News and Insights

Ontario Tax Tip, “Prepare for Ontario’s HST: # 18 – Returned or Exchanged Goods”

Tax Development Jul 08, 2010

Ontario has issued this tax tip which provides information to help Retail Sales Tax (RST) vendors understand how to handle returned or exchanged goods after the implementation of the HST, where the goods were purchased before July 1, 2010.

If a customer purchased goods prior to July 1, 2010 that were subject to RST, and returns or exchanges these goods after June 30, 2010, but before November 1, 2010, where goods are returned and a full or partial refund is given, RST will be refunded.  If an exchange results in neither a refund nor an additional payment, no RST will be refunded and no HST will be charged.  However, if RST did not apply to the goods purchased before July 1, 2010 and the goods are exchanged on or after July 1, 2010, then the provincial component of the HST will apply to the full price of the replacement goods.  

If a customer returns goods on or after November 1, 2010 that were purchased before July 1, 2010 and paid the RST, the customer must apply for a refund of the RST directly with the Ministry of Revenue.  

ON HST Tax Tip No 18
ON General Refund Application