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Key Fuel Programs – Native Fuel Program
The Indian Act (Canada) provides exemption from British Columbia motor fuel taxes on fuel purchased on or delivered to a reserve for the personal use of a status Indian or Indian band.
In order to reduce the impact on cash flow for retailers, the Native Fuel Program authorizes retailers to purchase a percentage of their fuel from a wholesaler at a price that does not include an amount equal to the tax. The retailer therefore does not need to apply for a refund when selling fuel tax-exempt for the personal use of status Indians or Indian bands on reserve lands.
To qualify for this program, at least 10% of the fuel retailer's business must be sales of tax-exempt fuel. This includes sales to status Indians, Indian bands, and bona fide farmers.
Because the retailer does not pay an amount equal to the tax on all their fuel, they must be appointed as fuel collectors and file monthly tax returns. The tax return reconciles the actual volume of fuel the retailer sold exempt, with the volume of fuel purchased from the wholesaler without paying an amount equal to the tax.
Please see:
Additional information about tax-exempt sales of fuel to status Indians is also provided in:
- Bulletin MFT 002, Fuel Retail Dealers Operating on Reserve Land
- Bulletin MFT 006, Fuel Retail Dealers Located Off Reserve Tax-Exempt Sales of Fuel to Native Indians
Please contact us at 250-356-1399 with any questions or for more information about the Native Fuel Program.
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