Place-of-supply rules (GST/HST)

A business that sells to customers in more than one province has to know where each sale is treated as made before it knows what to charge. A buyer reviewing the seller’s returns meets the same question. It is one of the checks in how to check HST compliance when buying a business.

What the CRA and the Act say

The CRA gives an example: a laptop delivered in Nova Scotia has Nova Scotia as its place of supply, while the same laptop picked up in Winnipeg has Manitoba, which the CRA calls a non-participating province. Under the Excise Tax Act, the recipient of a taxable supply made in a participating province pays, in addition to the federal tax, tax at the tax rate for that province, subject to Part IX (s. 165(2)).

What to ask

• In which provinces and territories does the business make its sales?
• How did the seller decide the place of supply for each type of sale, such as goods shipped, picked up or services?
• Did the seller’s returns apply the rate for that place?

This entry covers the CRA’s Nova Scotia and Manitoba examples and the federal Act only. The CRA points to a detailed place-of-supply page, so check the rules for the places where the business sells. See also GST/HST registration.