By FAX ( ) -
Subject: Tax-free
status of provincial government purchases
The Government of
British Columbia is not subject to the federal Goods and Services Tax
on any purchases that are billed directly to the government or purchased
with a credit card that is billed directly to the government. Purchases
made with MasterCard number ______________ meet this criteria.
The federal government
has provided the province with a tax-free Certification Clause, to be
provided to government suppliers, as their authority not to charge GST
to the province. The Certification Clause reads as follows:
THIS IS TO CERTIFY
THAT THE PROPERTY AND/OR SERVICES ORDERED/PURCHASED HEREBY ARE FOR
THE USE OF, AND ARE BEING PURCHASED BY, THE MINISTRY OF _________________
WITH CROWN FUNDS, AND ARE THEREFORE NOT SUBJECT TO THE GOODS AND SERVICES
TAX.
Normally, this certification
would be stamped onto or included in the terms of purchasing or contractual
documents. However, minor purchases made with this MasterCard might
not involve separate purchasing requisitions or contractual arrangements.
Even though you
do not charge GST to the province on its direct purchases, you can still
claim input tax credits for GST paid by you in making a supply of NORMALLY
TAXABLE goods or services to the province. The impact of this policy
is that purchases made by the province and agencies using the certificate
are effectively zero rated.
Please keep this
letter on file, as your authority not to charge GST on purchases made
by the province, using this MasterCard where no purchase order or contractual
document is involved. Revenue Canada has requested that your invoices
to the province make reference to the tax-free authorization letter
you have on file.
If you have questions
in regard to this letter, please contact me at (250) ___-____.
Yours truly,
(SFO)
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