Changes to the GST HST Return. May 16, 2016, the Canada Revenue Agency (CRA) changed the way businesses report income information on line 101 of the GST34-3 Goods and Services Tax/Harmonized Sales Tax (GST/HST) form. This impacted businesses that report sales that include zero-rated supplies made in Canada, exempt supplies and zero-rated exports. Each of these items will now be reported separately in the electronic GST/HST return. Before May 16, 2016, these sales were included together on line 101 of the return. As stated by the CRA these GST/HST return changes are meant to help the CRA in determining your filing frequencies and mandatory electronic filing requirements.
Also in Spring 2018, the CRA posted changes to the “Delivery of the Goods and Services Tax/ Harmonized Sales Tax (GST/HST) return for paper filers”. These changes impacted registrants in terms of how often they received their GST34-3 and what they received with it.
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101 Line CRA – Sale and Other Revenue
What to include on line 101 of GST return?
According to the CRA Guide: “You are being asked if you want to report one or more of the following types of sales on your return:
- exempt supplies, zero-rated exports, goodwill, financial services, sales of capital real property, and supplies made outside of Canada; or
- taxable sales of my associates (including zero-rated supplies) made in Canada.
This information is used to help calculate your reporting period threshold amount.”
Instructions for Online Returns
Instructions for Paper Returns
“If you choose to do so, you will be asked to complete new lines 90, 91, and 102. If you choose not to do so, follow the line 101 instructions for filing a paper GST/HST return using the regular in method
Enter the total of your taxable sales including zero-rated supplies (other than zero‑rated exports) made in Canada for this reporting period. If you have nothing to report, enter “0”.
Enter the total of your exempt supplies, zero-rated exports, and other sales and revenue for this reporting period. Other sales and revenue include goodwill, financial services, sales of capital real property, and supplies made outside of Canada. If you have nothing to report, enter “0”.
Line 101 is populated based on what is entered on lines 90 and 91. To make sure your reporting period stays accurate, put your supplies and sales on the correct lines. Reporting periods are generally determined based on the total of your reported taxable supplies and the supplies of any associates.
Enter your associates’ total of all taxable sales and other revenues including zero-rated supplies (other than zero‑rated exports) made in Canada for this reporting period. If you have nothing to report, enter “0”.”
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 provincial sales tax, GST, HST, or any amounts you reported on a previous return. Round off the amount to the nearest dollar. Enter this amount on Part 2 of the return that you take to the bank with your payment or that you send to us. Enter a “0” if you have no revenue to report.”
New reporting lines on Form GST34-3
The problem has been that when total revenue from all sources is calculated and included on line 101 of the return, it often creates a large discrepancy between that amount and the HST remitted to cover it. This has led to frequent and mostly unnecessary audits by Revenue Canada to ensure proper compliance. By adding 3 lines to the form, the intent is to reduce the discrepancy issue and the number of audits. The breakdown is as follows:
- Line 90 is for reporting taxable sales (including zero-rated supplies) made in Canada.
- Line 91 is for reporting exempt supplies, zero-rated exports, and other sales and revenue.
- Line 102 is for reporting, when applicable, an associate’s taxable sales (including zero-rated supplies) made in Canada.
The first two lines are intended to address this issue. The third line has to do with filing frequencies for larger companies and their associated companies, not part of this discussion.
Who Registers for the GST/HST?
GST/HST registrants include anyone that provides taxable supplies in Canada and is not a smaller supplier. GST/HST registrants generally, “have to charge and collect the GST/HST on taxable supplies (other than zero-rated supplies) you make in Canada and file regular GST/HST returns to report that tax.”
Make changes to a GST/HST account
If you qualify, you can view or make changes to your GST/HST business account reporting period online. Accounts can be accessed by employees and representatives on behalf of business clients and employers. Changes can also be made using the Form GST20, Election for GST/HST Reporting Period.
HST Reporting Period
Usually, the assigned reporting period is based on your annual total revenue m your annual taxable supplies of property and services made in Canada in the immediately preceding fiscal year or in all preceding fiscal quarters ending in a fiscal year. The following chart shows the assigned reporting periods based on your revenues and the options available.
|Annual Taxable Supplies||Assigned reporting period||Optional reporting period|
|$1,500,000 or less||Annual||Monthly or Quarterly|
|More than $1,500,000 up to $6,000,000||Quarterly||Monthly|
|More than $6,000,000||Monthly||Nil|
|Charities||Annual||Monthly or Quarterly|
|Listed Financial Institutions (except if deemed to be a listed financial institution)||Annual||Monthly or Quarterly|
This will help determine how many times a year you have to file GST/HST returns.
Businesses that charge, collect and remit HST here in Ontario are used to charging 13% on most products and services. There are exceptions. Some services are HST exempt such as health, medical and dental services, bridge, road and ferry tolls and many educational services. No HST is charged on them.
Other goods and services are considered zero-rated meaning that HST is charged but at a rate of 0%. Goods and services here include basic groceries, prescription drugs and medical devices such as hearing aids and artificial teeth. It also includes products that would be taxed at full rate except that they are being exported. If you’re scratching your heads regarding the difference between exempt and zero-rated, I’m sure you’re not alone. Regardless, it is what it is.
There are other exceptions but if they apply to you, no doubt you already know it.