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Each province has its own legislation which determines its own PST rate as well as which goods and services are exempt from PST. The appropriate Provincial Sales Tax is based upon the destination of the goods or services, not their origin.
The supplier is responsible for charging and collecting PST. If, however, the
goods or services are purchased for resale, the supplier is not required to
charge PST on the basis of the purchaser’s licensed PST registration number. Most provinces, however, require that the supplier
maintain a PST exemption certificate for customers who claim exempt status.
PST is payable by the ultimate consumer and is levied only once (except in
Quebec). For example, the purchase of office supplies by a manufacturer for its
own consumption is subject to PST, but office supplies purchased for resale are
not.
Provincial taxes paid to the purchaser are not recoverable and therefore
become part of the cost of the goods and services purchased (except in Quebec).
Sales of goods that are delivered by the supplier to destinations outside the
province are exempt from PST within the province where the supplier is located;
however, these goods are subject to PST in the province where they are
consumed. If a company ships goods to three provinces, that company must comply with
the collection and remittance of three different provincial sales taxes (where
applicable) to each of the three provincial tax authorities.
Note: This example assumes that the supplier has a registered permanent
establishment in each ship-to province. If the supplier is not registered in the ship-to
province, no provincial sales tax is charged on the sale to that province. In
this case, the customer is required to self-assess and remit the applicable
provincial sales tax.
There might be a situation when a supplier not only sells to a PST-exempt
distributor (who then sells to the ultimate consumer, responsible for PST), but
also sells directly to the same consumer as the distributor.
For example, when Madewell, Inc bills and ships goods to PST-exempt Value
Hardware, no PST applies. If, however, Value Hardware resells to Best Cleaning
Supplies, it is Value Hardware
If, however, Madewell, Inc also sells directly to Value Hardware (whose
ship-to location is one of the supplier
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