GST Overview

Exempt Educational Services
SFU GST Accounting
GST on Sales
Purchases
SFU GST #11852 0725
Parking Tax
Hotel Tax
Zero Rated Supplies
GST Rebate Recovery
GST Net Cost

Effective April 1, 2013 the following Federal and Provincial Sales Tax will be reinstated in British Columbia:

•     Federal Goods and Sales Tax (GST) at 5%
•     BC Provincial Sales Tax (PST) at 7%

Simon Fraser University is a registered GST entity defined as a Public Service Body by the Excise branch of the Department of National Revenue. Under the legislation, the term Public Service Body is defined to mean a non-profit organization, charity, municipality, school authority, hospital authority, public college, or university (it does not include government).

The GST rules governing the activity of public sector bodies are complex and this guide will assist with compliance and focus on common issues within a university environment.

Designed to be paid by the ultimate consumer or purchaser, GST is collected/remitted by SFU assuming its obligations as vendor and purchaser. Net GST tax is remitted and reported with periodical GST returns using the SFU Registration number: 11852 0725

Sales of tangible and intangible goods and services and real property are encompassed in the term supply which is the key term to determining if GST is applicable since only the provision of “supply” will attract GST.  It is critical to have an understanding of the tax status of various supplies made and purchased by public sector bodies.

Other tax changes relevant for SFU’s activities and accounting:

Parking tax: increased to 27.05% (GST calculation is applied on base price + 21% parking applied to all South Coast BC Transportation Authority Services as per Translink map: Click here

Hotel tax: 8% (+2% Municipal Tax) remitted under SFU PST registration account # 1000-6004

All B.C. government ministries, agencies, boards, commissions, and Crown corporations will pay

• Non - Participating Provinces (NPP) GST British Columbia, Alberta, Saskatchewan,
  Manitoba, Quebec, Northwest Territories, Yukon & Nunavut

or

• Participating Provinces (PP) HST Ontario, Nova Scotia, New Brunswick, Newfoundland, Prince Edward Island on their purchases of taxable property and services.

Zero-rated supplies are supplies where no GST is payable, but registrant suppliers are able to claim input tax credits in respect of the GST paid on purchases that can reasonably be regarded as attributable to the commercial activity in which the supply of any property that is zero is made. Zero-rates supplies are:

• prescription drugs
• medical devices
• basic groceries
• agriculture and fishing
• exports of goods and services
• travel services
• transportation service
• financial services
• international organizations and officials
• initial sales or importations of precious metals
  

Exempt Educational Services

• Certain fundraising activities by volunteers
• Purchases by one University department from another
• Nominal admissions
• Nil considerations
• Supervised recreational services
• Camp fees
• Membership fees
• Library services
  
  

SFU GST Accounting

Effective April 1, 2013 SFU is reporting GST collected and receivable based on the following general and university specific treatments:

• 67% rebate for purchases related to educational services. With the 67% educational rebate application the 5% GST rate is reduced to 1.65% cost for academic and administrative expenditures or

    5% x (1 - 67%) = 1.65

• A blended rebate rate is applied in cases where departmental activity is both
  commercial and educational    

• If $5 is 5% GST on $100 purchase
  And rebate = 74%, then Cost on GST = $1.45  OR
  Proportion between Commercial vs Educational activities: 12/88
  5%*12% = 0.60 exempt in lieu of ITC for commercial activities
  5%*88% = 4.40 * 67% (educational activities proportion)= $2.95
  Total Cost after Rebate
  $5-$2.95-$.60 = $1.45

• 100% Rebate in lieu of ITC (Input Tax Credit) for purchases related to commercial activities such as Bookstore, Microcomputer Store, Conference Services, Traffic and Security, Food Services, Recreation Services, and any other area that is required to collect GST on its commercial related sales.
  
  
• Self-Assess GST at 5% is applied on taxable importation of goods and Services
  
  
• Place of Supply rules dictate if GST/HST is applicable at 5%, 12% 13%, 14% or 15% depending where supplies bought or sold are consumed.
  

GST on Sales

University departments are responsible to charge GST or HST where it is applicable based on area of consumption and in accordance with Place of Supply rules.

GST/HST dollar amount should be stated separately together with SFU GST number (118520725 RT0001) on all invoices or receipts. State “GST or HST exempt” on invoices or receipts when the sales are tax exempt.

Please use the list of Taxable and Exempt HST supplies provided with this guide and take into account the following:

• Sales charged at nominal value (direct cost with no profit or administration cost
  recovery) are exempt.
• Sales between SFU departments (exclusive of affiliates) are exempt. Charges from
  one university department to another university department or from a university
  department to a research account, trust account, ancillary account (even the account               of a commercial operation) or capital account.
• Sales between SFU and other BC universities are exempt.
• Services provided to external customers are GST or HST taxable.
• The University is recovering 100% Input Tax Credit on zero rated supplies.

The following GL codes are applicable based on Place of Supply rules, see SFU short version and Department of Finance Canada

Purchases

• GST rebate recovery is a PeopleSoft automated calculation using the department accounting code indicated on approved invoices, cheque requisitions and online expense claim forms. The FAST reports of departmental expenditures show the Gross Amount, GST Recovery amount and the cost net of GST recovery under the GL expense column using the following calculation:
• GST net cost

If GST Rebate = 67%, then Cost on GST =   5% x (1-67%) = $1.65

If GST Rebate = 74%, then Cost on HST =   5% x (1-74%) = $1.45 (based on 12/88 Commercial vs Educational activities proportion, see SFU GST Accounting section).       

• Canadian suppliers registered to collect GST must charge GST on taxable transactions.
• Payment Services department will ensure correct tax application.
• Small suppliers (those whose annual sales do not exceed $30,000) are not required to register their business for GST purposes. They do not charge GST and no GST is paid by the University.
• Imported goods and services are subject to GST. Canada Customs will charge GST only when imported goods are physically crossing the border. (Important Note: SFU is required to self-assess for the 7% PST, Payment Services department will self-assess on all imports).
• Some foreign vendors are GST Thompson Ahern and FedEx (SFU custom and duty brokers) charges to avoid duplicate GST payments. The tax on goods will be paid to Canada Customs at the time of import and the net amount, after rebate, will be charged to your department.
• The University is required to self-assess GST on Imported Services and Intangible Property as taxation at the border by Canada Customs is practically impossible. When SFU imports, for use in Canada, items such as computer software, intellectual property rights, royalties, copyright fees or consulting services GST owing must be remitted directly to CRA.