Charging and collecting the GST/HST

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

Segment 4: I'm registered. Now what?

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You are registered. Now what?

In Quebec, Revenu Québec administers the GST/HST, unless you are a selected listed financial institution. If your business is located in Quebec, visit Revenu Québec.  

Do you have to charge the GST/HST?

Generally, if you sell taxable (including zero-rated) goods or services in Canada and you are registered for a GST/HST account, you must charge your customers GST/HST. However, your customer may not have to pay the GST/HST. You must consider who the supply is being made to, and whether the supply is taxable at 0% or exempt.

For more information, Taxable supplies - How the GST/HST applies in different situations.

How do you charge the GST/HST?

How to determine which rate of tax to charge

Usually, if you are supplying goods or services in your place of business, you will charge the GST or HST rate for your province or territory.

If you are supplying goods or services to a customer outside your province or territory, see Place of supply rules

If you are supplying goods or services to Indians, see GST/HST and Indians.

If you are supplying goods or services to a customer outside Canada, see Import and exports.

Provincial sales tax

In provinces where you have to charge the GST and the provincial sales tax (PST), calculate the GST on the price excluding the PST. For more information on the PST in your province, contact your provincial sales tax office.

Rounding off fractional amounts

Round off the GST/HST to the nearest cent:

  • if the amount is less than half a cent, round down
  • if the amount is equal to or more than half a cent, round up

If your customer is buying more than one item and tax applies at the same rate on all items, you can total the prices of all taxable supplies of goods and services, calculate the GST/HST payable, and then round off the amount.

How to calculate GST/HST on discounts

The GST/HST you charge depends on the type of discount you are giving:

Type of discounts
If your discount is Then Example of discount
An early-payment discount on credit sales Charge the GST/HST on the original price before applying the discount. You invoice a customer for $1000 and you offer a 2% discount if your customer pays the bill within 10 days instead of the usual 30 days. Charge the GST/HST on the $1000 original price and not the $980 discounted price.
A volume discount at the time of sale Charge the GST/HST on the price after the volume discount. You charge a customer $79 per item (instead of the usual $99 per item) if the customer buys 10 or more. You would then charge GST/HST on $79 which a volume discount was applied.
A volume discount after the sale You need to choose whether or not to credit the GST/HST related to the amount of the volume discount. You offer a 4% discount at the end of the year for customers who buy goods totalling more than $20,000.

Late-payment surcharge on credit sales

Do not charge GST/HST on late-payment surcharges. GST/HST is payable only on the original invoiced amount. For example, your customer pays after the due date. If you charge $5 for late payment of goods invoiced at $100, the GST/HST does not apply to the late charge.

For more information on how to apply GST/HST on discounts or late-payment surcharges, see Taxable supplies - Special cases.

What information do you need to include on your receipts or invoices?

You must let your customers know when the GST/HST is being applied to their purchases.

You can use cash register receipts, invoices, contracts, or post signs at your place of business to inform your customers whether the GST/HST is included in the price, or added separately.

You have to show either:

  • that the total amount paid or payable for a supply includes the GST/HST
  • the amount paid or payable for the supply and show the amount of the GST/HST payable on the supply separately
  • the GST/HST rate that applies to the supply

If HST applies to the supply, show the total HST rate. Do not show the federal and provincial parts of the HST separately.

Invoice requirements for supplies made to GST/HST registrants

You have to give customers who are GST/HST registrants specific information on the invoices, receipts, contracts, or other business papers that you use when you supply taxable goods and services. They need this information to support their claims for input tax credits (ITCs) or rebates for the GST/HST you charged. Similarly, when you make business purchases, the invoices from your suppliers will support your claims for ITCs. 

The specific information that must be included on the invoice depends on the amount of the sale. 

For more information on what you must include on invoices for GST/HST registrants, see the table "Information requirements for sales invoices".

You can check if a business is a GST/HST registrant. This helps to ensure that claims submitted for ITCs only include GST/HST charged by suppliers who are registered for the GST/HST.

What do you do with the GST/HST you have collected?

You are responsible to hold this tax in trust until you send it to the CRA. You are required to remit all net tax owing with your returns and/or by instalments.  For more information on how to remit the tax, see Calculating the net tax to complete a GST/HST return.

What records do you have to keep?

You must keep the records that will support the information you provide on your GST/HST returns. Your records must allow you to calculate:

  • the amount of GST/HST you collected
  • the amount of GST/HST paid and payable on your eligible business purchases and expenses
  • the amount of tax to be refunded, rebated, or deducted from your net tax

Your records must describe the goods and services being traded in sufficient detail to determine whether or not GST/HST applies. Usually you must keep your records for a period of six years from the end of the last year to which they relate. However, we may ask you to keep the invoices longer than six years.

For more information, see Keeping records.

Related topics

Calculating the net tax to complete a GST/HST return

Filing a GST/HST return

Paying the GST/HST (including instalment payments)

Forms and publications

Guide RC4022, General Information for GST/HST Registrants

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