PROVINCIAL SALES TAXES (PST)

NPF ENTITIES AS VENDORS

1. As a matter of policy, the Department has stated that provincial tax will, where applicable, be collected and remitted on the sale of merchandise and services and NPF fixed assets in messes, CANEX, Base Fund, and other NPF organizations.

RESPONSIBILITIES

2. The rates of tax and the methods of collecting retail sales taxes vary from province to province, and the BComd shall ensure that messes, CANEX, Base Fund, and other NPF organizations comply with the Provincial Sales Tax Regulations of the province in which they are located.

3. Where retail sales tax statutes have been enacted, the RAM shall:

   1. ascertain the effect of such legislation on the classes of goods sold by messes, CANEX, Base Fund, and other NPF organizations at the bases within the his/her accounting region;

   2. ensure that personnel concerned with the management and operation of messes, CANEX, Base Fund, and other NPF organizations are instructed in the manner in which the retail sales taxes are to be collected; and

   3. ensure that the tax is being collected and remitted in the prescribed manner.

   

4. The RAM shall ensure that:

   1. Adequate accounting measures are in effect to ensure that all sales taxes collected in messes, CANEX, Base Fund, and other NPF organizations are received by the NPFAS;

   2. the necessary forms and returns are prepared to remit the correct amount of the taxes collected when due; and

   3. the accounting arrangements and records maintained are of such a nature as to be readily auditable by the provincial authorities when required.

5. The procedures for calculating, recording, collecting, and remitting sales taxes differ according to provincial statutes and type of activity. The factors to be considered and the policy relating to each circumstance are set forth hereunder:

   1. where the provincial tax is paid at the time of purchase by the unit, whether based upon the cost price or proposed selling price, this prepaid tax shall be debited to "Accounts Payable - PST". When the PST is collected at the time of sale, and credited to this account, only the net amount is due to the province;

   2. where the provincial tax is collected and due to the province at the time of sale and a cash register equipped with a separate key for tax is in use, the tax shall be identified on the sales report and recorded as a liability when the sales report is actioned by the NPFAS;

   3. where the provincial tax is collected and due to the province, at the time of sale, and either no cash register is used or the equipment does not have a separate key for tax, the PST charges applicable to liquor and food sales must be calculated and collected from the consumer and identified in a manner acceptable to the provincial authorities.

NPF PURCHASES FOR RESALE

6. To obtain exemption from sales tax for goods and service purchased for resale, the applicable NPF retailer's permit number must be quoted on the purchase document. The sales tax will then be collected at the time of sale by the NPF outlet and subsequently remitted directly to the province in accordance with the applicable provincial requirements.

PST COMMISSIONS

7. Many provinces provide a commission to each registered vendor for collecting and remitting PST. The provinces of British Columbia and Ontario have ruled that all NPF vendors are considered to part of the federal government, which is a vendor itself. The PST commission in these provinces is deemed to have been claimed by the federal government and, therefore, individual NPF vendors are not permitted to claim PST under their individual vendor permits.

NPF PURCHASES FOR INTERNAL USE

TYPES OF PROVINCIAL SALES TAXES

8. Provincial sales taxes include all taxes and fees levied by the appropriate provincial and territorial governments and are classified as follows:

   1. Provincial General Sales Taxes. A provincial general sales tax is considered to be a tax of general application payable by the purchaser on the value of the goods or services received. It is levied under a provincial retail sales tax statute or its equivalent.

      Note: Government departments and agencies are exempt from paying this type of provincial sales tax in all provinces and territories.

   2. Ancillary taxes. These

      1. are taxes or fees generally imposed by a provincial statute other than by the provincial Retail Sales Tax Act or its equivalent,

      2. include fuel taxes, tobacco taxes, admission and amusement tax (Nova Scotia), hotel room taxes (where these taxes are not levied under the provincial retail sales tax legislation), as well as environmental levies on batteries and tires (where applicable), and taxes on insurance premiums (Quebec), and

      3. are payable by NPF in all provinces and territories except Saskatchewan, Alberta, the Northwest Territories, Nunavut and the Yukon Territory.

EXEMPTION PROCEDURE

9. In order to obtain exemption from the above taxes, where authorized, the applicable provincial sales tax licence number or certification ( see Appendix 1 ) is to be quoted on the purchase order.

10. Both general sales taxes and ancillary taxes will be paid by NPF for third party transactions such as petty cash purchases and travel claim reimbursements.

HARMONIZED SALES TAX

11. In provinces where PST has been harmonized with the GST, the policy and procedures for GST apply unless stated otherwise.

INTERESTS ON SALES TAX NOT COLLECTED/REMITTED

12. It has been ruled by the National Defence lawyers, that the claim of the Quebec Ministry of Revenue to impose interests on taxes not collected/remitted by the NPForganization in the province of Quebec, is legitimate. Consequently, the Quebec Ministry of Revenue will impose interests charges to NPF organizations on all amounts owed to the Province, and cumulated monthly, until the overall amount has been paid.This ruling was based on the agreement between the Crown and the Province of Quebec, dated the 20th December 1993.