Reason code 16 - Provincial point-of-sale rebate on qualifying items

Video series: GST/HST Information for a New Small Business

Segment 15: Providing point-of-sale rebates

 

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The governments of New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, and Prince Edward Island provide a point-of-sale rebate of the provincial part of the HST payable on qualifying items. When a point-of-sale rebate on the provincial portion of the HST is provided, vendors collect only the 5% federal part of the HST payable on the sale of these items.

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Are you eligible for the rebate?

Use reason code 16 for qualifying items purchased and consumed in the same province where the point-of-sale rebate was not granted. If you purchased goods in a participating province for consumption, use, or supply in another province, see Form GST495, Rebate Application for the Provincial Part of the Harmonized Sales Tax (HST), for information on claiming a rebate of the provincial part of the HST.

Generally, if you buy a designated item in a participating province that provides a provincial point-of-sale rebate for the designated item, the registrant supplier will credit you with the rebate of the provincial part of the HST due at the time of your purchase. This means that you usually will not pay the provincial part of the HST when you buy a designated item in a participating province that provides a provincial point-of-sale rebate for the designated item.

The point-of-sale rebate would not only apply to sales of designated items at retail establishments, but would also be available on sales of designated items made at any point in the distribution chain. The point-of-sale rebate would also apply to sales of designated items made over the Internet.

However, if the registrant supplier does not credit the rebate to you, you can apply for a rebate under reason code 16.

You are eligible for this rebate if you:

  • bought a designated item in a participating province that provides a provincial point-of-sale rebate for the designated item you paid the provincial part of the HST and the registrant supplier did not credit you with the rebate of the provincial part of the HST due at the time of your purchase; or
  • brought a designated item into a participating province that provides a provincial point-of-sale rebate in for the designated item and you have self assessed and remitted the provincial part of the HST at the applicable rate for the participating province.

If the registrant supplier did not credit you with the rebate of the provincial part of the HST due at the time of your purchase and you are a registrant acquiring the designated items for use or supply in the course of a commercial activity, you can claim an input tax credit to recover the 5% federal part of the HST paid. You cannot claim an input tax credit to recover the provincial part of the HST paid, but you can apply for a rebate under reason code 16.

Qualifying items for the point-of-sale rebate
and in which participating provinces it applies
Provinces Books Children's items Feminine hygiene products Qualifying heating oil Newspaper Qualifying food and beverage
New Brunswick Yes No No No No No
Newfoundland and Labrador Yes No No No No No
Nova Scotia Yes Yes Yes No No No
Ontario Yes Yes Yes No Yes Yes
Prince Edward Island (P.E.I.) Yes Yes Footnote 1 No Yes No No

Qualifying items for the point-of-sale rebate

The participating provinces will provide point-of-sale rebates of the provincial part of the HST payable on sales of certain qualifying items. The vendor will automatically credit the provincial part of the HST and only collect the 5% federal part of the HST payable on the sale of that item. Crediting purchasers in this manner will not affect a vendor's ability to claim input tax credits on its business inputs.

The point-of-sale rebate will not only apply to sales of qualifying items at retail establishments, but will also be available on sales of qualifying items made at any point in the distribution chain. The point-of-sale rebate will also apply to sales of qualifying items made via the Internet.

Children's items

Children's clothing

Children's clothing designed for:

  • babies (including baby bibs, bunting blankets, and receiving blankets);
  • girls, and boys up to and including girls' Canada standard size 16 and boys' Canada standard size 20, or clothing qualifying for girls and boys in sizes extra small, small, medium, or large if the clothing does not have a qualifying Canada standard size; and
  • hosiery or stretchy socks, hats, ties, scarves, mittens, and gloves in sizes and styles designed for children or babies.

The following goods are not qualifying children's clothing for purposes of the point-of-sale rebate:

  • Adult-sized garments even if purchased for a child;
  • costumes;
  • children's garments of a class that is used exclusively in sports or recreational activities; and
  • children's footwear and children's diapers. Rebates are available on children's footwear and children's diapers if such goods qualify as such, respectively, for the purposes of those rebates.
Children's footwear

Children's footwear designed for babies, girls, and boys up to and including girls' size 6 and boys' size 6, including footwear without a numerical size that is designated for girls or boys in sizes small, medium or large. Children's footwear eligible for the point-of-sale rebate will not include skates, rollerblades, ski-boots, footwear that has cleats, or similar footwear.

Children's diapers

Diapers, including cloth and disposable diapers designed for babies and children, and diaper inserts and liners, rubber pants, and training pants. Incontinence products will be zero-rated under HST, in accordance with current GST rules.

The government of Prince Edward Island does not provide a point-of-sale rebate on children's diapers.

Children's car seats and car booster seats only for Ontario

Children's car seats and car booster seats that are restraint systems or booster cushions that conform with Transport Canada's safety requirements for Standards 213, 213.1, 213.2 and 213.5, as described under the federal Motor Vehicle Safety Act.

Books

The following will qualify as books for all the partcipating provinces:

  • printed book or an update of a printed book;
  • an audio book (all or substantially all of which is a spoken reading of a printed book);
  • a bound or unbound printed version of a scripture of any religion;
  • a printed book and a read-only medium (such as, CD-ROM) whose content is related and integrated with the book's content and when sold together as a single package; and
  • a printed book and a read-only medium and/or a right to access a Web site when sold together as a single package and if specifically designed for students enrolled in a qualifying course, such as educational courses of elementary or secondary schools.

A qualifying course means a course where the supply of the service of instructing in the course is an exempt supply included in Part III of Schedule V to the federal Excise Tax Act, or would be an exempt supply included in that Part but for the fact that the supplier made an election under that Part.

The following items, including anything that has the following items as its main part, will not qualify as a printed book:

  • a newspaper;
  • a magazine or periodical, unless it is purchased by subscription and the printed space of the magazine or periodical devoted to advertising is not more than 5% of the total printed space;
  • a brochure or pamphlet;
  • a sales catalogue, a price list, or advertising material;
  • a warranty booklet or an owner's manual;
  • a book designed primarily for writing on;
  • a colouring book or a book designed primarily for drawing on or affixing thereto, or inserting therein, items such as clippings, pictures, coins, stamps, or stickers;
  • a cut-out book or a press-out book;
  • a program relating to an event or performance;
  • an agenda, calendar, syllabus, or timetable;
  • a directory, an assemblage of charts, or an assemblage of street or road maps, but not including a guidebook or an atlas that consists in whole or in part of maps other than street or road maps;
  • a rate book;
  • an assemblage of blueprints, patterns, or stencils;
  • an assemblage or a collection of, or any item similar to, the above items; or
  • electronic and digital publications.

For more information, see GST/HST Memoranda Series Chapter 13.4, Rebates for Printed Books, Audio Recordings of Printed Books, and Printed Versions of Religious Scriptures.

Feminine hygiene products

Feminine hygiene products, including sanitary napkins, tampons, sanitary belts, or other products marketed exclusively for purposes similar to the purposes for which sanitary napkins, tampons and sanitary belts are marketed.

Newspaper and qualifying food and beverage - Ontario only

Newspapers

Print newspapers that contain news, editorials, feature stories, or other information of interest to the general public, and that are published at regular intervals, typically on a daily, weekly, or monthly basis will qualify for the point-of-sale rebate.

Flyers, inserts, magazines, periodicals, and shoppers will not qualify.

Qualifying prepared food and beverages

Qualifying prepared food or beverages that are ready for immediate consumption and that are sold for a total consideration of not more than $4.00 (not including HST), whether consumed on or off the premises where they are sold. Qualifying items will include:

  • food or beverages heated for consumption;
  • salads not canned or vacuum sealed;
  • sandwiches and similar products other than when frozen;
  • platters of cheese, cold cuts, fruit or vegetables, and other arrangements of prepared food;
  • cakes, muffins, pies, pastries, tarts, cookies, doughnuts, brownies, croissants with sweetened filling or coating, or similar products where they are not prepackaged for sale to consumers and are sold as single servings in quantities of less than six;
  • ice cream, ice milk, sherbet, frozen yoghurt or frozen pudding, non-dairy substitutes for any of these products, or any product that contains any of these products, when hand-scooped or machine dispensed and sold in single servings;
  • other food items not zero-rated as basic groceries solely by virtue of the types of sales made at the establishment where they are sold (such as, a sale of a bagel or a plain croissant in a restaurant); non-carbonated beverages when dispensed at the place where they are sold; or
  • the following when sold with a qualifying food item above::
    • other beverages except if the cans, bottles or other primary containers in which they are sold contain a quantity exceeding a single serving;
    • cakes, muffins, pies, pastries, tarts, cookies, doughnuts, brownies, croissants with sweetened filling or coating, or similar products where they are prepackaged for sale to consumers in quantities of less than six items each of which is a single serving;
    • ice cream, ice milk, sherbet, frozen yoghurt or frozen pudding, non-dairy substitutes for any of the foregoing, or any product that contains any of the foregoing, when packaged and sold in single servings; or
    • other snack foods such as chips, salted nuts, popcorn, candies, fruit bars, granola bars

Wine, spirits, beer, malt liquor, or other alcoholic beverages will not be a qualifying beverage for the purpose of the point-of-sale rebate.

For information on food items that are not zero-rated as basic groceries and the meaning of establishment, see GST/HST Memoranda Series Chapter 4.3, Basic Groceries

Single transaction

In calculating whether qualifying prepared food and beverages will be sold for a total price of $4.00 or less, only the qualifying prepared food and beverages are included in the calculation of the $4.00 threshold.

How do you claim your rebate?

If the vendor does not credit the point-of-sale rebate, you may apply for a rebate of the provincial part of the HST paid on the sale of the qualifying item under reason code 16 on Form GST189, General Application for Rebate of GST/HST.

How do you calculate your rebate?

For details on how to calculate your rebate, Part C - Rebate claimed, see Guide RC4033, General Application for GST/HST Rebates. Use Method (c) to complete Parts C and F of the application form.

Calculating your rebate for the provincial part of the HST

If you are eligible for a rebate of the provincial part of the HST, multiply the amount of the HST by:

  • 7/12 for those purchases taxed at 12%;
  • 8/13 for those purchases taxed at 13%;
  • 8/14 for those purchases taxed at 14%; or
  • 10/15 for those purchases taxed at 15%.

How registrant suppliers show the rebate on their invoices

When disclosing the HST on an invoice or receipt issued in for the sale of qualifying items to which the registrant supplier has paid or credited the rebate amount at the point of sale, the registrant supplier may show:

  • the total amount of the HST payable (or the total HST rate) with the rebate amount paid or credited shown separately;
  • the total HST payable as an amount net of the rebate amount paid or credited; or
  • the total price of the qualifying items that includes HST at a net rate of 5%.

Where do you send your rebate application?

If you are filing a paper GST/HST return, send the completed rebate application with your return, to the address shown on your GST/HSTreturn. Otherwise, send the completed rebate application to:

Summerside Tax Centre
275 Pope Road
Summerside PE C1N 6A2

What is the due date to file your rebate application?

You have four years from the day the tax became payable to file your rebate application.

What records do you include with your application and what records do you keep?

You have to include original receipts for all purchases that you list. If you plan to file a rebate application in any other jurisdiction that requires original receipts, you should consider filing your general application for a GST/HST rebate first. We will return your original receipts after we process your application. We will not accept photocopies of receipts or credit card slips as proof of purchase.

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