Basic information on the GST/HST

Basic information on how GST/HST works, what we mean by taxable, zero-rated, and exempt supplies.

Video series: GST/HST Information for a New Small Business

Segment 2: What is the GST and HST?

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What is the GST/HST?

The goods and services tax (GST) is a tax that applies to the supply of most goods and services in Canada. These goods and services also include real property and intangible personal property. For more information, see What supplies does the GST/HST apply to?

Generally, the harmonized sales tax (HST) applies to the same base of property and services as the GST. HST is imposed in provinces that have harmonized their provincial sales tax with the GST; these provinces are referred to as the “participating provinces”.

The participating provinces are New Brunswick, Nova Scotia, Newfoundland and Labrador, Ontario and Prince Edward Island.

In the remaining provinces and territories, GST is imposed on taxable goods and services. In these provinces, there may also be a provincial sales tax or a retail sales tax in place.

For the rates of each province, see GST/HST rates.

For the definitions of the GST/HST terms we use on our website, see Definitions for GST/HST.

Note

In Quebec, Revenu Québec administers the GST/HST, except for certain types of listed financial institutions. If your business is located in Quebec, visit the Revenu Québec Web site .

Who pays the GST/HST?

Almost everyone has to pay the GST/HST on purchases of taxable supplies of property and services (other than zero-rated supplies). However, certain persons may not always pay the GST/HST on taxable supplies. These exceptions include Indians and certain provincial and territorial governments.

Who charges the GST/HST?

GST/HST registrants, or businesses required to have a GST/HST registration number, must charge and account for the GST on taxable supplies (other than zero-rated supplies) of goods and services made in Canada. Where GST/HST registrants make taxable supplies (other than zero-rated supplies) in a participating province, they must charge and account for the HST instead of the GST.

GST/HST registrants must meet certain responsibilities. Generally, they must file returns on a regular basis, collect the tax on taxable supplies they make in Canada, and remit any resulting net tax owing.

What supplies does the GST/HST apply to?

Most goods and services supplied in or imported into Canada are taxable supplies and are subject to the GST/HST.

Some supplies of goods and services are taxable at the rate of 0% (zero-rated). GST/HST is charged at a rate of 0% on these supplies. Some common examples of zero-rated supplies of property and services are:

  • basic groceries such as milk, bread, and vegetables;
  • agricultural products such as grain and raw wool;
  • prescription drugs and drug-dispensing fees; and
  • medical devices such as hearing aids and artificial teeth.

For more information, see Zero-rated (0%) supplies - List of GST/HST zero-rated supplies.

A limited number of goods and services are exempt from GST/HST. This means the GST/HST is not charged. Some common examples of exempt supplies of property and services are:

  • used residential housing;
  • long-term residential accommodation (of one month or more), and residential condominium fees;
  • most health, medical, and dental services performed by licensed physicians or dentists for medical reasons;
  • child-care services (day-care services for less than 24 hours a day) for children 14 years old and younger;
  • bridge, road, and ferry tolls (ferry tolls are taxed at 0% if the ferry service is to or from a place outside Canada);
  • legal aid services;
  • many educational services such as:
    • courses from a vocational school that leads to a certificate or a diploma to practice a trade or a vocation, or
    • tutoring services for an individual who takes a course approved for credit by a school authority or the service follows a curriculum designated by a school authority;
  • music lessons;
  • most services provided by financial institutions such as arrangements for a loan or mortgage;
  • arranging for and issuing insurance policies by insurance companies, agents, and brokers;
  • most goods and services provided by charities; and
  • certain goods and services provided by non-profit organizations, governments, and other public service bodies such as municipal transit services and standard residential services such as water distribution.

For more information, see Exempt supplies - List of GST/HST exempt supplies.

 

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