GST, QST and consumption taxes

What are the GST and QST?

The goods and services tax (GST) is a 5% federal tax, and the Quebec sales tax (QST) is a 9.975% provincial tax. Both apply to most supplies of goods and services made in Quebec, for a combined rate of 14.975% that a registered business collects from its customers and remits to the tax authorities.

In Quebec, Revenu Québec administers the QST and, for most businesses, the GST on behalf of the Canada Revenue Agency (CRA). Filing, remitting and, when it happens, being audited therefore usually involve a single administration covering both taxes. Businesses selling outside Quebec also contend with the harmonized sales tax (HST) of the participating provinces, which makes the place-of-supply rules a recurring compliance question.

Tax	Rate	Administered in Quebec by
GST (federal)	5%	Revenu Québec, on behalf of the CRA
QST (provincial)	9.975%	Revenu Québec
HST (participating provinces)	Varies by province	CRA

Who has to register for the GST and QST?

As a general rule, anyone carrying on a commercial activity in Quebec must register for the GST and QST unless they qualify as a small supplier, a status reserved for businesses whose taxable supplies remain under the threshold set by law. Registration brings obligations, charging the right tax on every sale, filing returns (monthly, quarterly or annually depending on volume) and remitting what has been collected.

The timing of registration, compliant invoicing and the distinction between taxable, zero-rated and exempt supplies raise technical questions with real financial consequences, particularly in sectors such as real estate and e-commerce. KB Fiscalité reviews the business’s situation, completes the required registrations and sets up compliant collection and remittance practices.

How do ITCs and ITRs work?

Input tax credits (ITCs) let a registered business recover the GST paid on goods and services acquired for its commercial activities. Input tax refunds (ITRs) do the same for the QST. Claimed properly, they ensure the tax burden lands on the final consumer rather than on the business itself.

Claims are subject to strict conditions, complete supporting documents, prescribed information on invoices, eligible expenses and claim periods to respect. ITCs and ITRs denied for missing documentation are among the most common adjustments raised in an audit. The firm reviews claiming practices, identifies credits that were never claimed, and fixes documentation gaps before they turn into assessments.

Does your business face excise taxes or customs duties?

Excise taxes apply to specific products (including certain fuels, alcohol and tobacco) while customs duties apply to goods imported into Canada. These levies come on top of the GST and QST and follow their own rules for calculation, reporting and payment.

A business that imports goods, or operates in a targeted sector, has to manage how these regimes interact, taxes payable at the border, tariff classification, licensing and reporting obligations. KB Fiscalité advises businesses on these obligations and represents them before the authorities when questions or disputes arise.

What happens during a Revenu Québec audit?

A tax audit is an examination of a business’s books and returns by Revenu Québec or the CRA to confirm that taxes were properly charged, reported and remitted. A consumption tax audit generally unfolds in stages.

1. Audit notice. The auditor contacts the business and identifies the periods and taxes under review.
2. Document requests. Accounting records, invoices, contracts and supporting documents are requested.
3. Review and questions. The auditor analyzes the file and asks for clarifications.
4. Draft assessment. The proposed adjustments are communicated, and the business may respond.
5. Notice of assessment. The final assessment is issued, along with objection rights.

An audited taxpayer keeps important rights, the right to be represented by the professional of their choice, to know the exact scope of the audit, and to respond within reasonable timelines. Being represented from the very first contact changes how the file unfolds. Under an audit mandate, KB Fiscalité becomes the auditor’s single point of contact, frames the requests, and responds to the draft assessment before it becomes final.

What are your options if you disagree with an assessment?

A GST or QST assessment can be challenged by filing a notice of objection, generally within 90 days of the notice of assessment. The objection triggers a fresh review by an officer independent of the audit. If the disagreement persists, an appeal to the courts remains available.

A tax dispute is built early, the arguments, documents and admissions made during the audit follow the taxpayer through to appeal. Because the firm brings a tax lawyer and a tax accountant together, it can address both the accounting evidence and the legal arguments.

Why trust KB Fiscalité with your consumption taxes?

KB Fiscalité inc. brings together a tax lawyer, Thierry Bouchard, and a tax accountant, Ante Kumanović, in Vaudreuil-Dorion. The firm supports businesses in Vaudreuil-Soulanges, Greater Montreal and across Quebec, from initial registration through audits and, when necessary, litigation.

Its professionals are members of the APFF, and they handle every file the same way. To discuss your GST and QST obligations, reach the firm at (514) 394-0848 or info@kbtax.ca.