The Canada Revenue Agency has issued this info sheet to explain how GST or HST will apply to supplies of goods during the transition period, which includes the July 1, 2010 implementation date for HST in Ontario and British Columbia.
The supplies discussed include: sales of goods; sales of a combination of goods and services; sales of periodical publications by subscription; and leases and licences of goods. In order to determine whether GST or HST will apply to goods sold during the period that includes July 1, 2010 (other than subscriptions to periodicals), supplier must consider the following:
- when the goods are delivered to the purchaser;
- when ownership of the goods is transferred to the purchaser;
- when an amount for the goods becomes due; and
- whether an amount is paid without having become due.
For goods supplied by way of lease, licence or similar arrangement, suppliers must consider the following to determine whether GST or HST applies to a particular lease payment:
- the lease interval;
- when an amount becomes due for that lease interval; and
- whether an amount is paid without having become due for that lease interval.
Please see Appendix B in the info sheet for a decision tree which can be used to determine if GST or HST applies to the sale of goods, where possession and ownership of the goods is transferred to the purchaser on or after July 1, 2010. Appendix C illustrates the transitional rules for leased goods where a lease interval begins before July 1, 2010 and ends on or after July 31, 2010.
CRA GI-070