If you live in Ontario, you may be eligible for a point-of-sale rebate of the 8% provincial part of the Harmonized Sales Tax (HST) on qualifying prepared food and beverages that cost $4 or less. This means you only pay the 5% federal part of the HST on these items, saving you money and making your meals more affordable.
What are qualifying prepared food and beverages for GST Rebate?
Qualifying prepared food and beverages are those that are ready for immediate consumption and are not zero-rated as basic groceries under the GST/HST. Examples of qualifying prepared food and beverages include:
Sandwiches, salads, wraps, and other similar items
Hot or cold drinks, such as coffee, tea, juice, milk, or soda
Bakery goods, such as muffins, cookies, donuts, or croissants
Pizza slices, hot dogs, burgers, fries, and other similar items
Ice cream, frozen yogurt, sherbet, and other similar items
However, some items are not eligible for the GST rebate, such as:
Alcoholic beverages
Cannabis products
Tobacco products
Vending machine sales
Catering services
Food or beverages sold for more than $4
How does the GST rebate work?
The rebate is applied at the point of sale by the vendor, who collects only the 5% federal part of the HST and pays or credits the 8% provincial part of the HST to the consumer. The vendor then claims the rebate from the Canada Revenue Agency (CRA), which administers the rebate on behalf of the Government of Ontario.
The rebate is based on the total price, excluding HST, of all qualifying prepared food and beverages sold to a person at a particular time. This means that if you buy multiple items that add up to $4 or less, you can still get the rebate. However, if the total price exceeds $4, you have to pay the full 13% HST on the entire amount.
How can I benefit from the GST rebate?
The rebate can help you save money on your everyday purchases of prepared food and beverages, especially if you buy them frequently or in small quantities.
For example, if you buy a coffee and a muffin for $3.50, you will save $0.28 with the rebate. If you do this every weekday for a year, you will save $72.80 in total.
Here are some more examples of how much you can save with the rebate, based on the prices of some common items:
Item | Price (excluding HST) | HST without Rebate (13%) | HST With rebate (5%) | Savings |
|---|---|---|---|---|
Sandwich | $3.99 | $0.20 | $0.32 | |
Slice of Pizza | $2.50 | $0.33 | $0.13 | $0.20 |
Soft Drink | $1.25 | $0.16 | $0.06 | $0.10 |
Ice Cream Cone | $2.00 | $0.26 | $0.10 | $0.16 |
As you can see, the rebate can make a difference in your budget, especially if you combine it with other tax credits and benefits that you may be eligible for, such as the GST/HST credit, the Ontario Trillium Benefit, or the Canada Child Benefit.
The GST rebate on prepared food and beverages in Ontario is a great way to save money and enjoy your meals more. By knowing what items qualify for the rebate and how it works, you can take advantage of this benefit and reduce your tax burden. Remember to look for the rebate on your receipts and ask your vendors if they offer it. Happy eating!
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