Glossary / GST/HST · Also called Goods and services tax, Harmonized sales tax

How it works

A registered business charges GST or HST on its taxable sales, claims back the GST/HST it paid on business purchases as input tax credits, and sends the difference to the Canada Revenue Agency on its GST/HST return. If the credits are larger than the tax collected, the CRA pays a refund.

You must register once your taxable sales pass $30,000 in a single calendar quarter or over the last four consecutive quarters; below that you are a small supplier and registration is optional. Some supplies are zero-rated (taxable at 0%, such as basic groceries and most exports) and some are exempt (such as most residential rent). Filing is monthly, quarterly or annual depending on your sales.

Worked example: A quarter for an Ontario contractor

A contractor in Ontario bills $40,000 plus 13% HST, so collects $5,200. During the quarter it pays $1,300 in HST on materials and $260 on a new tool. Its input tax credits are $1,560. The net tax on its return is $5,200 - $1,560 = $3,640.

Line	Amount
HST collected on sales	$5,200
Input tax credits (materials and tool)	-$1,560
Net tax owing	$3,640

In AcboBooks

A Canadian company in AcboBooks gets GST or HST tax rates for its province, tracks the GST/HST on bills and cheques as input tax credits, and the Sales Tax Liability report gives the GST/HST return lines for the period with credits netted. You file through CRA My Business Account and record the payment or refund under Vendors, File GST/HST Return.

Related terms

Related on this site

Sources

Updated October 25, 2026. General information, not tax, legal or accounting advice. Rules and rates change; check with the IRS, the CRA, your state or province, or your accountant.

Back to the full glossary

GST/HST