GST/HST Return

A GST/HST Return is an annual requirement for businesses that have revenue from taxable supplies in excess of $30,000 and pay Goods and Services Tax (GST) or Harmonized Sales Tax (HST) in Canada. Using their Business Numbers (or GST/HST numbers), businesses collect, report, and remit taxes to the Canada Revenue Agency (CRA). If you’ve registered for a GST/HST number, you’ll have been assigned a Business Number. The return can be filed electronically through various methods, including GST/HST NETFILE, My Business Account, Represent a Client, Electronic Data Interchange (EDI), GST/HST TELEFILE, and GST/HST Internet File Transfer. Its noteworthy to mention that even if your revenue from taxable supplies drops below the $30,000 threshold, once you are registered, you are still required to collect and remit the GST/HST on your taxable supplies of property and services.

The business must file a GST/HST Return regardless of whether it had transactions or not. Businesses with no transactions file a NIL Return . The due date for filing the GST/HST returns depends on your reporting period. Here are the deadlines:

Monthly filers: Submit your return by the end of the month following the reporting period (e.g., if your period ends on March 31, file by April 30).

Quarterly filers: File within one month after the end of the reporting period.

Annual filers (except for individuals with a December 31 fiscal year-end and business income for income tax purposes): The deadline is three months after the fiscal year-end.

There are two methods of filing being the Regular and the Quick methods. For the purposes of this blog, we will focus only on the Regular method. When filing your GST/HST return using the regular method, you’ll need to report on the following lines (source: Canada.ca):

Line 101 : Enter the total amount of revenue from supplies of property and services, including zero-rated and exempt supplies, and other revenue for the reporting period. Do not include the provincial sales tax, GST, or HST in the figure.

Line 103 : Enter all GST/HST you were required to collect as well as all amounts collected on property and services. Include the GST/HST you collected or were required to collect on any sale of real property and other capital property on both paid and unpaid invoices.

Line 106 : Enter eligible ITCs for the GST/HST paid or payable on the value of property and services you acquired, imported, or brought into a participating province to the extent they are for consumption, use, or supply in the course of your commercial activities. Enter the total of all ITCs for the reporting period. Include any ITCs you did not claim in an earlier reporting period, provided the time limit for claiming the ITCs has not expired.

Line 107 : Complete this line if you have adjustments that decrease the amount of your net tax for the reporting period. Enter the total of all adjustments. For example, you can claim the amount of any GST/HST on bad debts you write off if you have previously accounted for the full amount of the GST/HST on the supplies that resulted in those debts, and if you have remitted any net tax owing.

Line 110 : Enter the total amount of the quarterly instalments you paid in the year.

Let’s look at an example: Roger is preparing his GST/HST return using the regular method. he had total sales of $50,000 excluding HST and he had total ITCs of $4,500. He paid no installments during the period. what's his HST payable or refund?

* (Assuming 13% HST rate in Ontario)

Total Sales and Other Revenues (Line 101) : $50,000

Calculate Net Tax (Line 105) : $50,000 × 0.13* $ 6,500

Input Tax Credits (ITCs) (Line 106) : $ 4,500

Installments (Line 110) : $ 0

HST Payable (Line 113C) : $ 2,000

Once the Canada Revenue Agency (CRA) receives and processes your GST/HST return, they will send you a notice of assessment. Generally, the CRA processes GST/HST returns within two weeks for electronic filings and four weeks for paper returns. You will receive this notice if either the CRA owes you a refund or rebate or your amount owing is more than the payment you made. If there is an amount owing, the CRA will provide Form RC159, Remittance Voucher – Amount Owing – personalized.

Business owners, corporations and charities are required to maintain records and supporting documents including all sales and purchase invoices, all other records related to the business operations and the GST/HST details for six years from the end of the last tax year. In some situations, they may need to retain records indefinitely, especially for long-term acquisitions, disposals, or historical information relevant to business sale, liquidation, or wind-up. In some instances, the CRA may require the entity to maintain records longer than six years. If the entity plans to destroy the records earlier, a request must be submitted to the CRA and wait for the written approval.

For further information please contact Taxtron Support at 416-491-0333 or visit www.taxtron.ca