3 Reasons Why You are Getting A GST/HST or QST Refund

When filing your GST/HST and QST returns you might find that you have a refund.  This could be a recurring situation or could happen infrequently.  Some reasons why this might happen:

1. Expenses exceed sales:.  Businesses in the beginning stages often have more expenses than actual sales.
2. Sales are Zero Rated: There are several reasons why you may not have to charge sales taxes on your sales, most notably if you are selling internationally.  In this case, while you have not collected any GST/HST or QST, you are still able to claim the sales taxes paid on expenses.
3. Large purchases: You might have made a large, business related purchase eg. machinery, furniture, computers etc. which you are may claim on your sales tax returns.
4. QST Refund Only: If your business is resident in Quebec, but sells to other provinces, you are not required to charge QST.  However you are still making taxable purchases in Quebec.  In this case QST paid might exceed QST collected.

GST/HST Reporting Frequency Threshold

GST/HST registrants must select their reporting frequency based on their estimated taxable sales as follows:
(Source: CRA Election for Reporting Period Form)

Change in GST-QST Reporting Frequency

There are several reasons you may want to change your GST-QST reporting period including:

• increase in sales may require that you change your reporting period
• you may want to manage cash flow better by reporting more frequently
• business activity may have dimished requiring less reporting
• reduce administration

Note that you can only change the reporting period at the beginning of your fiscal year as the reporting periods must correspond with your fiscal year.  With a couple of exceptions, the forms below are due two months after the end of your fiscal year.

If you are registered for GST-HST, you will have to fill out the Election for GST/HST reporting period

If you are registered for GST-QST, you will have to fill out the FP-620-V Election Respecting the GST/QST reporting period