This is the third in a series of articles about the introduction of HST in BC on July 1, 2010. This article focuses on filing the final PST return before the implementation of HST.
Final PST returns for taxes collected before July 1, 2010 are required to be filed on or before July 23, 2010. This applies regardless of a person’s remittance frequency. This final PST return may not be the last return filed. If an amount is collected or becomes payable on account of PST after June 2010, the vendor will have to file a supplemental PST return on or before the 23rd of the following month. All supplemental returns will have to be filed before January 23, 2011, however, extensions may be granted under some circumstances.
The following transitional rules apply to sales of most taxable personal property:
- When the goods are delivered or ownership is transferred to the purchaser before July 1, 2010, PST applies to the full purchase price.
- When the goods are delivered and ownership passes to the purchaser on or after July 1, 2010, PST applies to any amount of the purchase price that becomes due, or is paid without having become due, before May 1, 2010.
Different rules apply to sales of specific items, such as subscriptions to periodicals, sales of software and software licenses, and sales of propane. Consult your accountant if you need help with sales of these items.
Make sure that you include all the PST collected or collectable on your final PST return.
Commissions can be claimed on the final PST return and on any supplemental returns filed on or before January 23, 2011. A commission will not be available where an extension has been provided.
There can be a number of reasons why a supplemental PST return is required, due to the way the transitional rules work. The most likely cause for a supplemental return is returns and exchanges.
Where a purchase of tangible personal property made before July 2010 was subject to PST, but it is returned on or after July 1, 2010, and before November 2010, the following rules apply:
- Where the goods are returned for refund, PST on the amount of the refund will be provided by the vendor.
- Where an exchange is made with no refund and no additional payment, there will not be a PST refund.
- Where an exchange results in an additional payment, PST will not apply but the HST may apply to the additional payment.
- Where the PST did not apply to goods that were purchased before July 1, 2010, the B.C. component of the HST would apply to the full consideration for the replacement goods, and would be collected by the vendor.
- Where a return is made on or after November 1, 2010, purchasers will have to apply to the Ministry of Finance for any refund of PST.
Refund provisions under the Social Service Tax Act will generally remain in effect and will allow refunds of PST to be claimed up to four years following the payment of the PST. However, certain transitional refunds for business purchases must be made on or before December 31, 2010.
Effective July 1, 2010, a transitional refund of the PST will be provided in certain circumstances, where an inventory of goods purchased before June 30, 2010 with PST paid is at hand at June 30, 2010. Application for this refund is to be made separately, not on the final PST return. A refund of PST paid in advance on liquor sold by an HST registrant on or after July 1, 2010 is also available. Details of how this refund can be claimed have not yet been provided by the Province.
If you are not sure you understand the rules for filing your final PST return, talk to your accountant soon.