June Billings & HST Transition Rules
I was speaking with a service provider (marketing advisory services) in Ontario the other day about her June 2010 billings. She said that she will be sending out invoices on June 15, 2010 in respect of services to be provided between July 1, 2010 - July 31, 2010. She does not currently charge Ontario retail sales tax on her advisory services. She asked me whether she is required to charge Ontario harmonized sales tax (HST).
The answer is yes (assuming the client being billed is located in the province of Ontario). ABC Co. would charge GST on her marketing advisory services. She would remit the GST with her GST return for the period June 1, 2010-June 30, 2010 (she is a monthly filer).
She would also add HST to the invoices. However, she would remit the HST collected with the GST/HST return for the post-HST implementation period being her July 1-July 31, 2010 GST/HST return, which is due at the end of August 2010. She does not include the HST in the GST/HST return that she files in July even though the HST was invoiced in June 2010.
Yes, there is an unusual delay in the remittance of the HST. This is because the HST must go into the HST pot so that it can be properly allocated to the HST Zone provinces (including Ontario). If the HST is remitted to the Government of Canada in July, Premier McGuinty does not get any of the money. Also, the supplier would be making a mistake and may be penalized at the time of an audit.
Cyndee Todgham Cherniak is counsel to and in affiliation with the International Trade Law and the Tax Law (Commodity Tax
