Update on Temporary GST/HST Measures
The Temporary GST/HST Measures, previously announced, have now been enacted into law. The initial update from December 2nd (below) contains much of the relevant information but in addition the following clarifications have been made.
The definitions of ‘paid in full’ and ‘delivered’ play an important role in determining whether a purchase or sale meets the criteria for the temporary measures.
Both need to be met to have an item qualify to be exempt from GST/HST.
- Qualifying items need to be paid for in full between December 14, 2024, and February 15, 2025.
- If there are partial payments – all payments are to be received during the holiday period.
- If there was a deposit received before December 14, 2024, the item would still qualify if the remaining amounts were paid for, and the item is delivered/made available during the holiday period.
- Qualifying items need to be delivered or made available to the buyer between December 14, 2024, and February 15, 2025.
Sales: For qualifying items that Queen’s University sells, and would normally collect HST on, – during the holiday period those qualifying items would become zero-rated. This means when the sale is made the tax rate would be 0%.
Further information has also been provided and is available on the CRA website:
GST/HST holiday tax break - Canada.ca
In addition to the details of the legislation below are a couple important reminders when making purchases or requesting reimbursement for qualifying items:
ERS & Individual TCards
- Selecting the appropriate expense type is crucial to avoid non-recoverable tax being added to your expenses in error.
- Please ensure receipts reflect the proper tax treatment.
- It is imperative that reimbursement claims for purchases made within the GST/HST Holiday period are submitted as soon as possible AND within 30 days following the completion of each trip or the date the expense was incurred. This is in accordance with the Travel and Expense Reimbursement Policy and necessary in order to correctly claim the rebates and credits with CRA on these expenses.
acQuire
- Selecting the appropriate commodity code is crucial to avoid non-recoverable tax being added to your expenses in error.
- Please ensure quotes and invoices reflect the proper tax treatment.
PCards & Departmental TCards
- Please ensure receipts reflect the proper tax treatment.
FAQ’s
- What is the GST/HST Holiday?
The GST/HST Holiday is a temporary measure announced by the Canadian federal government, exempting the Goods and Services Tax (GST) or Harmonized Sales Tax (HST) on specific items from December 14, 2024, to February 15, 2025.
- What items are eligible for the GST/HST exemption?
Eligible items include prepared foods (e.g., vegetable trays, pre-made meals), restaurant meals, snacks, children's clothing and footwear, children’s toys, books, print newspapers, and Christmas trees, among others. Please visit the government's website for a complete list.
- Do we need to adjust our point-of-sale (POS) systems?
Yes, ensure that your POS system reflects the temporary GST/HST exemption to avoid inadvertently charging tax on eligible items. Consult your software provider for assistance if necessary.
- What if GST/HST is mistakenly charged during the tax exemption period?
If GST/HST is mistakenly charged, you may need to issue refunds to customers or request refunds for tax paid on purchases in error. Ensure that your accounting and sales records are corrected promptly.
- How should items being returned before, during and after the GST/HST holiday be treated?
Returns will be processed based on the tax rules in effect at the time of purchase. If you return an item and repurchase it after the holiday, standard GST/HST rates will apply.
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As many of you will have heard, the government recently announced a proposal for temporary GST/HST relief that may impact your department. The legislation is working its way through Parliament and the below is information that will be required under the assumption that is passes as currently articulated.
What do we know today?
Based on the information released to date, during the period December 14, 2024, to February 15, 2025, there will be GST/HST relief on a limited list of qualifying goods. The expectation is that the GST/HST on these qualifying goods is to be removed at the point of sale. This means that departments and faculties will not collect GST/HST on sales of qualifying goods made during this period nor should they pay GST/HST on purchase of qualifying goods made during this period.
The proposal identifies qualifying goods, as:
- Children’s clothing
- Children’s footwear
- Print newspapers
- Printed books
- Food and beverages, including restaurant meals, alcohol, and groceries
- Certain children’s toys
- Jigsaw puzzles
- Certain video games and related accessories
It is important to note that this list is not exhaustive. Please see the Backgrounder released by the Department of Finance for more announcement details.
What should you be doing and who can help?
Sales:
Evaluate your operations and determine if you sell any of qualifying goods identified above (and in the backgrounder). If you do, you will need to ensure that during the period December 14, 2024, to February 15, 2025, you are not charging/collecting HST at the point of sale. If you have questions regarding whether your goods qualify or if you have questions about HST on external sales in general, please contact hst.help@queensu.ca.
You will also want to be ready with clear communication that can be provided to teams to be able to answer questions from customers about how this affects their purchases. FAQs will be available once the final details are confirmed.
Purchases:
If you plan to make purchases of qualifying goods during the period December 14, 2024, to February 15, 2025, you will also need to evaluate that tax has been appropriately assessed by the vendor/supplier/etc. Since purchases can take many forms please see below for considerations by method of payment:
- acQuire – ensure that quotes and invoices for purchases of qualifying goods purchased during the relief period reflect the proper tax treatment. Accounts Payable will also be monitoring this based on commodity codes so it is important to code purchases properly. Contact accounts.payable@queensu.ca with questions.
- PCards & Departmental TCards – ensure that transactions related to qualifying goods purchased during the relief period reflect the proper tax treatment. This means ensuring the bill or invoice you are paying with a PCARD/TCARD correctly excludes GST/HST on purchases of qualified goods. The Procurement team will be monitoring the transactions and adjust tax treatment where necessary before uploading into PeopleSoft. Contact creditcards@queensu.ca with questions.
- ERS & Individual TCards – ensure that the purchase of qualified goods during the relief period, and their receipts, reflect the proper tax treatments. General Accounting will review the rebates calculated and uploaded into PeopleSoft and will process an adjusting entry as needed. It is important that correct expense type are selected when preparing the reimbursement claim. For example, if there are food purchases the expense type should be meals, business meals, etc. Claims should also be submitted as close to the time of purchase as possible. Since the relief window is only temporary it will be even more important to submit reimbursement claims in a timely manner. Contact expenses@queensu.ca with questions.
When will we know more?
Once the CRA releases further details, detailed guidelines and FAQs will be distributed to the community to help in your efforts to navigate this temporary change.
Thank you for your cooperation as we adapt to this change.
If you have any questions or require clarification, please do not hesitate to email hst.help@queensu.ca.