Liberals, NDP pass bill to enact two-month GST holiday in House of Commons
CICC responds to GST holiday bill
The Convenience Industry Council of Canada (CICC) had earlier raised concerns about the GST holiday when it was announced. It said while many of the items that are eligible for GST exemption are sold in convenience stores, “we have outstanding questions about application to certain products including energy drinks. The response from business groups has been mixed, with Canadian Federation of Independent Business pointing to product applicability and implementation confusion. Restaurants Canada and Retail Council of Canada have supported the proposal.”
Upon the announcement of the "Tax Break for all Canadians Act” moving from the House of Commons to the Senate the CICC said it has taken many questions from its members in regards to the proposed GST holiday and what items are to be covered.
Currently energy drinks and isotonic (sport) drinks such as Gatorade, PowerAde and Body Armor are included, while other eligible beverages such as Boost, Muscle Milk, and Vitamin Water are believed to be included. The CICC is still seeking clarification around items that can be classified as “Dietary Supplements”, such as protein powder and vitamins.
For its members, the CICC also made available a set of key recommendations and considerations that convenience store operators will have to deal with:
- Compliance and implementation – Be prepared to implement the temporary GST/HST relief changes at checkout. This includes reviewing product tax categorization against the list of qualifying goods, preparing to update POS systems to remove the GST/HST on qualifying goods and ensuring that staff are trained on the new procedures. However, the tight timeline for making these updates and providing training, especially for smaller businesses with limited resources or businesses with complex POS systems may restrict how quickly and effectively businesses can implement these changes.
- Documentation and record-keeping – Maintain accurate records of sales transactions during the relief period to ensure compliance with the temporary tax break. This includes documenting the qualifying goods sold and the GST/HST relief applied. Proper documentation will be crucial for audit purposes and to avoid potential disputes with the CRA. Also, be prepared for the December 2024 and February 2025 monthly GST/HST returns to be more complex because the relief period starts and ends mid-month.
- Communication with customers – To ensure a smooth transition, you must be prepared to communicate the GST/HST relief to your customers once further details are released.
- Importation of qualifying goods – As the GST/HST relief will also apply to the importation of qualifying goods during the relief period, businesses and/or consumers that import these goods must be aware of the relief and comply with the necessary documentation and reporting requirements to ensure that the GST/HST is not overpaid when the goods are imported into Canada. This may require importers to carefully review the import documentation prepared by the customs broker, since the import GST/HST is commonly paid by the broker on the importer’s behalf.
With files from the CICC