HARMONIZATION OF THE QUEBEC SALES TAX (QST) AND THE GOODS AND SERVICES TAX (GST)

1. The harmonization of QST with GST became effective 1 July 1992 and applies to both regular and reserve force units.

2. The policy and procedures for the QST are contained in various publications provided by Revenue Quebec to registrants. However, due to the status of NPF operations with respect to GST, as agreed with Revenue Canada, as well as Treasury Board (OCG) direction, the policy provided by Revenue Quebec may not apply entirely to NPF.

3. The following points should be kept in mind when reading any QST publications:

1. with the exception of exempt activities, such as day care, NPF operations are considered to be 100% commercial for both GST and QST;

2. NPF operations are not entitled to public sector or public service (eg. charity, non-profit, municipal, etc) exemptions for either GST or QST; and

3. as a federal government department registrant for GST, the monthly GST returns will continue to be sent to the Department of National Revenue in Ottawa. The monthly QST return will be sent to the Quebec Ministry of Revenue.

4. A summary of the QST as it applies to NPF is as follows:

1. in accordance with Revenue Quebec policy, units with less than $30,000 of annual sales (for the unit and not entity) are not required to register for QST. Note that Input Tax Refunds (ITRs) will not be reimbursable and will form part of the cost of goods sold. Note that units must still register for GST if there are any sales regardless of the amount;

2. the rate of QST on supplies and services is 7.5%;

3. for purchases made from suppliers by units which have no resale activities, a certification (see Appendix 1, Annex A to this chapter) is to be used. Other NPF operations are considered to be commercial and any QST paid may be claimed as an Input Tax Refund (ITR) similar to GST Input Tax Credits (ITC);

4. for purchases made by federal government departments from NPF entities, a certification (see Appendix 1, Annex A to this chapter) is to be provided by them;

5. for supplies and services sold by NPF activities, 7.5% QST must be collected and remitted. Note that memberships (eg. mess dues) are services and are subject to QST; and

6. effective 23 Jun 98, all tobacco products purchased from manufacturers/wholesalers include a "specific tax" for QST that is part of the cost of goods sold. Therefore, there is no QST charged on these products when sold by the NPF outlet.