1. Money
You can opt-out at any time. Please refer to our privacy policy for contact information.




Calculating GST/HST Returns

Image (c) Erik Palmer / Getty Images


GST stands for Goods and Services Tax.

The GST is "a 5% tax on the supply of most goods and services in Canada" (Canada Revenue Agency).

As a consumer, you pay the GST on all taxable goods and services, except zero-rated and exempt goods and services; as a business, you charge GST on all taxable goods and services.

There are always exceptions. Provincial and territorial governments and Aboriginal people do not always have to pay GST; businesses that are deemed to be Small Suppliers by the Canada Revenue Agency (CRA) do not have to charge GST.

A GST Small Supplier is defined as a sole proprietor, partnership or corporation whose total taxable revenues before expenses are $30,000 or less in the last four consecutive calendar quarters or a public service body (such as a non-profit organization) that has total taxable revenues of $50,000 or less in the last four consecutive calendar quarters.

Some businesses, however, are not allowed to claim Small Supplier status; taxi and limousine operators, for instance, must register for GST/HST no matter how small their annual income.

In Newfoundland and Labrador, New Brunswick and Nova Scotia, PEI and Ontario, the GST is combined with the PST (Provincial Sales Tax) to create the HST (Harmonized Sales Tax). See Invoicing for current GST/PST/HST rates for all provinces and territories.

If you do not qualify as a Small Supplier and provide taxable goods or services, you will need to charge, collect and remit the Goods and Services Tax. The basic process is to register for a GST/HST account with the Canada Revenue Agency, keep track of the GST/HST that you collect and/or pay, and complete and file a GST/HST tax form every quarter.

You can claim an Input Tax Credit (ITC) for the GST/HST that you pay or owe "on purchases and expenses you use, consume, or supply in your commercial activities" (CRA).


Also Known As: Goods and Services Tax.

Common Misspellings: Goods and Servises Tax.

Examples: Basic groceries, such as milk and vegetables, are examples of GST zero-rated goods.

©2014 About.com. All rights reserved.