GST Exempt Services

by Dave
(St-Hyacinthe, Canada)

First off, I'd like to thank you for all the wonderful information found on your website!

Here is my question:

I'm planning on starting my own fitness training business and I was reading your article .

Basically, I'd like to know if my services are exempt from tax (since most health care services are) ...

... and if my services are indeed exempt, can I still claim ITCs for goods and services purchased for my business even if I don't collect any taxes? (Sorry if this seems complicated ...).

Thank you very much, and keep up the great website.



Hi Dave,

Thanks so much for asking this question ... and I'm delighted that you are finding my site helpful. :0)

Your services are NOT exempt from GST ... in fact, almost every service has to charge GST/HST unless they are specifically exempt or zero rated.

I'm giving you two links to the CRA website. The first is where exempt healthcare services are listed ... and I don't think personal training qualifies as it is not specifically listed.

The second link explains what services are taxable.

These links will help you make your own decision on that. If you are still in doubt after reading these references, you can phone CRA for clarification.

  1. GST Memoranda 300-4-2 GST Exempt Health Care Services

    "The following services are exempt when made by a practitioner of the service: optometric services, chiropractic services, physiotherapy services, chiropodic services, podiatric services, osteopathic services, audiological services, speech-therapy services, occupational therapy services, and psychological services when provided by a practitioner who is registered in the Canadian Register of Health Service Providers in Psychology."

  2. What we mean by taxable, zero-rated, and exempt supplies?


This is a bit off topic ... but I came across this training website awhile back that might be useful to you as you start up your personal training business. It is located at www.starting-a-personal-training-business.com.

All the best with your new venture ... and if you have any more questions ... I'd welcome them.

Comments for GST Exempt Services

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Feb 10, 2010
Claiming ITCs
by: Dave

Wow. Thanks for the quick response!

I guess I'll charge GST/HST for my services, even if I'll be under the 30K limit, to enable me to claim ITCs.

Thanks again.

Feb 10, 2010
Voluntary HST/ GST Registration
by: Lake, Bookkeeping Essentials

Dave,

I just wanted to remind you (you probably already know this but just in case you don't) ... you have to be registered with CRA before you can begin collecting GST ...

... and you cannot collect ITCs for expenses or start-up costs incurred prior to registering with CRA.

Jan 18, 2011
HST return
by: jjote

This is my first time to handle my son's new business in graphic services and to advise him how to prepare his invoice when he bills his clients, particularly the inclusion of the HST computation.

I read in your post on Regular Method for filing HST return the line-by-line explanation for filling up the return. Isn't there a line 106 too for filling up the input tax credits on his purchases?

So by including line 106, this will reduce his amount payable for HST?

Thanks for your advice. Hope to receive your response soon as he's now preparing his billings to finished projects.

Just got into this website...wow! I foresee a lot of things I can learn here. And especially, I want to start Quickbooks to his business.

Jan 19, 2011
HST Return
by: Lake

Yes there is a line 106. Line 106 and 107 total to line 108 Total ITCs and Adjustments.

Jan 19, 2011
Invoicing at Cost
by: jjote

There is a company (Co. A)who is going to furnish my son's business with graphic materials. To gain a foothold w/ Co. B, he wants to charge it w/ same cost. In effect, the invoices issued by Co. A will be the same as the one issued to Co. B. Thus, zero amount in the HST return for the same transaction.

Can he do this?

Thanks again and for the quick response to my previous question.

Jan 20, 2011
Invoicing at Cost
by: Lake

Even though HST collected will equal ITCs, you still have to report both.

Make sure you take time to learn about what expenses are deductible for tax purposes.

Jan 30, 2011
HST return
by: jjote

If a supplier's invoice does not show HST on the total amount payable, can we assume that it's already incorporated in the amount. Can we compute the HST which we can assume (if we can) by dividing it by 1.13% to get the gross before HST?

Can we then proceed to treat the computed (built in) HST as ITC to claim vs the HST on the sale of the item to a client.

If a supplier's invoice does not show HST, is it because it has not registered for HST? If it isn't registered, can we claim a computed ITC as I mentioned above?

Thanks again for your time and patience.

Jan 31, 2011
GST/HST Invoicing Requirements
by: Lake

CRA requires certain information on a receipt before you can use it to support a claim for input tax credits.

The CRA website says, "If your customers ask you for an invoice or receipt to claim an ITC, depending on the amount of the sale, you are required by law to give them the [required] information."

I have summarized the required invoice information in my chat on audit trails.

If GST/HST does NOT show on your invoice, you CANNOT assume you were charged the sales tax ... because as you pointed out, not every business is a GST/HST registrant.

If a business is not registered with CRA, they cannot collect GST/HST. If they can't charge you the sales tax, you did not pay it ... and therefore you do not have an input tax credit to claim.

Does that makes sense?

Jan 31, 2011
HST return
by: jjote

Thanks again for the quick response. I think it's making sense, but STILL, another follow-up query, may I?

My next question: (I'm sorry if I seem to be pursuing this subject, like endlessly...)

I'm looking at an invoice which was billed to our company (as I said before, I'm just starting to record my son's self-employed business), which did not show HST. Then he invoiced the same items (needed by a client for graphic production) with a markup plus HST. His business is already HST-registered.

Q: Is he required to charge HST on his invoice to the client when he was not charged HST on his purchases (assuming it was not built in to the supplier's invoice or the supplier is not registered), OR, can he choose not to charge HST (not collect) from the client, hence not pay, GST on the transaction.

Jan 31, 2011
GST/HST Registrants
by: Lake

Once you have registered for GST/HST, you must collect the sales tax on all sales of goods and services unless they fall under CRA's definition of zero rated or exempt.

Whether the supplies you purchased attracted the sales tax does not factor into it.

You can go onto CRA's website to verify if the supplier is GST/HST registered.

If the supplier is registered, call them and get them to send you a new invoice with the information you require to claim your ITC.

Feb 01, 2011
HST return
by: jjote

Oops..I just noticed that the supplier is a US-based company, thus not covered by our HST rules(?)

So again, as you previously said, it DOES MAKE SENSE, that if the business did not pay any HST on its purchases, it cannot claim ITC for offset on its HST payable on invoices to clients. (BTW, is there any way that a tax offset can be claimed for doing business with US-based suppliers?)

Got it now..thanks again...will come back again to haunt this forum, as I foresee more roadblocks to this my 1st time to do bookkeeping. (and to put in my donation), for all the immense effort and dedication your site is giving to PEOPLE IN TROUBLED WATERS (that's me!)

Feb 01, 2011
US Sales
by: Lake

U.S. sales/customers should be setup as zero rated. This means they do attract the GST/HST ... but the rate is currently set to zero percent.

In many cases, purchase of U.S. goods and services also attract zero per cent if the business does not have a Canadian presence.

So your tax offset on U.S. transactions are $0 tax collected - $0 tax paid on purchases = $0 sales tax paid.

Loved having you visit my site ... and any donation you make (and other visitors too!) is truly appreciated! :0)

I can foresee at some point in the future (not sure when) where I will no longer be able to provide this service (answer questions for free) if running this site does not begin to pay for itself because it takes me away from paying work.

Mar 26, 2012
Health Care
by: Anonymous

I have a friend that is engaged in a health care business. She franchised her business. I'm quite sure the company is GST/HST exempt.

My question now is how would she be able to claim the ITC's?



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When you are GST Exempt, you cannot claim ITCs. Click here to see a summary table of how it works.

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