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Canada GST | GST

Canada GST is applicable in Canada.

Canada has a federal government (like in India) and a federal GST was introduced in 1991 replacing the existing federal sales tax imposed on manufacturers and certain licensed wholesalers at a general rate of 13.5%. However, all provinces continued with the provincial retail sales tax (‘PST’) thereby having two levels of levy. The harmonized sales tax (HST) is imposed in provinces that have harmonized their provincial sales tax with the GST (New Brunswick, Nova Scotia, Newfoundland and Labrador, Ontario, Prince Edward Island) and is a combination of a federal component and a provincial component (i.e., 5 percent to 8 percent) applicable generally on same base of property and services as the GST. In the remaining provinces, GST is imposed on taxable goods and services along with provincial sales tax or a retail sales tax. The three territorities (Northwest Territorities, Nunavut and Yukon and Province of Alberta charge GST at the rate of 5%.

Most goods and services supplied in or imported into Canada are taxable supplies and are subject to GST at the rate of 5% or HST in the range of 13% to 15% (federal component of 5% and provincial component of 8 to 10%) with certain exceptions based on policy decisions such as:

  • Exports and supplies of goods and services relating to basic needs of individuals such as drugs and biologicals, medical and assistive devices, basic groceries, agriculture and fishing, transportation and travel etc. are taxed at the rate of 0% (zero-rated) 6 .
  • Supplies of goods and services supporting public needs such as certain real property, healthcare, educational, child and personal care, legal aid, public sector bodies, financial services, ferry/road/bridge tolls etc. are exempted from GST/HST

The three territories of Canada (Yukon, Northwest Territories and Nunavut) do not have territorial sales taxes. The government of Quebec administers both the federal GST and the provincial Quebec Sales Tax (QST). It is the only province to administer the federal tax.

Professionals, tax consultants, accountants can use the below links to be updated on Goods and Services Tax

 

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