Transition to the Harmonized Sales Tax (HST) in Prince Edward Island

Transcript

Welcome to the Canada Revenue Agency’s webinar on the transition to the harmonized sales tax in Prince Edward Island. My name is Sandra, and I’ll be your host for the next hour.

This presentation will cover the more common situations regarding the transitional rules.

The 2012 Prince Edward Island budget proposed a harmonized sales tax, or HST, that would come into effect on April 1st, 2013, and would replace existing provincial sales tax, or PST, and the federal goods and services tax, or GST, in that province.

The HST will be administered by the Canada Revenue Agency, or CRA.

The HST is currently administered by the CRA in 5 provinces—Ontario, British Columbia, Nova Scotia, New Brunswick, and Newfoundland and Labrador. We call these the "participating provinces."

As of April 1st, 2013, British Columbia will reinstate its PST, replacing the HST at the rate of 12% with the federal GST at the rate of 5%.

So how will the HST affect your business?

Businesses that are already registered for the GST are automatically registered for the HST. Your GST account number will be your HST account number.

The same rules for the administration of the GST will apply to the new HST.

Your filing frequency will not change, and you will continue to report with the same frequency you do now.

The HST will use the same tax base and structure as the GST, with some exceptions. The 5% goods and services tax will continue to apply according to the usual rules, either as GST or, where the HST would apply, as the federal part of the HST. The rules relating to whether a good or service is considered taxable, zero-rated, or exempt under the GST remain the same under the HST. Transitional rules will apply for transactions that include the April 1st implementation date. We will cover some examples of these shortly.

PEI registrants need to update their accounting and point-of-sale systems, such as cash registers and bookkeeping tools, to accommodate the change in rate and the new point-of-sale rebates. Some software already has the option of the HST, where only the percentage charged has to be selected.

For HST invoice requirements

Disclosure and invoicing requirements for the HST in Prince Edward Island follow existing rules of the GST/HST.

Registrants will need to let customers know if HST is being applied to their purchases.

Now for the HST rate

Taxable (other than zero-rated) supplies that are made in Prince Edward Island are generally subject to the HST at a rate of 14%. The 14% HST rate includes 9% for the provincial part and 5% for the federal part.

For further information regarding the place of supply rules that determine whether a supply is made in a province, see GST/HST Technical Information Bulletin B-103, Harmonized Sales Tax – Place of supply rules for determining whether a supply is made in a province.

For purposes of describing the application of the transitional rules, many of the examples in the following slides are based on the assumption that the supply in question is made in Prince Edward Island.

Here are some key dates for transitioning to the HST.

Transitional rules determine which tax would apply to transactions that straddle the April 1st, 2013, implementation date for the HST.

These rules are based on the following dates.

April 1st, 2013, is the date that the HST will apply in PEI.

Another important date is February 1st, 2013.

For a supply by way of sale of tangible personal property or goods, the HST would generally apply to any consideration that becomes due, or is paid without having become due, on or after February 1st, 2013, to the extent that the consideration is for goods that are delivered, and for which ownership is transferred, to the recipient of the supply on or after April 1st, 2013.

The HST would not apply to a supply made by way of sale of goods if the goods are delivered, or ownership is transferred, to the recipient of the supply before April 2013, regardless of when the consideration for the supply becomes due or is paid without having become due. In this case, the GST at 5% would apply.

For a supply of a service, the HST would generally apply to any consideration that becomes due, or is paid without having become due, on or after February 1st, 2013, to the extent that the consideration relates to the part of the service performed on or after April 1st, 2013.

However, if 90% or more of the service is performed before April 2013, the HST would not apply to the consideration payable for the service. In this case, the GST at 5% would apply.

There are special transitional rules for passenger transportation services, freight transportation services, and prepaid funeral and cemetery services.

November 8th, 2012, is the date that the transitional rules were released.

The HST would generally not apply to amounts that become due, or are paid without having become due, on or before this day.

However, persons other than consumers may be required to self-assess the provincial part of the HST on any consideration that becomes due, or is paid without having become due, after November 8th, 2012, and before February 1st, 2013.

More information about these transitional self-assessment rules will be provided in a later slide.

For supplies to the PEI government

The PEI government currently uses, and has agreed to continue to use, the "pay and rebate model" in respect of the payment of the GST/HST on its taxable purchases.

Government entities (including departments, ministries, crown corporations, boards, commissions, and agencies) currently pay the GST/HST on their taxable purchases and will continue to pay the GST/HST after April 1st, 2013.

Under the "pay and rebate model," the government receives a rebate for any GST/HST paid or payable by it.

For supplies to diplomats

As a registrant, you have to charge the GST/HST on taxable goods and service supplies you make to diplomatic missions, consular posts, international organizations, diplomatic agents, consular officers, and designated officials of international organizations.

You have to charge the GST/HST whether purchases are made in the name of the diplomats or their organizations.

Foreign representatives are not exempt from paying the GST/HST. You must collect the GST/HST from them, even if they show you a diplomatic identification card.

A rebate of the GST/HST may be available to qualifying officials and organizations.

To claim the rebate, qualifying diplomats have to complete and file the Form GST498, GST/HST Rebate Application for Foreign Representatives, Diplomatic Missions, Consular Posts, International Organizations, or Visiting Forces Units.

For First Nations

For First Nations, you will apply the HST in the same manner that you now apply the GST when dealing with Indians presenting their status card at the point of sale, or with Indian Bands presenting certificates.

The GST/HST does not apply to goods acquired by Indians, Indian bands, and band-empowered entities if they are:

  • acquired on a reserve; or
  • acquired off a reserve and delivered to a reserve by the vendor or vendor’s agent.

To receive GST/HST tax relief:

  • The Indian individual must show their Certificate of Indian Status card to the vendor.
  • The Indian band or band-empowered entity must provide a certificate to the vendor indicating that the goods are being acquired by an Indian band or band-empowered entity.

Vendors must keep appropriate documentary evidence for all tax-relieved transactions.

See Technical Information Bulletin B-039, GST Administrative Policy Application of the GST/HST to Indians.

Recaptured input tax credits

Starting on April 1st, 2013, large businesses making taxable supplies exceeding 10 million dollars annually, along with certain financial institutions, will have to recapture a portion of the input tax credits attributable to the provincial part of the HST payable for certain property and services acquired in, or brought into, PEI for use by that business in the province.

For more information, see the Government of Prince Edward Island’s Revenue Tax Guide RTG: 186, Temporary Recapture of Certain Provincial Input Tax Credits, or call the CRA at 1-800-959-8287.

Now for the sales of tangible personal property (or goods)

As a general rule, the HST will apply to a supply of goods when they are delivered and ownership is transferred on or after April 1st, 2013.

For amounts due, or paid without having become due, on or after April 1st, 2013, the HST will generally apply for supplies of goods that are delivered, and for which ownership is transferred, to the recipient of the supply on or after April 1st, 2013.

For example:

On February 15th, 2013, I enter into an agreement to sell a sofa. Under this agreement, the sofa will be delivered to the purchaser on April 10th, 2013. The purchaser will make 12 monthly payments between April 2013 and March 2014 and receive ownership of the furniture when all the payments have been made. The HST will apply to this sale. For amounts due, or paid without having become due, on or after February 1st, 2013, and before April 1st, 2013, the HST will generally apply for a supply of goods that are delivered, and for which ownership is transferred, to the recipient of the supply on or after April 1st, 2013.

In this situation, the supplier would be required to account for the PEI part of the HST in the GST/HST return for the reporting period that includes April 1st, 2013.

The recipient of the supply claims any available ITCs for the PEI part of the HST in the GST/HST return for the reporting period that includes April 1st, 2013.

For example:

On March 5th, 2013, a purchaser pays for a sailboat that will not be delivered and for which ownership will not be transferred until May 2nd, 2013.

The HST would apply to the sale.

The supplier would account for the 9% PEI part of the HST in the GST/HST return for the period that includes April 1st, 2013. The purchaser would claim any available ITCs for the PEI part of the HST in the GST/HST return for the reporting period that includes April 1st, 2013.

The supplier would account for the federal part (the 5% GST) in the reporting period when consideration for the supply actually became due, or was paid without becoming due.

For amounts due or paid after November 8th, 2012, and before February 1st, 2013

November 8th, 2012, is the date that the transitional rules were released. The HST would generally not apply to amounts that become due, or are paid without having become due, on or before this day. However, certain persons who are not consumers would generally be required to self-assess the provincial part of the HST on any consideration that becomes due, or is paid without having become due, after November 8th, 2012, and before February 1st, 2013, for:

  • a supply of a good made by way of sale to the extent that the good is delivered, and ownership is transferred, to the recipient of the supply on or after April 1st, 2013;
  • a supply of property made by way of lease, licence, or similar arrangement to the extent that the consideration is attributable to that part of a lease or licence interval that occurs on or after April 1st, 2013—unless the lease interval begins before April 2013 and ends before May 2013;
  • a supply of a service, to the extent that the consideration relates to the part of the service that is performed on or after April 1st, 2013—unless 90% or more of the service is performed before April 2013;
  • a taxable supply of a membership in a club, organization, or association to the extent that the consideration is attributable to the part of the membership period that occurs on or after April 1st, 2013—unless again 90% of the membership period occurs before April 2013;
  • a taxable supply of an admission to an event or activity to the extent that the consideration is for the part of the event or activity that occurs on or after April 1st, 2013—unless 90% or more of the event or activity occurs before April 2013; or
  • a supply of a passenger transportation pass to the extent that the consideration is for part of the pass period that occurs on or after April 1st, 2013—unless the pass period begins before April 2013 and ends before May 2013.

A person who is required to self-assess in these circumstances would be required to account for the tax either in their GST/HST return for the reporting period that includes April 1st, 2013, if the due date for that return is before August 1st, 2013, or in any other case, in prescribed form using the Form GST489, Return for Self-Assessment of the Provincial Part of Harmonized Sales Tax (the HST), and before August 1st, 2013. The requirement to self-assess the provincial part of the HST in these situations does not apply if the person:

  • acquires the supply for consumption, use, or supply exclusively in the course of the person’s commercial activities;
  • would be entitled to claim an ITC for the total of the provincial part of the HST payable in respect of the supply and would not be required to add an amount in calculating the person’s net tax in respect of that ITC (for example, meal and entertainment expenses and the recapture of ITCs);
  • does not use simplified procedures available for calculating the person’s net tax (such as those methods used by certain charities, public service bodies, and small businesses); and
  • is not a registrant that is a selected listed financial institution. 

For example:

On December 5th, 2012, a selected listed financial institution (SLFI) that is a registrant and a monthly GST/HST filer is invoiced for security equipment for which delivery occurs, and ownership is transferred, on April 1st, 2013. The SLFI must self-assess the PEI part of the HST on the amounts for the equipment in its GST/HST return for its reporting period that includes April 1st, 2013.

For subscriptions to newspapers, magazines, or other publications

The HST would generally not apply to amounts that are paid before April 1st, 2013, for a subscription to a newspaper, magazine, or other publication published periodically.

Here’s an example:

In March 2013, a person pays for an annual subscription to a magazine. Editions of the magazine will be delivered each month for 12 months, starting in April 2013. The HST would not apply to the payment for the subscription.

For services

As a general rule, the HST would apply to a supply of a service to the extent that the service is performed on or after April 1st, 2013. The HST would generally not apply, however, to a supply of a service if all or substantially all (meaning 90% or more) of the service is performed before April 1st, 2013.

For example:

A service is supplied from February 1st, 2013, to April 2nd, 2013, and invoiced on April 2nd, 2013. The HST would not apply to any part because more than 90% of the service was supplied before April 1st, 2013.

Special rules for passenger transportation services, freight transportation services, and prepaid funeral and cemetery services will be discussed later.

For amounts due or paid on or after April 1st, 2013

The HST would generally apply to consideration that becomes due, or is paid without having become due, on or after April 1st, 2013, for a supply of a service, to the extent that the consideration is for the part of the service that is performed on or after April 1st, 2013.

Here’s an example of that:

A person hires a consulting firm to perform a service during the early spring of 2013, but is not invoiced, and does not pay, for the service until May 2013. One-third of the service is performed in each of the months of March, April, and May 2013. The HST would apply to the amount that is for the part of the service performed in April and May (that is, two-thirds of the consideration).

The following rule applies to services where amounts were due or paid on or after February 1st, 2013, and before April 1st, 2013.

The HST would generally apply to consideration that becomes due, or is paid without having become due, on or after February 1st, 2013, for a supply of a service, to the extent that the consideration is for the part of the service that is performed on or after April 1st, 2013.

In this situation, the supplier would be required to account for the PEI part of the HST in the GST/HST return for the reporting period that includes April 1st, 2013.

The recipient of the supply would be able to claim any available ITCs for the PEI part of the HST in the GST/HST return for the reporting period that includes April 1st, 2013.

Here’s an example:

In February 2013, a person pays for interior decorating services, 50% of which will be performed after April 1st, 2013. The HST would apply to 50% of the consideration for that service, and the supplier would account for the PEI part of the HST in its GST/HST return for its reporting period that includes April 1st, 2013.  

The recipient of the supply would be able to claim any available ITCs for the PEI part of the HST in the GST/HST return for the reporting period that includes April 1st, 2013.

Now for amounts due or paid after November 8th, 2012, and before February 1st, 2013

Persons other than consumers may be required to self-assess the PEI part of the HST on amounts that become due, or are paid without having become due, after November 8th, 2012, and before February 1st, 2013, for a supply of a service, to the extent that the consideration is for the part of the service that is performed on or after April 1st, 2013.

Here are some special rules for services:

For prepaid funeral and cemetery services

In general, the HST would not apply to consideration for the part of a funeral or cemetery service that is performed on or after April 1st, 2013, if the service is supplied under an arrangement in writing that was entered into before April 1st, 2013.

For passenger transportation services

The HST would not apply to amounts for the part of a passenger transportation service that is performed on or after April 1st, 2013, if service is part of a continuous journey that begins before April 1st, 2013.

For example:

In March 2013, a person pays for round-trip air travel as part of a continuous journey from Charlottetown to Ottawa on March 31st, 2013, and from Ottawa to Charlottetown on April 2nd, 2013. The HST would not apply to the payment for the round-trip air travel.

For freight transportation services

The HST would not apply to consideration for the part of a freight transportation service that is performed on or after April 1st, 2013, if the service is part of a continuous freight movement of goods that begins before April 1st, 2013.

Here’s an example:

I provide a freight transportation service that starts on March 29th, 2013, and ends on April 3rd, 2013. The HST does not apply.

For leases and licences

The general rules for property supplied by way of lease, licence, or similar arrangement, and for which the consideration is rent, royalties, or similar payments are:

The HST would generally apply to a supply of property, including goods, commercial real property, and intangible personal property, by way of lease, licence, or similar arrangement, for the part of a lease interval that occurs on or after April 1st, 2013.

However, the HST would not apply to a supply of property by way of lease, licence, or similar arrangement if the lease interval begins before April 1st, 2013, and ends before May 1st, 2013.

For example:

A person makes a car lease payment for the lease interval from March 15th, 2013, to April 14th, 2013. The HST would not apply to the lease payment, regardless of when the payment was made.

For amounts due or paid on or after April 1st, 2013

The HST would generally apply to consideration that becomes due, or is paid without having become due, on or after April 1st, 2013, for a supply of property by way of lease, licence, or similar arrangement, to the extent that the amount is for the part of a lease interval that occurs on or after April 1st, 2013, unless the lease interval begins before April 1st, 2013, and ends before May 1st, 2013.

Here’s an example:

A monthly car lease payment becomes due and is paid on April 1st, 2013, for the lease interval from April 1st, 2013, to April 30th, 2013.

The HST would apply to the lease payment.

Now for amounts due or paid on or after February 1st, 2013, and before April 1st, 2013

The HST would generally apply to consideration that becomes due, or is paid without having become due, on or after February 1st, 2013, and before April 1st, 2013, for a supply of property by way of lease, licence, or similar arrangement, to the extent that the consideration is for the part of a lease interval that occurs on or after April 1st, 2013—unless the lease interval begins before April 1st, 2013, and ends before May 1st, 2013.

In this situation, the supplier would be required to account for the PEI part of the HST in the GST/HST return for the reporting period that includes April 1st, 2013.

The recipient of the supply would be able to claim any available ITCs for the PEI part of the HST in the GST/HST return for the reporting period that includes April 1st, 2013.

Here’s an example of that:

On February 1st, 2013, a lease payment becomes due and is paid for a generator. The lease interval is six months, from February 1st, 2013, to July 31st, 2013. The part of the payment for the months of February and March would not be subject to the HST, but the part of the payment for the months of April, May, June, and July would be subject to the HST.

The supplier would account for the PEI part of the HST in the GST/HST return for the period that includes April 1st, 2013. The purchaser would claim any available ITCs for the PEI part of the HST in the GST/HST return for the reporting period that includes April 1st, 2013.

Now for amounts that are due or paid after November 8th, 2012, and before February 1st, 2013:

For amounts due or paid after November 8th, 2012, and before February 1st, 2013, persons who are not consumers, such as businesses and public service bodies, may be required to self-assess the 9% PEI part of the HST on consideration for a supply of property by way of lease, licence, or similar arrangement that becomes due, or is paid without having become due, after November 8th, 2012, and before February 1st, 2013, to the extent that the consideration is for the part of a lease interval that occurs on or after April 1st, 2013—unless the lease interval begins before April 1st, 2013, and ends before May 1st, 2013.

Now for intangible personal property

A sale of intangible personal property (for example, contractual rights, patents, and royalties) would generally be subject to the HST if the consideration for the supply becomes due, or is paid without having become due, on or after April 1st, 2013.

There are special rules for transportation passes, memberships, and admissions.

For more information, see GST/HST Notice 278, Harmonized Sales Tax for Prince Edward Island – Questions and Answers on General Transitional Rules for Personal Property and Services

We will move on to exchanges and returns of goods.

Special rules apply to exchanges made on or after April 1st, 2013, and for goods purchased before April 1st, 2013.

If the amount paid for the replacement good is more than the amount that was paid for the original good, the HST would apply to the difference.

If the amount paid for the replacement good is less than or equal to the amount that was paid for the original good, the HST would not apply.

Also, if the PST did not apply to the good purchased before April 1st, 2013, and the good is exchanged on or after that day, then the HST would apply to the full amount for the replacement good. However, the purchaser would be eligible for a refund of the GST paid on the purchase of the original good.

For example:

In April 2013, a person returns a slow cooker that was purchased in March 2013 for $140. The vendor exchanges the returned slow cooker for another slow cooker that costs $160. In this situation, the vendor would collect the HST on the $20 difference.

Or, in April 2013, a person returns a bicycle purchased in March 2013, PST-exempt, for $300. The vendor exchanges it for another bicycle that costs $400. In this situation, the vendor would collect HST on the total $400 amount payable for the new bike. The purchaser would then be eligible for a refund of the GST paid on the purchase of the original bicycle.

For more information, see GST/HST Notice 278, Harmonized Sales Tax for Prince Edward Island – Questions and Answers on General Transitional Rules for Personal Property and Services

Now for supply and install contracts

A special rule applies where property and services are supplied together as one supply. 

If ownership or possession of the property is transferred to a recipient before April 2013, and that property would not be subject to the HST under the general transitional rules if it were supplied separately, the supply of that property will be considered to be a separate supply from the service or other property.

This means that you will have to separate the amounts attributable to the goods and the services for the purpose of applying the appropriate rate of tax in situations where the good is being delivered, or ownership is being transferred, prior to April 1st, 2013, and the service relating to the good will occur on or after April 1st, 2013.

For example:

In February 2013, a contractor agrees to supply and install home theatre equipment for a single consideration. The equipment is delivered in March 2013, and it is installed in April 2013.

The HST would apply to the service of installing the equipment because the service is performed after April 1st, 2013.

The HST would not apply to the sale of the equipment because delivery occurred before April 1st, 2013.

Reporting the HST during the transition period for the supplier

For the purposes of the 9% provincial part of the HST for PEI, amounts that become due, or are paid without having become due, on or after February 1st, 2013, and before April 1st, 2013, will be considered to become due, and not to have been paid before, April 1st, 2013. The supplier is required to collect the provincial part of the HST from the purchaser at that time and account for that tax in the GST/HST reporting period that includes April 1st, 2013.

The supplier accounts for the federal part (the 5% GST) in the reporting period when consideration for the supply actually became due, or was paid without becoming due.

For example, on February 10th, 2013, a supplier sells and collects payment for a sofa for delivery in April 2013. She accounts for the federal part (the 5% GST) on the return for the reporting period the payment was actually made—February 10th, 2013. She then accounts for the provincial part of the HST (9%) as if it was paid on April 1st, 2013.

If the supplier was a quarterly filer, she would report the 5% federal part that was collected in February on the return for her January, February, and March reporting period and the provincial part of the HST on her return for April, May, and June.

If the supplier was a monthly filer, she would report the 5% federal part on her February return and the provincial part on her April 2013 return.

Reporting the HST during the transition period for the purchaser

When the HST is paid or payable by a purchaser who is a registrant in the period on or after February 1st, 2013, and before April 1st, 2013, the purchaser is able to claim ITCs for the provincial part of the HST in their GST/HST reporting period that includes April 1st, 2013.

The purchaser is able to claim any available GST ITCs in the reporting period that the GST is paid or payable.

On and after April 1st, 2013, you will be able to claim an ITC at the HST rate when paying the HST rate.

This means, similar to the rules for the supplier, as a GST/HST registrant purchaser you will have to separate the provincial and the federal parts of the HST for purposes of reporting for transactions that straddle the April 1st, 2013, implementation date.

Here’s an example:

A registrant purchases and pays for a piece of equipment on March 2nd, 2013, that will only be delivered on April 10th, 2013. The HST applies to this purchase. He is eligible to claim an input tax credit for the GST of 5% on his GST/HST return for the reporting period that includes March 2nd, 2013. He could then claim an input tax credit for the 9% provincial part of the HST that he paid on his return for the period that includes April 1st, 2013.

For point-of-sale rebates

Under the HST in PEI, the Government of PEI will provide a rebate of an amount equal to the 9% provincial part of the HST payable on qualifying goods sold, imported, or brought into PEI. The CRA and the Canada Border Services Agency will administer the provincial rebate on behalf of the Government of PEI.

PEI provides a point-of-sale rebate on qualifying children’s clothing and footwear, qualifying books, and heating oil. The provincial point-of-sale rebate is available at any point in the distribution chain of the qualifying goods sold in PEI. It is not limited to sales of qualifying goods made by retail establishments located in PEI.

For example, it also applies where the sale of qualifying goods are made in PEI by wholesalers and distributors located throughout the country.

Suppliers that are GST/HST registrants will charge only the federal part of the HST on their sales of these goods which is 5%, which is the same rate of tax that they are currently charging.

Let’s take a minute to explain the three ways a registrant supplier may show the point-of-sale rebate on their invoices.

Invoicing for point-of-sale rebates

When disclosing the HST on an invoice or receipt issued in respect of the sale of qualifying goods where the registrant supplier has paid or credited the rebate amount on behalf of the Government of PEI, the supplier has three options. They can indicate:

  • the total amount of the 14% HST payable (or the total HST rate) with the rebate amount paid or credited shown separately;
  • the total HST payable as an amount net of the rebate amount paid or credited; or
  • the total price of the qualifying goods that includes HST at a net rate of 5%.

Here are some invoicing examples:

A retailer in PEI sells qualifying children’s footwear for $40 and pays or credits the rebate amount of $3.60 (that is, $40 × the 9%, which equals $3.60) at the point of sale.

The retailer will have the following three options for disclosing the total HST payable and the rebate amount paid or credited:

  • they can show the price of the footwear ($40), plus the HST (which is $5.60), minus the rebate of the provincial part of 9% (which is $3.60), and the amount due;
  • they can show the price of the footwear ($40), plus the federal part of 5% (which is $2), and the amount due of $42; or
  • they can show only the amount due of $42, and indicate that HST of 5% is being applied to the purchase.

For showing the point-of-sale rebate on the GST/HST return

A registrant supplier that pays or credits the rebate amount at the point of sale would have two options for accounting for the rebate amount on its GST/HST return:

  • the registrant may account for the total HST collected or collectible, that is 14%, on line 103 of the return and claim an adjustment for the rebate amount paid or credited on line 107; or
  • the supplier may show the net amount as the HST collected or collectible (of 5%) on line 103 and not claim an adjustment for the rebate amount paid or credited on line 107.

The next couple of slides will provide examples of each.

Option 1

Continuing with our example of the retailer selling qualifying children’s shoes for $40, to show the rebate on their GST/HST return, the retailer can indicate:

  • the price of the footwear, $40, at line 101;
  • the 14% GST/HST collected or collectible of $5.60 at line 103;
  • an adjustment of $0 at line 104;
  • a total GST/HST adjustment of $5.60 at line 105;
  • ITCs of $0 at line 106;
  • an adjustment for the 9% rebate of $3.60 at line 107;
  • total ITCs or adjustments of $3.60 at line 108; and
  • the net tax of $2 at line 109.

Although, in this example, we have not indicated any eligible ITCs for the tax paid or payable on purchases of taxable goods and services, the ITCs would continue to be claimed on line 106.

Here is option number 2.

The retailer may show the net amount collectible on line 103 and not claim an adjustment for the rebate amount credited on line 107.

Again, although in this example we have not indicated any eligible ITCs for the tax paid or payable on purchases of taxable goods and services, the ITCs would continue to be claimed on line 106.

For more information on the HST, see the following publications:

  • The Guide RC4022, General Information for GST/HST Registrants; and
  • The GST/HST Notice 278, Harmonized Sales Tax for Prince Edward Island – Questions and Answers on General Transitional Rules for Personal Property and Services.

Check the harmonization Web site often for updates as information is added as it becomes available.

Now we have addressed the more common elements of the transition to the HST for PEI. If you have an account-specific enquiry or an enquiry related to a topic not covered today, go to the CRA’s HST Web pages at www.cra.gc.ca/harmonization or call the CRA’s business enquiries line at 1-800-959-5525. The business enquiries line is open from Monday to Friday, 8:15 a.m. to 8:00 p.m., local time.

For questions on the HST relating to the housing rebates and real property, direct sellers, and life-time memberships, call GST/HST Rulings at 1-800-959-8287.

Thank you for your interest in our HST webinar.

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