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Can HST be claimed back from the government?

By Hank Bulmash |

Penny asked:

As an education franchisor, I do not charge HST to my students, but pay the same on royalties. Can I claim this back from the government.

Hank Bulmash answered:

Your reader says he's an education franchisor and he doesn't charge his students HST. I'm not exactly sure what an education franchisor is, but I assume your reader develops educational programs of some sort, sells them to other education providers and also has his own student base.

The reader can obtain a refundable credit for the HST he pays out if he is registered for HST. A business does not have to register for HST if its annual revenues are less than $30,000 per year. If its revenues are over $30,000, it legally must register unless it falls into a category that is exempt, and a vendor of courses in Canada would not be exempt.

If the business is not registered, it cannot obtain a credit for HST paid.

A business that is obligated to register for HST and fails to do so is in contravention of the Excise Tax Act, which is a serious crime.

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