Returnable containers

GST/HST generally applies to empty returnable containers. However, we consider usual packaging or containers (other than returnable beverage containers) to be part of the goods they cover or contain. Therefore, the tax applies on the same basis as the goods the containers hold. For example, containers filled with medical oxygen are zero-rated (0%).

When a customer returns a container that held goods, you can treat the transaction in one of two ways, depending on the terms of the original agreement:

• a sale by the customer to you (the original supplier); or
• a refund you pay to the customer.

If the return of the container is treated as a sale, the customer, if a registrant, charges you GST/HST on the return of the container. You can claim an input tax credit for the GST/HST payable on the purchase of the container.

If the return is treated as a refund, you have to issue a credit note to the customer or, alternatively, the customer has to give you a debit note. In that case, see Returned goods.

Forms and publications

• GST/HST Technical Information Bulletin B-038, Returnable Containers Other than Beverages Containers