Tax Tip:   Regarding GST/HST

Some points mentioned include:

  1. The 2013 Federal Budget expands the exemption for homecare services made after March 21, 2013 to include publicly subsidized or funded personal care services, rendered to an individual who, due to age, infirmity or disability, requires such assistance at home.
    Accordingly, the Budget adds a new term, “home care service”, which includes personal care services such as bathing, feeding and assistance with dressing and taking medication. Also included are household services such as cleaning, laundering, meal preparation, and child care.
    Where a service provider charges GST/HST on an exempt supply of a homecare service made after March 21, 2013, the supplier may refund or credit the GST/HST to the purchaser. Alternatively, purchasers who have paid an amount as GST/HST on exempt supplies may claim a rebate of tax paid in error using Form GST189.
  2. Currently, basic business identification information is required to be provided at the time of GST/HST Registration. This includes the legal and operating name of the business, type of ownership, ownership details, business activity, and contact information.
    In the likely future, the Minister of National Revenue will have the discretionary authority to withhold the payment of GST/HST refunds to a person until all of the person’s prescribed business identification information has been provided and is accurate.
  3. CRA discusses music programs and notes that the supply of a service of tutoring or instructing an individual in music lessons is exempt from the GST/HST.
    Music lessons involve formal instruction that develops skills in musical performance involving the use of the human voice or musical instruments, conducting an orchestra, or musical composition.

Whether a particular activity or program is a music lesson is a question of fact. The CRA has developed a number of questions to help make this determination. See Excise GST/HST News No. 88 for the criteria.

Action Item: The GST/HST rules change frequently. A regular review of your accounting systems to ensure they properly identify GST/HST on your invoices, and on your expenditures, can avoid costly errors.