GST/HST – taxable supplies

Most tangible properties (Goods) and services purchased in Canada or imported into Canada are taxable, and the buyer has to pay GST/HST. The seller of goods and services collects GST/HST from the buyer, and the seller remits the collected amount to the Canada Revenue Agency.

The tangible properties and services are categorized as taxable supplies, exempt supplies, and zero-rated supplies for GST/HST purposes.

The threshold for registering for GST/HST CRA program account is $30,000.00 annual revenue from taxable supplies, including zero-rated supplies.

Exempt supplies

• Residential housing
• Residential accommodation for a month or more
• Condominium fees for residential
• Medical, and dental services
• Children Day-care services for children up to 14 years age, provided the services are for less than a day
• Tolls for bridges, roads, and ferries (407 ETR)
• Legal aid services
• Educational services
• Tutoring services for a student who takes a course approved for credit by a school or the service follows a curriculum designated by the school
• Music lessons
• Most financial charges levied by banks, financial institutions, agents, and brokers
• Insurance (comes under financial services)
• Goods and services provided by charities

Zero-Rated supplies

• Groceries
• Prescription drugs
• Most agricultural products and farm livestock
• Medical devices, such as hearing aids and artificial teeth
• Feminine hygiene products such as sanitary napkins, tampons, sanitary belts, menstrual cups or other similar products
• Exports
• International transportation services

If your goods and services are exempt from GST/HST or zero-rated, you do need to register for GST/HST even though your total gross receipts exceed the threshold. If your goods and services are taxable or zero-rated for GST/HST and if you have not exceeded the threshold, you may still register for GST/HST voluntarily.

If your goods and services are exempt from GST/HST, you can not claim an input tax credit (ITC). If your goods and services are taxable or zero-rated, you can claim input tax credit (ITC).

Input tax credit (ITC) is the amount of GST/HST that you have paid on your purchases and expenses. Input tax credit (ITC) reduces your total GST/HST liability, payable to the Canada Revenue Agency.