Sales Taxes -> GST/HST -> Exempt and taxable (including zero-rated) goods and services
GST/HST Taxable and Exempt Goods and Services
GST/HST Taxable Goods and Services
GST/HST 2-month "Vacation" / How to Get a Rebate
Participation in GST/HST Holiday
GST/HST Exempt Goods and Services
GST/HST Zero-Rated Goods and Services
Small Supplier Threshold Includes Zero-Rated Sales
Canada Revenue Agency (CRA) Resources
GST/HST Taxable Goods and Services
Most goods and services purchased in Canada, or brought into Canada are taxable. Examples of taxable goods and services can be found in the CRA Guide RC4022 under the heading "Taxable Supplies".
GST/HST 2-month "Vacation" / How to Get a Rebate
Late in November 2024, the Federal government proposed to temporarily zero-rate certain items which would normally attract GST or HST, for December 14, 2024 to February 15, 2025.
Unfortunately, this was not well thought-out prior to the announcement or the tabling of legislation. It will not provide much in savings for taxpayers, especially low-income taxpayers. All retailers will have the burden of reprogramming their point-of-sale systems in December and again in February. This will be more of a burden for small retailers who may have to outsource the reprogramming, at significant cost. It creates a significant burden for Canada Revenue Agency (CRA), who must administer the temporary measurer and provide support to retailers.
CRA has provided guidance on this measure, with details of which items qualify for the exemption. See GST/HST holiday tax break.
Some retailers may find it difficult or impossible to provide the zero rate. If this happens, you can apply for a refund of the GST/HST paid in error, by completing and submitting Form GST189, General Application for GST/HST Rebates. The claim code to be used in this situation would be reason code 1C, amounts paid in error.
See CRA's RC4033 General Application for GST/HST Rebates for more information. Only one rebate application can be filed per calendar month, and the application must be submitted within 2 years after the day that you paid or remitted the amount in error.
The Quebec government is not applying the same temporary measure to the Quebec Sales Tax (QST). See Temporary Measure Zero-Rating Specific Items on the Revenu Quebec website.
Participation in GST/HST Holiday
On December 13, 2024, the Canadian Federation of Independent Business (CFIB) announced that they had confirmed with government that it is NOT mandatory for businesses to participate in the GST/HST holiday. As of December 14, 2024, CRA had not made a public statement confirming this. As of December 16, 2024, CFIB has removed that information from their website. Perhaps they misinterpreted a statement to them from the government. However, at the CRA web page GST/HST holiday tax break, CRA states, at the bottom of the page:
Businesses who make reasonable efforts to comply with the legislation will not be the focus of our compliance actions.
We will be focusing on situations where businesses willfully and egregiously refuse to comply with the temporary measures, such as a business that collects the GST/HST and does not remit it to the CRA.
Tax Tip: Keep copies of all cash register receipts for purchases of exempt items that were charged GST/HST in error.
Bill C-78, the Tax Break for All Canadians Act, was tabled in the House of Commons and received Royal Assent on December 12, 2024. See Legislation to put more money in your pocket receives Royal Assent.
GST/HST Exempt Goods and Services
Some goods and services are exempt from GST/HST, such as:
 | used residential housing | ||||||||||||||||
| residential accommodation of one month or more | ||||||||||||||||
| residential condominium fees | ||||||||||||||||
| most health, medical, and dental services performed by licensed physicians or dentists for medical reasons | ||||||||||||||||
| day-care services for children 14 years old and younger, if the services are for less than 24 hours a day | ||||||||||||||||
| bridge, road, and ferry tolls | ||||||||||||||||
| legal aid services | ||||||||||||||||
| many educational services, including
music lessons | most financial institution services including
arrangements for a loan or mortgage | arranging for and issuing insurance policies by
insurance companies, agents, and brokers | most goods and services provided by charities | certain goods and services provided by non-profit
organizations, governments, and other public service bodies such as
municipal transit services and standard residential services such as
water distribution. | |
For charities, see the CRA page RC4082 GST/HST Information for Charities.
GST/HST Zero-Rated Goods and Services
Taxable goods and services, for purposes of GST and HST, include items which are zero-rated. That is, these items are considered taxable, but the tax rate is zero. These zero-rated items include things such as
| basic groceries, |
| prescription drugs, |
| most agricultural products and farm livestock, and |
| many medical devices, such as hearing aids and artificial teeth |
| as of July 1, 2015, products marketed exclusively for feminine hygiene purposes. This includes sanitary napkins, tampons, sanitary belts, menstrual cups or other similar products. See the May 2015 Notice of Ways and Means Motion and Explanatory Notes. |
Zero-rated also includes items which would be taxed at the full rate, except that they are being exported. The transportation costs of the exported items would also be zero-rated. If you provide services for non-residents of Canada, these services may be zero-rated. See the Canada Revenue Agency (CRA) GST/HST Memorandum 4.5.3 Exports - Services and Intellectual Property.
Small Supplier Threshold Includes Zero-Rated Sales
Sales of zero-rated items must be included when calculating whether or not the business has reached the $30,000 annual small supplier threshold for collecting GST. The threshold is $50,000 for public service bodies. No GST is charged when the zero-rated items are sold. Visit the Canada Revenue Agency (CRA) website for more information on Which GST/HST rate to charge. This includes a table showing the tax status of various types of supplies, and some examples of supplies taxable at 0%.
TaxTips.ca Resources
Goods and Services Tax (GST) & Harmonized Sales Tax (HST) - all GST/HST topics
Canada Revenue Agency (CRA) Resources
Forms and Publications for GST/HST
GST Memoranda Series - by Chapters
Revised: December 16, 2024