BC Residents Will See Their GST Credit Cheques Reduced as of April 2013

As a result of reverting from the HST back to the GST and PST system in BC, the provincial HST Credit has been abolished.

The last payment of the credit was included with the January GST Credit cheques issued by Canada Revenue. The April cheques included the federal GST credit plus the British Columbia Low Income Climate Tax Credit (if applicable), but do not include the British Columbia HST Credit.

The change back  to the old GST/PST regime followed a favourable vote in the 2011 petition to repeal the HST. BC reverted to GST and PST as of April 1, 2013. For retailers this means that HST is no longer collected and if the transaction is subject to PST then PST will have to be collected and remitted to the province. 

For business, in addition to the costs of collecting, accounting for, and remitting the sales tax, their actual cost for most expenses has now increased. Previously the HST paid was refunded via an input tax credit. The costs of PST are deductible but not refundable. The net result is a higher cost and therefore a lower margin.

For consumers the sum of the taxes is the same but certain transactions which were subject to HST will not be subject to PST, such as restaurant meals and most services. For some purchases then, the taxes will be reduced. To offset this, the provincial HST credit has been eliminated but the old provincial sales tax credit has not be re-instituted.

For tax preparers, this change in taxation as of April 1 will mean that employment expenses will have to be tallied for the period January to March and for April to December. Expenses prior to April will be subject to HST and be eligible for the 12/112 HST rebate on GST370 but expenses incurred after March will be subject to GST and will be eligible for the 8/108 GST rebate on GST370.