Many companies and organizations operating in Canada overpay millions of dollars in Commodity Taxes annually. Most of the goods imported into Canada are subject to GST/HST taxes, and it is the importer’s responsibility to be aware of and abide by the GST/HST requirements. Transmanna team provides a premium. Commodity Tax Recovery to Canadian companies and organizations. We can help you in identification, quantification and verification of potential GST/HST recovery opportunities. Your staff file the GST/HST returns, but the complex GST/HST rebate process is rarely completed effectively. Transmanna can recover you overpaid money in the form of GST/HST that were overlooked by bookkeepers and accountants.
WHAT CAN WE DO FOR YOU ?
Transmanna can help your company establish an efficient and correct GST/HST process that meets legal obligations. We can provide
- Assessment of your accounting data for GST/HST.
- Preparation of a detailed report of our findings.
- Preparation and processing of all refund claims.
- Our continuous support for proper management of your commodity.
What is GST/HST Tax System?
While the consumer pays the tax, businesses are responsible for collecting and remitting it to the government. Businesses collect the GST or HST on most of their sales and pay GST or HST on most purchases they make to operate their business. They can then claim an input tax credit, to recover the GST or HST paid or payable on supplies and services they bought to use in their business. All Canadian GST/HST registered businesses are required by law to file GST or HST tax returns, and to:
- Collect GST/HST
- Keep track of the GST/HST they paid
- Submit any resulting net tax owing to the federal government
The GST is calculated on the Canadian dollar value of the goods, including duty and excise tax. The owner or importer of record is responsible for paying the GST on imported goods. If you are registered for the GST/HST and you are the importer (the person who caused the goods to be imported into Canada), you may claim an input tax credit (ITC) for the tax you paid on the imported goods, as long as you meet the requirement for claiming ITCs. When you invoice your customer for the goods – GST/HST must be applied to the sale price. You must use the rate based on the “place of supply rules”. At the end of the accounting period assigned or requested, an Input Tax Credit (ITC) is fi led. This is the difference of all GST/HST paid against all GST/HST billed during that time period. The difference if positive is a refund – the Canada Revenue Agency (CRA) will send a cheque. If negative, you must send CRA a cheque. You must use the rate based on the “place of supply rules”. Generally, a GST registrant who sells goods which are delivered to a participating province must collect the HST, at the rate in effect in the province to which the goods are delivered. A registrant in a participating province who sells goods which are delivered to a non-participating province would collect GST, not HST. At the end of the accounting period assigned or requested, an Input Tax Credit (ITC) is fi led. This is the difference of all GST/HST paid against all GST/HST billed during that time period. The difference if positive is a refund – the Canada Revenue Agency (CRA) will send a cheque. If negative, you must send CRA a cheque
If the business has paid more GST or HST than it collected, the federal government will refund the difference to them. The Goods and Services Tax, or GST, is a tax that applies to most property and services in Canada. The provinces of Ontario, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador have harmonized their provincial sales tax with the GST to create the Harmonized Sales Tax (HST). Generally, the HST applies to the same property and services as the GST. The 13% HST took effect in Ontario in 2010, replacing the GST and the Provincial Sales Tax (PST). Most goods imported into Canada are subject to the federal GST at the rate of 5% of the duty-paid value of the shipment. This tax must be paid at time of entry and is collected at the border, unless the goods are going directly to a bonded warehouse. In this case, the GST is collected when the goods leave the warehouse and become eligible for sale in Canada. On most commercial imports, however, only the federal (GST) portion of the HST is applied to the sale.
What is Exempt From HST ?
The HST applies to almost all goods and services. However, a limited number of sales or supplies are exempt from HST. In Ontario, HST is not charged on the following items:
- Basic groceries
- Prescription drugs
- Some medical devices
- Municipal public transit
- Health and education services
- Most financial services
- Residential rents
- Music lessons
- Legal aid
- Child care
Besides this, consumers are not required to pay the 8% Ontario portion of the HST for:
- Books (including audio books)
- Feminine hygiene products
- Qualified prepared food and beverages sold for a total of $4 and under
- Print newspapers
- Children’s clothing and footwear
- Children’s car seats and car booster seats
|Canada’s Province||Rate type (HST, GST, PST)||Provincial Rate||Canada Rate||Total|
|Newfoundland and Labrador||HST||10%||5%||15%|
|Prince Edward Island (PEI)||HST||10%||5%||15%|
|Québec||GST + QST||9.975%||5%||14.97%|
|Saskatchewan||GST + PST||6%||5%||11%|
|Saskatchewan||GST + PST||5%||5%||10%|