As of July 1, 2010, the Provincial Sales Tax (PST) and the federal Goods and Services Tax (GST) were combined to form a Harmonized Sales Tax (HST). In general, the HST applies in the same manner as the GST, but with a different rebate structure.
This website provides information on the HST including when to charge the tax on sales and what to expect in terms of rebates. Should you have any questions concerning the HST, please forward them to hst_committee@carleton.ca.
How does the HST work?
Purchase of Goods and Services
The majority of goods and services, such as office supplies, furniture, research equipment, conference registration, and professional services, include both federal (5%) and provincial (8%) components for a total rate of 13% HST; however, the University receives a rebate of 73.769% on the combined tax amount.
Example
$100 + 13% HST = $113.00 minus federal/ provincial rebates = $103.41
Note: If the unit/project has been set up to receive an input tax credit, the total amount of the tax will be rebated.
Sale of Goods and Services
The HST is applied to all goods and services, with a few exceptions. To determine if the sale is taxable, find the good or service in the tax status chart. When issuing an invoice for a taxable good or service, the sales invoice must show:
- the amount of tax being charged,
- the rate of HST/GST used in the calculation, and
- the University’s HST tax registration number
If you need to issue a refund, the sales tax must be calculated at the same rate that was charged when the original invoice was issued.
Sales to Third Parties Outside of Ontario
With the adoption of the HST in July, 2010, new “place of supply” rules were introduced by Revenue Canada that make it necessary to charge tax based on where the product or service is being consumed.
Therefore, when selling goods or services that will be delivered outside of Ontario, the appropriate taxes must be included on the invoice as follows:
- If the good or service is delivered to an HST-participating province, HST is applied as outlined below in place of the Ontario HST rate.
| Nova Scotia | 15% |
| New Brunswick | 15% |
| Newfoundland | 15% |
| PEI | 15% |
- If the good or service is delivered to a GST province (non-HST-participating province), only GST is charged at 5%. The assessment of the provincial taxes is the responsibility of the receiving party.
HST Exemptions
The HST does not apply to the following sales:
- Goods or services exported outside of Canada
- Sales made for nominal* consideration (direct cost recovery).
- Any goods that receive a point-of-sale rebate on the provincial component of the HST should only have the federal (GST) portion of 5% applied. This includes:
- Print (newspapers)
- Books (includes audio books)
- Prepared meals less than $4
- Children’s clothing
- Feminine hygiene products
*Nominal refers to an amount less than or equal to the direct cost of the goods/services purchased less the HST rebate, without any allocation for overhead, salaries, etc. In such cases, sufficient documentation must be retained to support the omission of taxes.
HST is applied to all goods and services, with a few exceptions.To determine if the sale is taxable, find the good or service in the tax status chart.
The sales invoice must show:
othe tax charged
othe rate of HST/GST used
othe university’s HST tax registration number
When issuing a refund, sales tax is to be calculated at the same rate that was charged when the original supply was invoiced. ** Please note:no PST adjustments may be done after October 31, 2010.
Sales to Third Parties Outside of Ontario
Effective July 1, 2010, Ontario and British Columbia joined the Maritime Provinces in adopting a single value-added Harmonized Sales Tax (HST) which contains both a federal and provincial portion.
Additionally, new “place of supply” rules were introduced by Revenue Canada that make it necessary to charge tax based on where the product or service is being consumed.
Therefore, when making a sale on a good/service delivered outside of Ontario, the appropriate taxes must be included on the invoice as follows:
·If the good or service is delivered to an HST-participating province, HST is applied as per chart. No additional federal or provincial tax is applicable.
|
Ontario |
13% |
|
British Columbia |
12% |
|
Nova Scotia* |
15% |
|
New Brunswick |
13% |
|
Newfoundland & Labrador |
13% |
*increased from 13%, effective July 1, 2010
·If the good or service is delivered to a GST province (non-HST-participating province), GST is charged at 5%.No provincial taxes are assessed, but rather the purchaser should self-assess when required.