What we mean by taxable, zero-rated, and exempt supplies

It is important to know which goods and services are taxable and at what rate. You also need to know which goods and services are exempt from GST/HST.

Taxable goods and services

Goods and services are taxable unless they are specifically listed as exempt. Most goods and services supplied in or imported into Canada are taxed 6% GST, 14% HST or are zero-rated.

GST is a tax that applies to the supply of most goods and services in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Prince Edward Island, North West Territories, Nunavut, and the Yukon.

HST is a tax that applies to the same supplies of goods and services as the GST, in Nova Scotia, New Brunswick, and Newfoundland and Labrador. HST is composed of the GST and the 8% provincial tax. For more information see Harmonized sales tax.

Some goods and services are taxable at 0% (zero-rated). This means GST/HST is not charged on the sale or supply of these goods and services. However, if you are a GST/HST registrant you can claim an input tax credit (ITC) for the GST/HST you pay or owe on purchases and expenses you made to provide zero-rated sales or supplies. To find out which goods and services are zero-rated, see Zero-rated goods and services.

Exempt goods and services

A small number of goods and services are exempt from GST/HST. This means GST/HST is not charged on these supplies. To find out which goods and services are exempt see Exempt goods and services.

If you provide only exempt goods and services, you cannot register for GST/HST. This means that you do not charge GST/HST on your exempt supplies of your goods and services, and you do not claim ITCs.