivered to the reserve where the vendor charged the tax by mistake or because the proper documentation was not made available to the vendor. (Xyntax Code CD1 ) All services, whether provided on the reserve or off the reserve, such as car repairs, utilities for band property off reserve. (Xyntax Code CD1 ) NPO - Not for Profit Organization Rebate (Xyntax GST Code NPO ) 50% of any other GST paid that was not recovered by Code 8 or Code 1 rebates Available where at least 40% of total revenue is from government grants Must have supporting documentation to verify that the 40% revenue test is met Must relate to band-management activities Use for AP module only Eligible Amounts All other GST paid on expenses related to band-management activities, such as GST paid on goods purchased off reserve. (Xyntax Code NPO ) EXE - Exempt from GST (No GST paid or GST content included in expense) (Xyntax GST Code EXE ) Use for AP and AR module Xyntax Group Inc. assumes no responsibility or liability for any errors or inaccuracies that may appear in this documentation. These pages are for reference material only and are not intended for training purposes. Xyntax strongly recommends contacting a GST financial specialist who is experienced in First Nation finance for further clarification of GST rebates and coding. Xyntax makes no representation or guarantee as to the validity or accuracy of the material contained herein. Xyntax Product Documentation GST

5 GST/HST Technical Information Bulletin B-039R2 October 2005 GST/HST ADMINISTRATIVE POLICY APPLICATION OF THE GST/HST TO INDIANS This bulletin does not replace the law found in the Excise Tax Act (the Act ) and its Regulations. It is provided for your reference. As it may not completely address your particular operation, you may wish to refer to the Act or appropriate Regulation or contact any Canada Revenue Agency (CRA) tax services office for additional information. If you are located in the Province of Quebec, please contact Revenu Québec for additional information. Reference in this publication is made to supplies taxable at 7% (the rate of the goods and services tax/gst) or 15% (the rate of the harmonized sales tax/hst). The HST applies to supplies made in Nova Scotia, New Brunswick, and Newfoundland and Labrador (the participating provinces ). If you are uncertain as to whether a supply is made in a participating province, you may refer to GST/HST Technical Information Bulletin B-078, Place of Supply Rules Under the HST, available from any CRA tax services office. Note: This supersedes Technical Information Bulletin B-039R, dated November Table of contents Introduction... 2 Definitions... 2 Certificate of Indian Status card... 3 Supplies made to Indians, Indian bands and band-empowered entities... 4 Property... 4 Services... 5 Vendor documentation... 6 Off-reserve purchases of property delivered to a reserve... 7 Supplies provided by Indians, Indian bands and band-empowered entities... 8 Remote stores and other off-reserve stores... 9 La version française de ce bulletin s intitule Politique administrative sur la TPS/TVH Application de la TPS/TVH aux Indiens.

6 GST/HST Administrative Policy Application of GST/HST to Indians Introduction This bulletin summarizes the CRA s policy concerning the treatment of supplies made to, or by, Indians *, Indian bands and band-empowered entities under the goods and services tax/harmonized sales tax (GST/HST). The treatment of Indian purchases under the GST/HST is consistent with the Indian Act under which personal property of an Indian or an Indian band situated on a reserve and their interests in reserves or designated lands are not subject to tax. The information in this bulletin does not apply to taxes imposed by First Nations and administered by the CRA. Information on these taxes is available in the following CRA publications: First Nations Tax (FNT) (RC4072) First Nations Goods and Services Tax (FNGST) (RC4365) In addition the policy in this bulletin does not apply to First Nations that have signed final and/or selfgovernment agreements that include a provision that the tax relief under section 87 of the Indian Act is no longer applicable. These include the Tlicho First Nation in the Northwest Territories and those Yukon First Nations with final land claim agreements in place or Indians who are members of these First Nations. Information on how the GST/HST applies to First Nations and Indians in the Yukon may be found in CRA Notice 143R3, Application of GST/HST to Yukon First Nations and Yukon Indians. Definitions The following is a summary of terms used throughout this bulletin. A band-empowered entity is a corporation, board, council, association, society, or other organization that is owned or controlled by a band, a tribal council, or a group of bands other than a tribal council. This policy is applicable to those band-empowered entities that are situated on a reserve. A band-empowered entity is considered to be situated on a reserve when the entity maintains a presence on a reserve. An entity is considered to be owned by a band, a tribal council or a group of bands other than a tribal council if: the band, tribal council or group of bands owns all or substantially all of the shares or holds all or substantially all of the memberships of the entity; or the band, tribal council or group of bands holds title to the assets of the entity or controls its disposition, such that in the event of wind up or liquidation, these assets are vested in the band. An entity is considered to be controlled by a band, tribal council or group of bands if: the band, tribal council, group of bands or individual members of the band, tribal council or group of bands, appoint or elect a majority of the members of the governing body of the entity (e.g., directors); and the entity is required by legislation, by-laws, or an operating agreement, to submit to the band, tribal council or group of bands, its operating budget and where applicable, its capital budget for review and approval. * The Canada Revenue Agency (CRA) recognizes that many First Nations people in Canada prefer not to describe themselves as Indians. However, the term Indian is used in this publication because it has a legal meaning in the Indian Act. 2 GST/HST Technical Information Bulletin (October 2005)

7 GST/HST Administrative Policy Application of GST/HST to Indians Band management activities are activities or programs undertaken by a band or band-empowered entity that are not commercial activities for which they would otherwise be entitled to an input tax credit. In determining whether the acquisition of a supply is for band management, the output of the activity or program will be the determining factor, as opposed to the objectives of the activity or program. For example, a band s objective may be to provide employment and training to band members. To achieve this objective, the band may form a commercial enterprise which will provide on-the-job training and also create employment. Although the band s objective is to train persons, the output is a commercial activity for which there is an entitlement to input tax credits. As a result, supplies acquired for use in this band program are not considered to have been acquired for use in band management activities. An Indian is a person who is registered under the Indian Act. An Indian does not have to live or maintain a residence on a reserve. Such a person may be issued a Certificate of Indian Status card by the Department of Indian Affairs and Northern Development. An Indian band, for purposes of the GST/HST, includes both a band council and a tribal council. The band council is the primary unit of an Indian government. A tribal council is another level of Indian government. It is a grouping of bands with a common interest that have joined together to provide advisory or program services for two or more bands. Band council members compose the tribal council Board of Directors. Property means any property, whether real or personal, movable or immovable, tangible or intangible, corporeal or incorporeal, and includes a right or interest of any kind, a share and a chose in action, but does not include money. Real property includes in respect of property in the Province of Quebec, immovable property and every lease thereof, in respect of property in any other place in Canada, messuages, lands and tenements of every nature and description and every estate or interest in real property, whether legal or equitable, and a mobile home, a floating home and any leasehold or proprietary interest therein. A reserve means a reserve within the meaning of the Indian Act; that is, a tract of land which has been set apart for the use and benefit of a band within the meaning of the Indian Act, and equivalent lands under selfgovernment legislation, i.e. the Cree-Naskapi (of Quebec) Act and the Sechelt Indian Band Self-Government Act. Reserve also includes designated land, which, according to the Indian Act, is a tract of land whose legal title remains vested in Her Majesty and in which the band for whose use and benefit it was set apart as a reserve has, otherwise than absolutely, released or surrendered its rights or interests. The settlements affected by remission orders for Indians and bands on certain Indian settlements are also treated as reserves for the purposes of this policy. These remission orders cover a limited number of settlements in Canada for which a public commitment has been made by the Government of Canada to grant reserve status under the Indian Act. Information on these remission orders is available from CRA tax services offices. Certificate of Indian Status card An Indian must present proof of registration under the Indian Act to a vendor in order to acquire property or services on a reserve without paying the GST/HST. The CRA will accept as proof of registration under the Indian Act the Certificate of Indian Status card. GST/HST Technical Information Bulletin (October 2005) 3

8 GST/HST Administrative Policy Application of GST/HST to Indians The Certificate of Indian Status card is issued by the Department of Indian Affairs and Northern Development to eligible Indians. The cards display the Canadian maple leaf logo, followed immediately by the caption Indian and Northern Affairs Canada. They also bear a photograph of the individual. Further information on these cards, including samples, is available on the Indian and Northern Affairs Canada Web site at the following address: Note: An individual presenting any other membership or association type card, such as a Metis Association card, is not entitled to tax relief under this policy. Property Supplies made to Indians, Indian bands and band-empowered entities On a reserve Indians, Indian bands, or unincorporated band-empowered entities may acquire property on a reserve without paying the GST/HST, provided they have the appropriate documentation to show the vendor. Acquisitions of property on a reserve by non-indians will be subject to the normal GST/HST rules. Normally, corporations are considered to be separate legal persons from either an Indian or an Indian band and would not be eligible for relief from the GST/HST. However, the tax will not apply to incorporated bandempowered entities purchasing property for band management activities. Off reserve Indians, Indian bands and unincorporated band-empowered entities, as well as incorporated band-empowered entities purchasing for band management activities, may acquire property off a reserve without paying the GST/HST, provided they have the appropriate documentation to show the vendor; and the property is delivered to a reserve by the vendor or the vendor s agent. However, if the purchaser uses his or her own vehicle to transport the property to the reserve, the acquisition is subject to the normal GST/HST rules. Note: Delivery is not required if property is acquired off a reserve from a qualifying remote store. For information on remote stores, refer to page 9. Intangible personal property (IPP) As IPP is not a physical object, it cannot be delivered to a reserve. However, tax relief may apply if the IPP is situated on a reserve. IPP will be considered to be situated on a reserve where there are sufficient factors to connect the IPP to a reserve. For example, the purchase of a membership by an Indian to a golf course will be considered to be situated on a reserve where all rights in respect of the membership (i.e. rights to property or services) can be used or exercised exclusively on a reserve. As well, ticket acquired by an Indian off a reserve to attend a concert will also be considered situated on a reserve if the concert is held on a reserve. 4 GST/HST Technical Information Bulletin (October 2005)

9 GST/HST Administrative Policy Application of GST/HST to Indians Further, the supply of software over the Internet will be considered to be situated on a reserve where the Indian purchaser lives on a reserve and the software supplier establishes that the software is downloaded onto a computer located on a reserve. Memberships A membership comprises various rights to property or services, and therefore, is considered intangible personal property. Since it is intangible personal property and not a physical object that can be delivered to a reserve, the place where the membership can be used determines its tax status. For tax relief to apply, the rights provided by the membership must be exercisable exclusively on a reserve to be considered situated on a reserve. For example, where the rights to property or services in respect of a recreation centre membership can only be used or exercised exclusively on a reserve, that membership will be situated on a reserve. An Indian, an Indian band or a band-empowered entity may acquire an otherwise taxable membership on a taxrelieved basis. Leases, licences and similar arrangements For information on how the GST/HST applies to tangible personal property acquired by Indians, Indian bands and band-empowered entities of property by way of lease, licence or similar arrangements refer to Policy Statement P-230R, Application of the Excise Tax Act (ETA) to Leases, Licences and Similar Arrangements of Tangible Personal Property by Indians, Indian Bands and Band Empowered Entities. Importations Importations made by Indians, Indian bands or band-empowered entities are subject to the normal import rules. That is, importations are taxable at 7% or 15% unless they are specifically zero-rated. The GST/HST on imported goods is collected by the Canada Border Services Agency under the authority of the Customs Act at the time of importation. Importations of goods are subject to the GST/HST even in those instances where, after importation, the property is delivered to a reserve by the vendor s agent or by Canada Post. Services Individual Indians Services for property: If a service is performed totally on a reserve and the property is situated on a reserve at that time, the GST/HST will not apply. Note: A repair service performed on a vehicle off a reserve will be subject to tax. If the repair service involves the provision of parts (e.g., a new engine) and the parts are invoiced separately on the Indian purchaser s invoice, the parts will be relieved of tax if the vehicle with the installed parts is delivered to a reserve by the vendor or vendor s agent. Services for individuals: If the service is performed totally on a reserve for an Indian who is on a reserve at the time the service is performed (e.g., a haircut given on a reserve), the service will not be subject to the GST/HST. Individual Indians must pay the GST/HST on all taxable services that are not performed or occur totally on a reserve, unless the service is purchased for real property interests on a reserve or is a transportation service described below. Services are subject to the normal GST/HST rules when they are provided to non-indians on a reserve. GST/HST Technical Information Bulletin (October 2005) 5

10 GST/HST Administrative Policy Application of GST/HST to Indians Transportation services: The GST/HST will apply to these services, unless both the origin and the destination are on a reserve. For example, a taxi service operating within the boundaries of a reserve would not charge the GST/HST on the fare when the service is provided to an Indian. In addition, the GST/HST would not apply on a transportation service provided to an Indian from one reserve to another. Indian bands and band-empowered entities Services acquired on or off a reserve by an Indian band or band-empowered entity (incorporated or unincorporated) for band management activities or for real property on a reserve are not subject to the GST/HST. Exception: Indian bands and band-empowered entities will pay the GST/HST on off-reserve purchases of transportation, short-term accommodation, meals and entertainment. A rebate to recover the GST/HST paid on these purchases may be available where certain conditions are met. All services acquired by an Indian band or band-empowered entity for real property off a reserve are subject to the GST/HST (e.g., construction services acquired by an Indian band to build a friendship centre located off a reserve.) General rebate under code 8: An Indian band or a band-empowered entity may be entitled to recover the GST/HST paid on certain travel expenses (e.g., transportation, short-term accommodation, meals and entertainment expenses) incurred off-reserve by band employees or officials for band-management activities or for real property on a reserve. A rebate to recover the GST/HST paid on such eligible travel expenses may be claimed under code 8 of form GST189, General Application for Rebate of GST/HST. This form must be filed no later than two years after the GST/HST was paid. Examples of other eligible travel expenses include meeting rooms, rental of an automobile, and parking. They also include reimbursements or allowances paid by an Indian band or band-empowered entity to a band employee or official. A rebate is not available on reimbursements or allowances paid to band members for costs related to personal travel (e.g., medical or dental appointments). Other Rebate: Indian bands and band-empowered entities may be entitled to file the applicable Public Service Body Rebate on the remaining GST/HST that was paid and not refunded. Please note that band funding of First Nation non-profit organizations will be considered equivalent to government funding to qualify for the 50% GST/HST rebate to non-profit organizations. For more information, please see CRA guide RC4034, GST/HST Public Service Bodies Rebate Includes Form GST66. Vendor documentation Vendors must keep adequate evidence that sales for which no GST/HST was payable were made to Indians, Indian bands or band-empowered entities. Individual Indians When the purchaser is an individual Indian, vendors must maintain adequate evidence that a sale was made to an Indian, as registered under the Indian Act. The CRA will accept as adequate evidence, notation on the invoice or other sales document that is retained by the vendor, of the registry number or the band name and family number (commonly referred to as the band number/treaty number). 6 GST/HST Technical Information Bulletin (October 2005)

11 GST/HST Administrative Policy Application of GST/HST to Indians Indian bands and band-empowered entities When the purchaser is an Indian band or band-empowered entity, a certificate must be provided and retained by the vendor that the property is being acquired by an Indian band or band-empowered entity or that the services are being acquired for band management activities. Please refer to page 6 of this bulletin regarding the entitlement for tax relief on acquisitions by incorporated and unincorporated band-empowered entities. The certification should be similar in wording to the following: This is to certify that the property or service being acquired by [Insert the name of band or band-empowered entity] is for band-management activities (if applicable) or for real property on the reserve. This supply will not be subject to the goods and services tax/harmonized sales tax (GST/HST). Signature of Authorized Officer Date Title of Signing Officer Off-reserve purchases of property delivered to a reserve Along with the individual s Certificate of Indian Status card number or the certification by the Indian band or band-empowered entity, the vendor is required to maintain proof of delivery (e.g., waybill, postal receipt or freight bill), indicating the destination of the property to a reserve. Delivery If property is acquired from a vendor that is not located on a reserve, the property must be delivered to a reserve for the purchase to be relieved from the GST/HST. The property must be delivered by either the vendor or an agent of the vendor. If these conditions are not met, or if the vendor does not qualify as one of the remote stores described on page 9, the normal GST/HST rules apply. Vendor Where property is delivered to a reserve in the vendor s own vehicle, the vendor must maintain proof that delivery was made to a reserve. This will be indicated on the invoice issued by the vendor and the vendor s internal records (e.g., mileage logs or dispatch records). Such proof must be maintained in addition to the proof of Indian status or certification by an Indian band or band-empowered entity. Normal GST/HST rules will apply where an Indian, Indian band or band-empowered entity that is the purchaser takes possession of the property off a reserve and delivers the property to a reserve in his or her own vehicle. GST/HST Technical Information Bulletin (October 2005) 7

12 GST/HST Administrative Policy Application of GST/HST to Indians Vendor s agent Where the property is delivered by the vendor s agent to a reserve, the vendor must maintain: proof of Indian status or certification by the Indian band or band-empowered entity; and proof of delivery being made to the reserve (e.g., a waybill, postal receipt showing a reserve address). An agent of the vendor includes an individual or company under contract to the vendor for making deliveries (e.g., postal services, trains, boats or couriers). The vendor would normally bear all the risks of the agent during the course of the delivery as if these risks were the vendor s own, unless specifically covered in the agency agreement. A carrier who is under contract with the purchaser is not regarded as the agent of the vendor. In addition, undertakings by purchasers of property to deliver the property to themselves as agents of the vendor are not acceptable to the CRA. Supplies provided by Indians, Indian bands and band-empowered entities Businesses owned by Indians, Indian bands or band-empowered entities whose annual sales of property and services are more than $30,000, are required to register for the GST/HST. Like other businesses, once registered, they must collect and remit the tax on their sales of property and services (unless the sales are made to Indians, Indian bands or band-empowered entities under conditions where the GST/HST is not payable). They may also claim input tax credits for the GST/HST paid on purchases made in the course of their commercial activities. Businesses, whether owned by Indians or non-indians, selling property or services to Indians must include their taxable sales to Indians, even if no GST/HST was charged, in their calculation of annual revenue to determine if they must register for the GST/HST. Sales of taxable property and services that are relieved from tax when supplied to Indians, Indian bands or band-empowered entities under the circumstances described in this bulletin are still considered to be taxable sales for determining registration requirements. Sole proprietorships and partnerships owned by individual Indians receive the same treatment on purchases as individual Indians. If they are registered for the GST/HST, they, like all other businesses, must collect the GST/HST on their sales of taxable property and services (unless they are made to Indians, Indian bands or band-empowered entities under the conditions in which the GST/HST is not payable) and can recover any GST/HST they do pay on their off-reserve business purchases by claiming input tax credits. In the case of purchases made by partnerships, tax relief is available for purchases made in either the Indian purchaser s own name or the partnership name. Where a partnership has both Indian and non-indian participants, relief from the GST/HST will apply fully to the partnership. However, all conditions for the Indian or Indian band partner to receive tax relief on the acquisition must be met, i.e., property must be acquired on a reserve or delivered to a reserve and the proper documentation must be maintained. Partnerships with partners that are Indian bands or band-empowered entities are also afforded tax relief on purchases when acquired in either the name of the Indian band or the band-empowered entity or the partnership name. It is important to establish whether you are dealing with a partnership or a joint venture. GST/HST Policy Statement P-171R, Distinguishing Between a Joint Venture and a Partnership for the Purposes of the Section 273 Joint Venture Election, may be of assistance. 8 GST/HST Technical Information Bulletin (October 2005)

13 GST/HST Administrative Policy Application of GST/HST to Indians Where a joint venture election under section 273 of the Excise Tax Act is made and the operator is an Indian, Indian band or band-empowered entity, the operator will qualify for tax relief on property where the requirements in this TIB apply. An election as operator may be made provided the joint venture is involved in a commercial activity for the exploration or exploitation of mineral deposits or is a prescribed activity. For purposes of the Act, a trust is considered a separate person from its beneficiaries. Consequently, a trust is not an Indian or an Indian band and is not eligible for relief under this TIB. In addition, a trust does not qualify as a band-empowered entity as it cannot meet the owned or controlled criteria. However, a supply provided by a trust (e.g., an estate) to an Indian, an Indian band or a band-empowered entity (e.g., a beneficiary) may be eligible for relief under this TIB. Remote stores and other off-reserve stores Some vendors who are not located on a reserve may make a significant portion of their sales to Indians, Indian bands and band-empowered entities. In some instances, these vendors are in a remote location and their regular trading zone includes a reserve that is not in the immediate vicinity. In such cases, the requirement to deliver goods to a reserve in order for tax relief to apply may be difficult for the vendor to meet (e.g., prohibitive cost or a lack of means of transportation). In recognition of these unique circumstances, the CRA has developed a policy to enable vendors who meet certain conditions to provide point-of-sale tax relief to Indians, Indian bands and band-empowered entities on the acquisition of goods without the need to deliver those goods to a reserve. For detailed information please refer to the GST/HST Policy Statement P-246, Remote Stores and Other Off-reserve Stores with Significant Sales to Indians, Indian Bands and Band-empowered Entities. ENQUIRIES If you wish to make a technical enquiry on the GST/HST by telephone, please call one of the following toll-free numbers: (English service) (French service) General enquiries about the GST/HST should be directed to Business Enquiries at one of the following toll-free numbers: (English service) (French service) If you are in the Province of Quebec, please call the following toll-free number: (Revenu Québec) All GST/HST Technical Information Bulletins, as well as other publications, are available in the CRA Web site under the heading Technical Information under GST/HST. For information on Aboriginal peoples, visit GST/HST Technical Information Bulletin (October 2005) 9

14 GST Tracking # 1 GST Accounts Payable Report GST Accounts Payable Report This program will allow the operator to generate a report within specified invoice dates. Information displayed is supplier, invoice number, date and amount. It also includes the actual GST posted, calculated variance, the amount eligible for recovery, and net recovery. There is the option to select all categories of GST in one report, or to select categories on an individual basis. After selecting the GST codes: Select the starting and ending dates for the information that will be included. You have the option to pick the invoices by Invoice Date or Posting Date There is a choice to include voided invoices, the default is N (No). Select if invoices without calculated GST are to be included on the report, Choose if the variance amount is to be included in the Net Recovery column. The variance is the difference between the GST calculated by the system and GST posted. GST Tracking # 2 GST Accounts Payable Exceptions GST Accounts Payable Exceptions This report will show only invoices where the GST posted and the GST calculated amount differ. For example if you over or under pay a supplier GST, the system will display a variance in GST. The net amounts will also be displayed. After selecting the appropriate company, the following selections are available : Select all categories Select individual categories G/L category (GL account codes flagged for GST component) Upon selecting the GST codes: Select the starting and ending dates for the information that will be included. You have the option to pick the invoices by Invoice Date or Posting Date There is a choice to include voided invoices, the default is N (No). Specify the variance amount allowed for this report. Variances under this amount will not show on the report. Xyntax Product Documentation GST Tracking

15 GST Tracking # 3 GST Accounts Receivable Report GST Accounts Receivable Report This program will allow the user to print a report of GST Accounts Receivables. Enter company code There are two options available : - Select all categories - This will select all GST categories for the report. - Select individual categories - Will generate data on GST categories selected on an individual basis. Select the starting and ending dates for the information that will be included. You have the option to pick the invoices by Invoice Date or Posting Date There is a choice to include voided invoices, the default is N (No). Select if AR invoices without calculated GST are to be included on the report, Note: If the invoice category is Exempt (EXE) and has GST calculated, it will be included. GST Tracking # 20 Update Supplier File Update Supplier File This program allows the user to update the existing supplier file s GST. (Y) Yes - When (Y) is selected it indicates that GST is normally charged by this supplier, but the GST category does not remain consistent. Therefore, each time entering an invoice from this supplier, a prompt will appear with the available GST category codes, a code is then to be selected, for the appropriate rate of GST. (N) No - Indicates that this supplier never charges GST. At Invoice entry, the user will not be prompted to input GST amounts for this supplier. Category - Another option available is to enter a valid GST category. When inputting an invoice for this supplier, GST will automatically be calculated at the rate of the category code entered here. The user is able to edit this GST category and amount when entering an invoice, however the supplier will remain set to this code. Prompt Each Supplier - (Y/N) Not all suppliers are to be coded to the same GST category code, therefore there is an option to prompt each supplier as to wether they apply the to option selected above. If you select (Y) each supplier will appear, if you want this supplier to apply to the above category press <Enter> to accept, if not press (N). If you selected not to prompt each supplier, the above selection will apply to all suppliers. Note: Editing individual suppliers can be done in AP 99- #1 (Enter/Edit Supplier Codes) Xyntax Product Documentation GST Tracking

16 GST Tracking # 22 Change GST Category on Invoice Change GST Category on Invoice This program will allow you to change the GST category that has been previously assigned to the invoice. Even though you can change the GST category, you cannot edit the GST amount on the invoice. This is significant for invoices coded in the General Ledger where GST was charged but not recorded as per the GL account. - Choose company code - Enter supplier code, press F5 to search, or press F2 to switch to band member. The initial screen will display: Invoice number, date and due date. Any reference, gross amount, GST amount, any discounts, and the GST category. - Choose the line of the invoice in which you want to edit the GST Category. A blue window will now be displayed. The invoice gross amount, and GST amount will be shown, also will be the current GST category. To edit this invoice press F2. The GST categories available are displayed. Press F4 when you have made your selection. Across from GST category will be the original category, below will be the new category. Press <Enter> to fully update the new GST category. If you decide not to update press F4 and the changes will not be saved. GST Tracking # 23 Update Customer GST & PST Update Customer GST & PST This program will setup the GST and PST categories for Accounts Receivable. Once this program has been setup the system will not prompt and ask for GST or PST category codes when creating an invoice. Enter the GST category code which will apply, these are setup in GS # 51. Enter the PST category code (province code), which are setup in GS #52. There is the option to prompt each customer, or to automatically update all customers. If you select to prompt each customer, press <Enter> to accept these GST & PST categories, (N) No to reject this category, or F4 to exit. When you run this program again and select to prompt each customer, it will continue with customer following the last updated. Xyntax Product Documentation GST Tracking

17 GST Tracking # 50 GST Control File GST Control File This program must be initialized for each accounting company, prior to any others in the GST Tracking menu. This screen establishes the GST system defaults for this financial entity. It also maintains AR and AP system totals for reporting purposes. To begin enter the company number. Registration # - If you will be collecting or claiming input credits to receive the amount of GST paid, you must have a registration number beginning with R. Accounts Receivable Account - This is usually in the balance sheet as a liability where the GST collected will be posted. Accounts Payable Account - This account is also usually in the balance sheet, as a negative liability, where GST paid through A/P is maintained. Bank Account - Future Use Rebate Account - Future Use PST Collection Account - Enter the account where the PST collected through Accounts Receivable is posted. PST Paid Account - Enter the account number where PST paid through Accounts Payable is posted. GST/HST - Choose either <G> or <H>. <G> GST is calculated and stated separately from PST. <H> GST is harmonized with PST, GST includes both taxes. Report Required - <M> Monthly, <Q> Quarterly, or <A> Annually Business Number - Optional filed, when entering the business number be sure to enter it in the format requested. Accumulated Totals - These fields are system maintained. Xyntax Product Documentation GST Tracking

18 GST Tracking # 51 GST Categories & Rates GST Categories & Rates In this program the GST rebate codes and information pertaining to them are available. They are as follows: Code 8 - Travel Expense Rebate (Xyntax GST Code C8R ) (stated) Code 8 - Travel Expense Rebate ( Xyntax GST Code C8S ) (deemed) Code 1 - Regular GST Rebate ( Amounts paid in error) (Xyntax GST Code CD1 ) NPO - Not for profit organization rebate (Xyntax GST Code NPO ) EXE - Exempt from GST ( No GST paid or GST content included in expense) (Xyntax GST Code EXE ) To begin, enter the company code. Enter the category you wish to edit or F5 to search categories which are available. The following fields cannot be edited: Description - This will describe the GST rebate code. These descriptions come pre-setup with each GST code, however you can edit these descriptions if requried. Percentage - This is the percentage of GST charged or paid under this category. e.g. 6% Formula to Calculate GST - This will display the formula that calculates the GST. Press F2 to view an example. Rebate - Percentage of GST which is distributed within this category. Most GST is distributed at 100%, however there are certain rates in which GST is distributed at a reduced rate such as 50%. The following fields can be edited: A/R Sales, A/P Paid, GST Collected, GST Paid, GST Returned - These fields are system maintained. Default A/P Category - If this category will be the default accounts payable GST category choose (Y). One per company is required. Default A/R Category - Choose if this GST category code will be the default accounts receivable category. One per company is required. System Used - Enter whether this GST category will be used in accounts payable, accounts receivable, or both. GST Tracking # 52 PST Categories & Rates PST Categories & Rates PST Categories are recorded as Provincial Codes (e.g. BC, AB, SK, MB, ON). In this program PST categories, rates and information pertaining to them is displayed. After entering a valid Company code: Insert a valid category code, type LIST, or press F1 for next category code. Description - This is a description of the PST category codes selected. E.g.Category code AB - Description Alberta Percentage - This is the percentage of PST charged or paid under this category. E.g. 7% Remittance - Percentage of PST available for recovery. A/R Sales, PST Collected, A/P Paid Out, PST Paid - System maintained, totals will accumulate when PST category is used. Default Category - Choose if this PST category code will be the default category for PST in this company. Xyntax Product Documentation GST Tracking

19 GST Tracking # 53 Copy GST/PST to New Company Copy GST/PST setup to New Company This program transfers the GST control file (GS # 50) the GST category file (GS #51), and if applicable the PST category file, (GS #52) from one company to another. The totals will not be transferred. Other information such as GST registration number, and A/R, A/P default accounts will be transferred and may need manual adjustment after transfer. If the company has been previously setup for GST, the transfer is not permitted. Take into consideration when transferring GST files, that the other company s accounts should be setup up the same as the files that are to be transferred. If the accounts are not the same you can still transfer the files, and edit the accounts (GS #50) once the transfer is complete. Xyntax Product Documentation GST Tracking

20 GST Tracking # 90 Period End Processing and Reports Period End This program you will process the GST period end report and update the GST totals. The system will also ask if you wish the invoices on the report to be marked as reconcilied. Reconcilied invoices will not show on subsequest reporting periods. Therefore if an invoice is posted into a period previously reconciled, it will be identified in the next reporting period. When the control file was setup the period of reporting was selected. Reporting period options - (M) monthly (Q) quarterly (A) annually. After choosing the reporting period, all companies which have this reporting period will be displayed. Select the companies you wish included in the report. - Choose your start and end dates for this GST update. - Choose if you wish to mark the invoice in this report as reconciled. If you have chosen to include more than one company there is an option to have separate reports, or to combine them all in to one report. When you have chosen your printer, you will be asked to type YES if you wish to clear the GST Period Totals for companies included within this report back to zero, alternatively press F4 for the menu, and the totals will remain. GST Yearly Reporting and Update GST Tracking # 91 GST Yearly Reporting This program reprints all or selected GST categories based on a date range. All invoices posting within the date range and GST category selected will be included in the report. The invoice GST reconcilation period will also be shown on the report. NOTE: Missing dates indicates that the invoice was NOT included in any period end processing and report. Select the company for reporting. Select the date range for the report. (e.g April 1 - March 31) You are given the opportunity to reset the YTD Totals in the GST module. Type YES if you want the GST totals to be cleared OR press F4 to print the report without the update being completed, and you will return to the GST tracking menu. Important: You will not be able to clear the YTD Totals untill all Period End Processing and Reporting has been completed up to and including the End date of the reporting period requesting in this program. Xyntax Product Documentation GST Tracking