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What is GST/HST TAX?

GST/HST is a tax that applies on most supplies of goods and services made in Canada.

The GST rate is 5% across Canada and the HST rate varies from province to province.
As of July 01, 2010, much of Canada has now harmonized their provincial sales tax with GST to create the harmonized sales tax (HST).  This rate is 13% in Newfoundland, New Brunswick and Ontario, 15% in Nova Scotia.

HST registrants who make taxable supplies (other than zero-rated supplies) in one of these participating provinces collect tax at the provincial HST rate. Registrants collect tax at the 5% GST rate on taxable supplies made in the rest of Canada (other than zero-rated supplies).

Who pays GST/HST?
Almost everyone has to pay GST/HST on purchases of taxable supplies of goods and services (other than zero-rated supplies). However, Indians and some groups and organizations, such as many provincial and territorial governments, do not always pay GST/HST on their purchases.

Who charges GST/HST?
Generally, GST/HST registrants have to collect GST/HST on all taxable (other than zero-rated) supplies of goods and services they provide to their customers. However, there are some exceptions for sales of taxable real property.

Taxable goods and services
Most goods and services you supply in or import into Canada are subject to GST/HST at varying rates or are zero-rated.
Examples of goods and services for which you charge and collect GST or HST include:

  • commercial real property and newly built residential real property;
  • rentals of commercial real property;
  • sales and leases of automobiles;
  • gasoline;
  • car repairs;
  • soft drinks, candies, and potato chips;
  • clothing and footwear;
  • advertising (unless provided to a non-resident of Canada who is not registered for GST/HST);
  • taxi and limousine fares;
  • legal and accounting fees;
  • franchise fees;
  • hotel accommodation; and
  • barber and hairstylist services.

Examples of goods and services taxable at 0% (zero-rated) include:

  • basic groceries such as milk, bread, and vegetables;
  • agricultural products such as grain, raw wool, and dried tobacco leaves;
  • most farm livestock;
  • most fishery products such as fish for human consumption;
  • prescription drugs and drug-dispensing fees;
  • medical devices such as hearing aids and artificial teeth;
  • exports (most goods and services for which you charge and collect GST/HST in Canada, are zero-rated when exported);
  • many transportation services where the origin or destination is outside Canada;
  • any supply of property or a service that is for the use of the Governor General.

Exempt goods and services

A small number of goods and services are exempt from GST/HST-that is, no GST/HST applies to them. This means that you do not charge your customers GST/HST on your supplies of goods and services, and you do not claim input tax credits (ITCs).
Examples of exempt goods and services include:

  • used residential housing;
  • long-term residential accommodation (of one month or more), and residential condominium fees;
  • most health, medical, and dental services performed by licensed physicians or dentists for medical reasons;
  • child-care services (day-care services provided usually for less than 24 hours a day) provided primarily to children 14 years old and younger;
  • bridge, road, and ferry tolls (ferry tolls are zero-rated if the ferry service is to or from a place outside Canada);
  • legal aid services;
  • many educational services such as courses supplied by a vocational school leading to a certificate or a diploma which allows the practice of a trade or a vocation, or tutoring services made to an individual in a course that follows a curriculum designated by a school authority;
  • music lessons;
  • most services provided by financial institutions such as arrangements for a loan or mortgage;
  • arranging for and issuing insurance policies by insurance companies, agents, and brokers;
  • most goods and services provided by charities; and
  • certain goods and services provided by non-profit organizations, governments, and other public service bodies such as municipal transit services and standard residential services such as water distribution.

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