How to Complete a GST/HST Tax Return



How GST/HST works

The GST is a tax that applies to the supply of most property and services in Canada. The provinces of Nova Scotia, New Brunswick, and Newfoundland and Labrador, referred to as the participating provinces, harmonized their provincial sales tax with the GST to create the HST. 

Generally, the HST applies to the same base of property and services as the GST. In some participating provinces, there are point-of-sale rebates equivalent to the provincial part of the HST on designated items. For more information, see Reason code 16.

As of July 1, 2010, Ontario harmonized its retail sales tax with the GST to implement the HST at the rate of 13% and British Columbia harmonized its provincial sales tax with the GST to implement the HST at the rate of 12%. Also, as of July 1, 2010, Nova Scotia increased its HST rate from 13% to 15%.

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

Almost everyone has to pay the GST/HST on purchases of taxable supplies of property and services (other than zero-rated supplies). A limited number of sales or supplies are exempt from GST/HST.

Although the consumer pays the tax, businesses are generally responsible for collecting and remitting it to the government. Businesses that are required to have a GST/HST registration number are called registrants.

Registrants collect the GST/HST on most of their sales and pay the GST/HST on most purchases they make to operate their business. They can claim an input tax credit, to recover the GST/HST paid or payable on the purchases they use in their commercial activities.

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.

Here is a step by step guide on how to file a GST/HST tax return:

Step 1:  Calculate your total revenue. Interest income and dividends are not included.

Step 2:  Calculate the expected GST/HST amount collected as the Total Revenue x current GST/HST  rate. This amount should match your actual GST/HST collected amount.

Step 3: Complete Part 1 (the working copy) of the HST/GST form:

* Line 101 is your total revenue rounded to the nearest dollar.
* Line 103 is the HST/GST collected amount.
* Line 104 is for any adjustments that need to be made to this amount.
* Line 105 is the total of line 103 and 104.
* Line 106 is the HST/GST input credit amount, which is the amount of HST/GST you have paid out.
* Line 107 is for any adjustments that need to be made to this amount.
* Line 108 is the total of line 106 and 107.
* Line 109 is line 105 less line 108.
* If you made any instalment amounts, this goes on line 110.
* If you were eligible for any rebates, this goes on line 111.
* If your ending total was negative, this goes on Line 114 as the refund claimed. If the total was positive, this goes on Line 115 as the amount owing.

click here for more information on GST HST regarding change of use of capital property for commercial purposes. 



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