Harmonized Sales Tax is a value-added tax applied to the supply of most goods and services in Canada and it is composed of a combination of the 5% Federal Goods and Services Tax (GST) and the provincial tax rate (PST).
This website provides information on the HST including what rebates to expect and when to charge the tax on the sale of goods and services. Should you have any questions concerning the HST, please forward them to hstcommittee@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
- This means the amount of HST paid, after rebates, is 3.41%.
- Note: If the unit/project has been set up to receive an input tax credit, the total amount of the tax will be rebated.
Where necessary, HST will be self-assessed on goods or services provided by an international vendor. Purchase Orders are set up to include 13% HST, even if tax is not included on the vendor’s quote. When the invoices are ready to be paid, Accounts Payable will ensure the correct taxes are being recorded and any subsequent rebate is applied.
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. Unless specifically approved by Financial Services, all invoices must be issued through General Accounts Receivable (GAR) to ensure that the invoice meets Canada Revenue Agency (CRA) invoice requirements.
Sales to Third Parties in a Province other than Ontario
Harmonized Sales Tax is composed of a combination of the 5% Federal Goods and Services Tax (GST) and the provincial tax rate (PST). Only Ontario and the Maritime provinces (ON, NB, NS, PEI, NFLD) are registered HST provinces. All other provinces (BC, AB, SK, MN, PQ) use a separate tax base for the 5% Federal GST and the provincial tax component, which is different in each province.
The Canada Revenue Agency’s “place of supply” rules require that tax is charged based on where the product or service is being consumed.
Therefore, when selling goods or services that will be delivered to a province other than 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.
- 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.
| Tax Rate | ||
| Location of End User | HST | GST |
| Alberta | – | 5% |
| British Columbia | – | 5% |
| Manitoba | – | 5% |
| New Brunswick | 15% | – |
| Newfoundland & Labrador | 15% | – |
| Nova Scotia | 15% | – |
| Northwest Territories | – | 5% |
| Nunavut | – | 5% |
| Ontario | 13% | – |
| Prince Edward Island | 15% | – |
| Quebec | – | 5% |
| Saskatchewan | – | 5% |
| Yukon | – | 5% |
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
- Goods and services supplied by Carleton University that are directly related to our primary purpose (i.e. application fees, tuition for credit, and long-term and continuous occupancy in residence)
*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. All invoices should be created by General Accounts Receivable (GAR). Please consult hstcommittee@carleton.ca if you plan to charge a third party for direct cost recovery.
Internal Service Providers
Internal Service Providers (ie. Carleton departments that sell goods or services to other Carleton departments) should not be assessing HST when billing internally.
Sometimes groups that are related to Carleton, but that are separate entities* (e.g. Carleton University Students’ Association) are granted permission to use the university’s internal processes and systems (such as eShop) to obtain goods and services from Internal Service Providers. In these cases, HST should be applied to the payment, unless it’s a direct cost recovery (as described above).
*If the fund/index begins with an “8”, the good or service is being charged to a funds in trust account, meaning the entity is not part of Carleton University.
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.