The net amount (collectible GST, less ITC) is paid to the federal government. In general, all purchasers are required to pay GST for goods and services subject to GST, unless the federal government specifically exempts the purchaser.

Example

Consider a simplified example of a washing machine. The production of a washing machine begins with mining of iron ore used to produce the machine. The mine sells ore to a steel maker for $100, plus $7 GST which is paid to the federal government. In transforming the ore into steel, the steel maker adds $200 (including profits) to its value and sells the steel to the appliance manufacturer for $300. The steel maker charges $21 GST on the sale, but claims ITC of $7 and pays the $14 difference to the federal government. If the appliance manufacturer sells the washing machine to a retailer for $500, the manufacturer charges $35 GST, claims ITC of $21 and pays the difference of $14 to the government. Similarly, GST is charged and refunded at various stages of the production and sale chain until the final sale to the consumer.