This section is intended to help you navigate GST requirements on goods and services. The GST/HST Invoicing Decision Tree describes UBC’s GST/HST treatment of supplies.
What is GST?
GST is a 5% tax on consumption of goods and services in Canada. It is levied under Part IX of the Excise Tax Act (ETA). Taxable goods and services supplied in a “participating province” (Ontario, Nova Scotia, New Brunswick, Newfoundland and Prince Edward Island) are subject to the Harmonized Sales Tax (HST) at rates that vary depending on the particular province.
See Place of Supply for details.
Who is Liable?
Purchasers of taxable goods and services are liable for the tax, which is collected by vendors who must register and collect it.
How is it Collected?
Registered vendors must collect the GST/HST from purchasers of goods and services. In addition, importers of goods into Canada must pay the GST to the Canada Revenue Agency (CRA) at the time the goods are cleared for customs purposes (and HST in the case of imports by consumers). They must also self-assess the provincial component of the HST, if applicable, when importing commercial goods. It is not possible for CRA to collect tax on imported services and imported intangible property at the border. Instead, imported services and intangibles are subject to GST/HST on a self-assessment basis under the imported taxable supply rules.
How is it Recovered?
Registered persons who purchase goods and services for use in a commercial activity can recover the tax on such purchases by deducting it as an input tax credit (ITC) from the tax collectible on sales when reporting to the CRA. The net difference is remitted to the CRA or is claimed as a refund if the tax payable exceeds the tax collectible.
Special Rules for UBC
As UBC is a Public Service Body and Public Institution, special rules apply. Most supplies (sales, leases, licences, rentals, etc.) of Public Institutions are exempt from GST/HST other than supplies of newly acquired/manufactured/produced goods that were not donated to the university, licenses and short-term leases of real property and licenses and leases (both short-term and long-term) of real property under a special GST election and certain services/intangibles (e.g. recreational/athletic activities, admissions to events) which are taxable.
ITCs cannot be claimed for tax on related purchases for exempt supplies. Instead, rebates are available to recover GST paid on such purchases. A 67% rebate is available to UBC for GST on most purchases when ITCs cannot be claimed. A 100% book rebate is available for GST on purchases of “printed books” for UBC’s own use (i.e. not for resale).
GST on Taxable Sales
In Workday GST may be recorded using the ‘GST Payable’ ledger accounts in local cost centres via accounting journal. As a result, accounting journal approvals are done locally by the Budget Owner. At month end there is a monthly allocation to transfer the liability balances to a central cost centre.