The Legal Guide: GST/HST Return

On a quarterly or annual basis, you must collect and return sales tax to the Canada Revenue Agency.

March 23, 2022

Do you know one of the many rules set by the CRA is to return the GST/HST on time? Like if your business is registered for the GST/HST program, you must calculate and submit your income tax for each GST/HST reporting period on your GST/HST return. Even if your business did not generate any sales in Canada, did not collect any GST/HST, and did not pay any GST/HST, you must still file a Nil return. The Canada Revenue Agency will not know that your firm owes no taxes unless you file a Nil return. To return the correct GST/HST to the CRA, you must follow the rules and regulations. We know this process is complicated and requires a proper understanding to deal with it. Don't worry about that; Yogi & Associates are here for you to assist you in understanding the whole process.

What is a GST Number?

The goods and services tax (GST) is a consumption tax imposed on the majority of goods and services sold in Canada and real estate (land, buildings) and intangible personal property. 

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What is a HST Number?

The harmonized sales tax (HST) is a consumption tax imposed on Canadian residents and businesses. It blends the federal sales tax with a variety of provincial sales taxes. The HST rate on goods and services in Mississauga is 13%.

GST/HST Return:

Many cities like Mississauga have the same policy of returning GST/HST to the CRA on time. You are required to return GST/HST to CRA after collecting it. Depending on your business situation, you can replace it annually, monthly, or quarterly. You cannot keep these funds to yourself as it is taken from someone, and it is a 'trust fund' that CRA treats very seriously.

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As Zig Zilar said once: "If people like you, they'll listen to you, but if they trust you, they'll do business with you."

If you want to learn about the penalties for filing late GST/HST, you can go to our website and see this article Listing the Penalties for Filing Late GST/HST

How to Calculate GST/HST?

There are two methods to calculate how much GST/HST you have to submit to the CRA.

  1. The Regular Method
  2. The Quick Method

1. The Regular Method:

In this method, you keep track of how much GST/HST you collected; then, you count up your Input Tax Credits which are GST and HST you paid on business expenses, and remove that amount from the total GST and HST you earned from customers. The difference is paid to the Canada Revenue Agency (CRA).

2. The Quick Method:

You pay CRA a certain percentage of your total sales in this method. The amount will be determined by your total earnings, the type of business, and your business location.

Three Things You Must Know To Complete GST/HST Return:

  1. Your total sale (taxable or non-taxable) during the reporting period.
  2. The total amount of GST/HST you collected during the reporting period.
  3. The total amount of GST/HST installments paid over the reporting period.

When Do You File GST/HST Return?

The Canada Revenue Agency (CRA) expects you to file a GST/HST Return once a year. But you can submit it continuously if that suits you; it's your choice. The CRA will issue you a customized GST or HST return form after registering for your GST/HST number, which will specify the deadline for filing your return.

  1. If you are a sole owner, the date for filing your GST/HST return to the CRA relates to your income tax return deadline. Therefore, the date for filing your GST/HST return will be stated on your income tax return form.
  2. You have to file your GST/HST return for corporate business by the end of the fiscal year. For example, if your company has a calendar fiscal year which is December 31st, you have to file your GST/HST by June 15th, and you should submit your GST/HST by April 30th next year.
  3. If your business has a non-calendar fiscal year, you have to file your GST/HST three months after your fiscal year ends. While most companies file their GST/HST returns once a year, some file more regularly, such as monthly or quarterly.

How Do You File GST/HST Return?

There are three ways to file GST/HST return:

  1. Electronically
  2. TELEFILE
  3. Via Paper

1. Electronically:

There are four ways to file GST/HST online:

  • NETFILE
  • My Business Account
  • Represent a Client
  • Electronic Data Interchange

NETFILE:

GST/HST NETFILE is an online program that allows you to file your GST/HST return online to the Canada revenue agency.

My Business Account:

It is a secure platform that lets you connect with the Canada Revenue Agency (CRA) electronically on various business accounts. GST/HST, payroll, corporation income taxes, excise taxes, excise charges, and other business accounts.

Represent a Client:

With this program, you can get all kinds of tax information for yourself and your business.

Electronic Data Interchange:

GST/HST EDI is a program that allows you to electronically pay the GST/HST return through participating in a Canadian financial institution.

2. TELEFILE:

GST/HST TELEFILE is a quick, free, and simple filing option that allows you to file your GST/HST returns using their touch-tone phone and a toll-free number quickly.

3. Via Paper:

You can file your GST/HST through mail or in person at a participating financial institution.

You cannot file GST/HST at a participating financial institution if:

  • You are seeking a refund
  • You are filing a nil return
  • You get a refund to cover the amount you owe on your return

Bottom Line:

It's critical to register for GST/HST as soon as possible so that you can submit GST/HST to the CRA on time. Don't hesitate to contact Yogi & Associates, as our branch is in Mississauga, for help with GST/HST returns to the Canada Revenue Agency. Our experts will assist you in completing all areas of the tax return, including calculating the correct amount and submitting it on time.

Rafia Khalil

Executive Journalist

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