Collecting and Remitting GST/HST

As mentioned, GST/HST is usually collected on behalf of the government by the person or business who is providing the services or goods, and then remitted back to the government. In order to do so, that person or business must be a GST registrant. Although you can volunteer to collect GST, you must collect and remit if your sales exceed the small supplier threshold of $30,000 worldwide taxable supplies or goods sold in either one calendar quarter or four consecutive quarters.

Once registered, you are responsible to collect GST/HST on all taxable goods and services. You must then hold this tax and remit it back to the CRA. In order to remit, you will be required to file a GST return monthly, quarterly or annually depending on your revenues.

Once you have registered, you are also eligible for claiming Input Tax Credits (ITC’s) on all GST you pay. Basically as GST is a consumer tax, GST registrants are allowed to claim ITC’s on the GST paid on services/goods used to provide the goods and services. Thus, your GST return will determine the net GST collected and paid, to be remitted (or refunded if you’ve paid more than you’ve collected). You need to keep accurate records to support your tax obligations and entitlements.

Although you can voluntarily choose to file and remit quarterly or monthly, if you have annual taxable sales and revenues that are $1,500,000 or less, you are only required to file and remit annually. Similarly if your annual taxable sales and revenues are greater than $1,500,000 but either equal or less than $6,000,000 you must at the least file and remit quarterly. If your annuals taxable sales and revenues exceeds $6,000,000 you are required to file and remit monthly.

In addition to the filing requirements, once you are a GST registrant you are also required to provide customers with:

  • receipts
  • invoices and/or
  • contracts

Depending on the amount of the sale, if your customers ask you for an invoice or receipt to claim an input tax credit or ITC, depending on the amount of the sale, by law you have to give them certain information.