GST can be defined as multi-value added tax which was introduced by Prime Minister Brian Mulroney and Finance Minister Michael Wilson on 1st of January 1991. The GST was introduced replacing previous hidden (MST) manufacturer’s tax which was 13.5%.
The prime minister of Canada claimed that GST was implemented because MST was hurting the export ability of manufacturing sector. It also replaced the federal telecommunication tax which was 11 %. GST was introduced in many disputes as many of provinces were against GST. Tax law firms in Toronto helped a lot of people by educating them about GST.
The European models helped Canadian economy to become more efficient and helped them to compete with low priced goods in the international market. As the effect of GST in the world was quite modest and keep on changing with large changes in exchange rates.
The clear nature of GST keeps Canadians aware of their taxations. After the introduction of GST, the conservative party of Canada reduces the tax by1% on 1 July 2006 as they promised during elections and top tax lawyers Toronto helped a lot of people know from which sections the taxes were deducted.
Then again GST was Lowered by 5% on 1 January 2008 and now GST is a federal tax of 5% posted on most of the goods and services sold in Canada as the mode of domestic consumption whereas some of the goods are exempt from GST which is called zero-rated goods and services.
GST is a federal goods and service tax which is collected by the Canada Revenue Agency (CRA). GST is a tax is almost same in each and every province else than Nova Scotia, New Brunswick, and Newfoundland and Labrador whose GST rates are 13% of this 5% is the federal part and 8% is the provincial part
Some specific zero rated goods and services are as following-
- Most health, medical, and dental services performed by licensed physicians or dentists in accordance to medical reason
- Child-care services
- Long term residential accommodations
- Almost all goods and services provided by charities etc.