University of Saskatchewan

Financial Services Division (FSD)

Fact Sheet – GST and PST application on Revenue Sources

Tax rates are as follows (as at May 2012):

Goods and Services Tax (GST) 5%
SK Provincial Sales Tax  (PST) 5%

All taxes must be deposited into the appropriate tax CFOAPAL:

GST/HST
1 - 100052 - your organization code - 20101 - your program code

PST
External Sales: 1 - 100134 - your organization code - 20103 - your program code
Internal Sales: 1 - 100134 - your organization code - 20104 - your program code

How do I know if GST and/or PST are applicable?

The first question you must answer is whether the sale is internal or external, since the tax application is different for each.

Internal sales are charges to another university CFOAPAL other than a CFOAPAL with an organization code ‘9000’. 

GST never applies on internal sales.

PST does not apply on internal sales, unless your unit either:

  1. acquired the goods PST-exempt as goods for resale or
  2. the goods were fabricated/manufactured internally by your unit. 

If either of the PST exceptions applies, your unit must contact the university’s Manager-Taxation at 966-2461 or by email at: tracey.mchardy@usask.ca to document your process for charging PST on internal sales.

External sales includes: cash sales, accounts receivable, sales to faculty/staff and students and charges to CFOAPALs with a chart ‘2’ and/or an organization code of ‘9000’.

The tax status on external sales will depend on the nature of the revenue source and in certain cases, the status of the customer (e.g., the SK government does not pay GST). The remaining comments in this fact sheet apply only to external sales.

External Sales - Application of GST and PST

Grants, Donations and Sponsorship

GST and PST does not apply to “true” grants, donations or sponsorship (i.e., the contributor receives nothing in exchange for the payment). Tax may apply where the contributor receives a tangible good or service in exchange for the payment regardless of the fact that the funding is called a grant/sponsorship. Examples where tax may apply to grants/sponsorship include situations where the contributor receives: ownership of the research equipment upon project completion; free access to labs, research equipment, conference tickets, booth rentals or other equipment and space rentals, etc. Where these tangible goods or service account for less than 10% of the funding, tax will not apply; otherwise, some reasonable apportionment must be made and in some cases, tax may apply to the full grant amount.

Sales to provincial departments and certain provincial agencies

All Saskatchewan government departments and certain provincial agencies must pay applicable PST, but do not pay GST provided a certification of exemption is retained on file. See the bottom of this page for a sample of the provincial governments' GST exemption certificate.

Other provincial governments relieved from paying GST include: AB, MB, QC, YT and NT.   Government employee purchases do not qualify for this exemption even if they will be reimbursed by their employer.  The following provincial governments pay all applicable GST/HST: ON, NB NS, NL, PEI, NU and BC (until March 31, 2013).

Sales to federal departments and agencies

All federal departments must pay applicable GST/HST (see CRA’s website).  Federal departments and agencies, including the RCMP do not pay SK PST; whereas, federal crown corporations must pay applicable PST.

Sales to Status Indians and Indian Bands

For taxable goods, applicable PST and GST must be charged unless the university arranges for shipment to a reserve (evidence of shipment must be retained on file and the 10-digit Indian status identification card number must be recorded on the invoice).  For sales to status Indians or Indian bands of taxable services, PST and GST will apply unless the service is wholly performed on a reserve.

Goods for resale

 Sales where the customer acquires the goods for resale in Saskatchewan are not subject to PST provided that the client’s SK PST vendor number is recorded on the invoice and the invoice must note the fact that the goods are acquired for resale.

Goods shipped outside of Saskatchewan

Sales to non-Saskatchewan residents are PST-exempt provided it is the university that ships the goods out of province (evidence of shipment must be retained on file).   Applicable GST must be collected if the goods are shipped within Canada and where the goods are shipped to an HST province, HST may apply.

Harmonized Sales Tax (HST)

 For taxable sales of goods, where your unit ships the goods to an HST province, the HST rate must be charged instead of the GST, other than for qualifying books and/or child-sized clothing.  For taxable services, HST applies if the customer’s billing location is in an HST province.  HST rates are as follows: BC - 12% (until March 31, 2013); ON - 13%; NB - 13%; NL - 13%; NS – 15%.

Detailed listing

Click here for a listing of the tax status for different revenue sources. Also, your unit may provide a listing of all revenue sources to the Manager, Taxation who will then return the listing with the applicable taxes to be charged

GST taxable and exempt items sold together

In many cases your unit may provide GST-taxable and GST-exempt items together.  In this case, you must determine if one supply is being made or two separate supplies are being made.  CRA’s policy P-077R2 Single and Multiple Supplies outlines some of the factors to consider to make this determination, including some of the following questions:

1.

What does the client wish to obtain?

(i.e., is it the service or the good that is more relevant?)

2.

Would the client have the option to acquire the goods/services separately?

 

If yes, then this supports multiple supplies.

3.

Would each service in itself be of use to the client?

 

If the answer is yes - this supports multiple supplies.

4.

Is the client aware of the specific elements?

 

If yes, then this again supports multiple supplies.

If it is determined that your unit is providing a single supply of a GST-taxable good, then GST applies to the total invoice amount. For example, the sale of business cards is considered a good and, therefore, the total invoice amount is taxable (the printing and design services related to making the cards is viewed as an input to the final product).

If it is determined that your unit is providing a single supply of a GST-exempt service, then GST does not apply on the total invoice.  For example, the total invoice amount for a computer repair job is GST-exempt even where the materials used to complete the repair service are significant.

Alternatively, your unit may determine two separate supplies are being provided: a supply of a taxable good and a supply of an exempt service; in this case, GST applies on the charge for the good but not on the fee for the GST-exempt service.

PST

Generally, PST applies to the sale and/or rental of all new and used goods.  Some exceptions apply, including:

The following services are subject to PST:

PST taxable and exempt items sold together

As long as the fees for each item is separately disclosed on the invoice, PST will apply only to the taxable goods/services.

More details on the application of PST are included in Saskatchewan Finance’s PST bulletins.

OTHER INFORMATION

Reimbursement of costs - Where the invoice includes a line item for the reimbursement of costs related to the provision of a good or service, the tax status for the reimbursements will be the same as the related good or service.

Invoicing requirements – All applicable GST and PST and the university’s GST business number (#11927 9313RT) must be disclosed on the invoice.  Also, where the good or service is GST-exempt, the following statement must be included on the invoice: “GST-exempt (public institution supply)”.

All GST and PST must be deposited into the appropriate tax CFOAPALs even if collected in error.  This includes situations where the contract stipulates that the contract price includes a specific amount as GST and/or PST.  The only exception is where the tax was collected in error and refunded back to the customer and a credit memo or revised invoice is issued and retained on file (or an amendment is made to the contract, which may be a simple letter signed by the parties).

The tax CFOAPALs are:

GST/HST
1 - 100052 - your organization code - 20101 - your program code

PST
External Sales: 1 - 100134 - your organization code - 20103 - your program code
Internal Sales: 1 - 100134 - your organization code - 20104 - your program code

It is best to deposit the GST and PST into the above CFOAPALs at the same time the related revenue is recorded (e.g., upon invoicing or on cash reports).  If this does not occur, units are responsible to ensure appropriate journal vouchers are prepared to transfer the applicable taxes to the above CFOAPALs. 

Additional information on tax matters is included on FSD’s website. After reading this material, if you are still unsure of the tax application on revenue sources and/or if your unit has additional tax questions, please do not hesitate to contact the university’s Manager-Taxation at 2461 or by email at tracey.mchardy@usask.ca.

 

 

Sample - provincial government GST-exemption certificate

This is to certify that the property and/or services ordered/purchased hereby are being purchased by:

 

                                                                                                                                   
(Name of Provincial/Territorial Government Department or Agency)

and are not subject to the GST/HST.

 

                                                                                   _
Signature of Authorized Official

 

                                                                                   _

Date