Allegations that employees at a First Nation-owned gas station north of Winnipeg are offering non-Indigenous customers tax-free cigarettes and gas have some members of Roseau River Anishinabe First Nation concerned.

The Red Sun Gas Bar is located on Highway 6, north of the Perimeter Highway, on Roseau River Anishinabe First Nation land.

"We're receiving reports that non-status people are receiving tax exemption on smokes and gas here at Red Sun," said RRAFN band Councillor Cecil James.

The Red Sun Gas Bar is located on Highway 6, north of the Perimeter Highway, on Roseau River Anishinabe First Nation land. (Lyza Sale/CBC)

A photo provided to CBC shows a list a of treaty status numbers near the store's cash registers. It's alleged employees offer non-Indigenous customers tax-free gas or tobacco purchases and use one of the status numbers for the transaction.

James said he's worried what could happen if these allegations are true.

"Granting tax-exempt status, using status numbers to grant that status to non-Aboriginal people puts my community in a precarious position," he said.

"I'm kind of worried that Manitoba Finance is going to come and shut us down," James said.

David Doer, the brother of former Manitoba premier Gary Doer, is the manager of the Red Sun Gas Bar.

"Me, personally, and my son … who's managing day-to-day, we're absolutely totally against this," Doer said.

Doer admits there have been past instances where employees gave preferred customers or friends the treaty tax deduction. He said three people have been fired in the last year because of it.

"We've gone as far as having our staff members sign an agreement that if they do sales to non-Aboriginal people and don't charge the taxes, they will be disciplined and fired," Doer said.

Red Sun manager David Doer admits there have been instances where employees gave preferred customers or friends the treaty tax deduction, and three people have been fired in the last year because of it. (CBC) Doer said 83 per cent of his customers are treaty status card holders. He's not sure how that compares to other First Nations-run gas stations near the city. But Doer said he asked Manitoba's taxation division for a voluntary audit of the gas bar's sales.

A group of RRAFN members also take exception to a new agreement signed in July between the community's leadership and Doer.

The original 2007 agreement had Doer paying rent starting at $24,000 per year and increasing every five years over a 20-year period to a maximum of $27,783.

Under the new agreement, Doer only pays $10 a year in rent.

"That's, like, 83 cents a month," band member Rachel Seenie said.

"Think about that. That is just a bad deal," she said. "Eighty-three cents isn't even enough for a cup of coffee."

The new agreement also has the gas bar's tobacco tax rebate split evenly between Doer and RRAFN. Band member Max Seenie says Doer's portion of the rebate should go to the First Nation.

"That's, like, 20 million [dollars] in 20 years that's going to a non-status member. I'd like to see that change. We need to ask our people if we want that or not and I believe a referendum is one solution," he said.

Roseau River band members Max Seenie and Rachel Seenie want to see 100 per cent of the Red Sun Gas Bar tax rebate to go to the First Nation. (Lyza Sale/CBC) The Seenies said ownership and management needs to be handed over to RRAFN. Max Seenie said that extra money could go toward addressing RRAFN's housing issues.

Doer said the rent was dropped to $10 a year because he's taken over services the band used to provide and he covers all overhead costs.

Doer also said he donates 10 per cent of his portion back into the Red Sun Community Activity Account, which provides support for community initiatives.

"The band gets their rebate free and clear. No investment. They don't pay heat, light, power, anything. They don't pay the sewer pickup. They don't pay the water. We cover 100 per cent of the operating cost, 100 per cent of the payroll," Doer said.

'Granting tax-exempt status, using status numbers to grant that status to non-Aboriginal people puts my community in a precarious position,' said RRAFN Councillor Cecil James. (Lyza Sale/CBC) Councillor Cecil James wants Indian and Northern Affairs to investigate.

"In order for reserve land to be used by third parties for commercial and industrial purposes, a 'designation' is required which entails a majority vote by the First Nation's membership in favour of the proposed use," INAC said in a statement.

"A community process for a designation vote is currently underway at Roseau River Anishinabe First Nation and we are respecting that process," the statement said.

INAC also said it takes claims of status cards being used by non-indigenous customers seriously, but said it has not received a formal allegation about Red Sun so far.

"The department is reviewing the information which has been made public and will determine next steps," INAC's statement said.

The province is aware of the claims made surrounding the Red Sun Gas Bar, but said it is unable to comment about specific investigations or if one will take place.

CBC has asked Canada Revenue Agency for comment.