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Charging PST and GST

Expert: Ram Madhavan

Rozi asked:

I have started a distribution business and sell animal antibodies to researchers in hospitals, universities, and pharmaceutical companies and also to other distributors. These antibodies are used by researchers in biomedical research on animals. I am not sure if I need to register for PST and charge my customers both GST and PST.

Ram Madhavan answered:

Ontario retail sales tax (RST) will be applicable to the supply of animal antibodies to researchers. Under the RST regulations, drugs and medicines sold under the prescription of a physician, dentist or veterinarian are exempt from RST. But that would not fit the facts you have presented. With regard to a supply to another distributor, RST may not be applicable if the recipient produces a purchase exemption certificate indicating that the supply will be resold. Under the above circumstances, RST registration would appear to be required.

About the author

Ram Madhavan is the Senior Tax Manager at Mintz & Partners LLP.

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