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ARCHIVED ISSUES - NOVEMBER 2009


 

WHAT IS HST AND HOW WILL IT AFFECT YOU?

The Campbell goverment has recently announced that a combined HST (Harmonized Sales Tax) of 12% will be implemented July 2010, replacing 7% PST & 5% GST.

What is HST?
The HST is composed of the GST and the 7% provincial tax and applies to the same base of goods and services that are taxable under GST. HST follows the same general rules as GST. GST/HST registrants continue to collect GST on taxable supplies (other than zero-rated supplies) of goods and services made in Canada outside the participating provinces. On supplies made in the participating provinces, they collect HST. All GST registrants are automatically registered for HST.

How will it affect GST/HST registrants?
Businesses which are registered to collect GST or HST can claim input tax credits to recover all of the GST or HST that they have paid.  The change to HST may benefit GST/HST registrants in BC, because:

  • They will no longer have to pay PST
  • They will no longer have to prepare PST remittances
  • They will save on consulting costs - the PST rules are very complicated, and frequently require professional advice in their interpretation
  • Employees will spend much less time trying to find the answers to PST questions
  • PST audits will be eliminated

How will it affect consumers?
Consumers will now have to pay 12% HST on some items on which they only paid 5% GST. But, several items which are currently PST exempt will not be subject to the provincial portion of the HST.  These items are:

  • gasoline and diesel fuel for motor vehicles
  • books
  • children's-sized clothing and footwear
  • children's car seats and car booster seats
  • diapers and feminine hygiene products

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NALH Business Solutions Ltd.
#112 - 8988 Fraserton Court
Burnaby, BC V5J 5H8
(604) 412-3885

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