Who this is for
- Canadian sellers who sell goods to resellers, distributors and retailers
- Resellers asking whether they pay GST/HST or PST on stock they buy
- Sellers whose buyers in British Columbia, Saskatchewan or Manitoba quote a PST or RST number
Not covered here
- Quebec sales tax (QST) rules for resellers
- Whether and how to register for PST
- Export proof and sales to First Nations buyers
- GST paid at the border on imports
Is there a resale certificate or sales tax exemption form in Canada?
Canada has no general GST/HST resale certificate. A seller charges GST/HST on a taxable sale whether the buyer is a shopper or a reseller, and a buyer registered for GST/HST gets the tax back as an input tax credit (ITC) unless it uses the Quick Method. The Excise Tax Act makes the buyer of a taxable supply pay the tax and requires the seller to collect it. The CRA's pages on type of supply and which rate to charge describe no reseller exemption.
Provincial sales tax is different. British Columbia, Saskatchewan and Manitoba let a business buy goods it will resell without provincial tax by giving the supplier a number or form. That relief covers the provincial tax only and never removes GST/HST.
The CRA's export, drop-shipment and similar certificates cover narrow cases. Buying for resale alone does not qualify; a drop-shipment involving an unregistered non-resident seller can cover goods that stay in Canada for a registrant's commercial use. Export proof is in charging GST/HST to US customers.
A case stops being simple when:
- buyers are in more than one province, each with its own number, proof and tax
- a buyer says it is exempt, or you already left GST/HST off sales because it did
- stock bought for resale is partly used in the business
- the stock is imported
- tax was charged on stock in error
Gather a list of buyers by province and GST/HST registration status, the PST, RST or vendor's licence numbers they gave you, your sales invoices, and the supplier invoices for stock you resell.
Do I charge GST/HST when I sell to a reseller or distributor?
Yes, when you are registered and the sale is taxable. The CRA says GST/HST registrants generally have to charge and collect the tax on their taxable sales, and a buyer's plan to resell the goods does not change that. If you are not registered because you are a small supplier, see when to register for GST/HST.
The rate depends on the place of supply: the province or territory where the supply is considered made. A zero-rated supply is taxed at a zero rate throughout Canada (CRA). In an ordinary taxable sale, a reseller's GST/HST number does not change the tax line on your invoice. Whether the buyer can claim the credit depends on its own registration, its use of the goods and your invoice details.
For the rate on an invoice to a buyer in another province, see charging GST/HST, PST and QST by province.
How does the reseller get the GST/HST back on B2B purchases?
A reseller registered for GST/HST claims the tax as an input tax credit on its return, to the extent it bought the goods for use or supply in its commercial activities (section 169). The credit belongs to the reporting period in which the tax became payable or was paid.
A commercial activity is a business, except to the extent it makes exempt supplies and except a business an individual or a partnership of individuals runs without a reasonable expectation of profit (definition). A reseller of exempt goods generally cannot claim, and neither can a buyer that is not registered; the GST/HST it pays is a cost to it. The main exception is a small supplier that registers while holding stock, which is deemed to have paid tax on it for credit purposes (section 171).
On the same return, the reseller reports the GST/HST it collected on its own sales and subtracts its credits. For most registrants the window to claim is four years, counted from the end of the reporting period in which the credit could first be claimed; it is shorter for some. Keep the supplier invoices that support each credit for 6 years in the usual case. The details an invoice must show are in what a receipt must show for an input tax credit, and the return itself is in filing GST/HST and claiming input tax credits.
A reseller on the Quick Method generally does not claim credits on its purchases. It remits a percentage of its sales instead, and the CRA says those rates already allow for inventory purchases (CRA RC4058). Check which method a buyer uses before assuming it recovers the tax; see GST/HST Quick Method.
A customer says it is exempt: does that change the GST/HST I charge?
A buyer's statement alone does not remove GST/HST. Relief comes only from a specific GST/HST rule, and a few rules, such as export and drop-shipment certificates, need a buyer document that meets the CRA's conditions. The CRA warns that some people falsely claim to be exempt, and that a supplier who does not collect from them still has to account for the tax it should have collected.
A provincial resale number does not help. The same guide says some provinces exempt farmers, municipalities and certain businesses from provincial sales tax, and that these provincial exemptions do not apply to GST/HST.
Real GST/HST relief exists for particular transactions, each with its own proof. Two common ones are covered elsewhere: sales to US customers and export proof and sales to First Nations buyers. A third is a sale between closely related Canadian corporations that jointly file a section 156 election, which treats taxable supplies between them as made for no consideration. It needs a joint filed election and excludes sales of real property; the group, filing and commercial-use conditions are in GST/HST election between related companies. The CRA says most property and services supplied in or imported into Canada are subject to GST/HST, so a sale that fits no relief rule is generally taxable. Keep whatever the buyer gave you with the invoice.
Which provinces let a reseller buy goods without PST, and with what number or form?
British Columbia, Saskatchewan and Manitoba do, each for goods bought for resale and each with a different number.
| Place | Provincial tax | What the buyer gives the seller |
|---|---|---|
| British Columbia | PST, 7% | Its PST number, or a completed Certificate of Exemption – General (FIN 490) if it has no PST number. Covers goods obtained solely for resale or lease, and goods incorporated into other goods for resale (Bulletin PST 208) |
| Saskatchewan | PST, 6% | Its vendor's licence number (Bulletin PST-5) |
| Manitoba | RST, 7% | Its 7-digit RST number, not the 15-digit account number on its returns (Bulletin RST 004) |
| Every other province and territory except Quebec | No separate provincial sales tax | No provincial number to give; GST/HST is charged in full (CRA rates) |
| Quebec | QST, separate from GST | Not covered here; see charging GST/HST, PST and QST by province |
In British Columbia, a small seller, the PST category for small retail sellers that need not register, cannot use the resale exemption and pays PST on goods it buys for resale (Bulletin PST 003). Having sold goods at wholesale in the previous 12 months rules a seller out of that category, and a small seller that registers for PST stops being one and must charge PST.
Whether you must register for PST is in do you need to register for and charge PST.
What do I keep as proof when I sell PST-exempt to a reseller?
Get the buyer's number or form at or before the sale, and keep it with the invoice. The proof differs by province.
| Province | Before the sale | What to record or keep |
|---|---|---|
| British Columbia | Obtain the buyer's PST number or FIN 490 at or before the sale | Keep it as part of your records. A wholesaler not required to register must still keep sufficient records for the PST exemptions it claims, for at least five years (Bulletin PST 104) |
| Saskatchewan | Check the PST online registry; suppliers must use it to confirm a valid vendor's licence before selling tax free for resale | Record the buyer's licence number on the invoice at the time of sale, or keep it in your records. Records at least six years old may be destroyed without permission (Bulletin PST-5) |
| Manitoba | Ask for the 7-digit RST number | Record it on the sales invoice. Keep records for the current fiscal year plus the preceding six years (Bulletin RST 004) |
A sale that is PST-exempt for resale still carries GST/HST on the invoice. In Saskatchewan, cancelling a vendor's licence stops a business from buying or selling goods for resale tax free, which is why the registry check comes before the sale.
A supplier charged me PST on goods I resell: how do I get it back?
Ask the supplier first, then use the province's own route. The deadline and conditions differ.
| Province | How to recover PST paid on goods for resale | Deadline or condition |
|---|---|---|
| British Columbia | Give the supplier your PST number and ask for a refund or credit. Or apply to the ministry | Supplier route: within 180 days of the date the PST was charged. Ministry route: it must receive your claim within four years of the date you paid the PST. You must also be registered to collect PST and have remitted $500 or more of PST in the 12 months before the month the ministry receives the claim; no refund under $10 (Bulletin PST 208) |
| Saskatchewan | Ask the supplier, apply to Finance, or take an internal credit adjustment on your PST return | Refunds must be claimed within four years of the overpayment; keep documents that support an internal credit (Bulletin PST-5) |
| Manitoba | Ask the seller for a credit; if that fails, reduce the tax collected on your RST return or file an Application for Refund – General Use | Within two years of the date the RST was paid in error; keep the supporting documents for audit (Bulletin RST 004) |
These routes recover provincial sales tax only. GST/HST properly charged on the same stock comes back as an input tax credit.
Record the PST on its own line, apart from the cost of the goods, so each claim ties back to an invoice. Saskatchewan requires PST entries in the books to be kept separate and distinguishable from other entries.
I buy goods for resale and use some myself: what do I owe?
Provincial sales tax applies to the part you use yourself, and you usually report it yourself. A resale number never covers goods or services you consume in the business.
| Place | Rule |
|---|---|
| British Columbia | On a mixed order, tell the supplier which goods are exempt for resale; if the supplier does not charge PST on the taxable goods, self-assess it. Goods you take from resale stock for business or personal use are taxed on your cost: report on your next PST return, or on a Casual Remittance Return (FIN 405) by the last day of the following month if you have no PST number (Bulletin PST 208) |
| Saskatchewan | A vendor's licence does not let you buy taxable goods or services for your own use tax free. Self-assess on goods or services taken from resale inventory for personal or business use (Bulletin PST-5) |
| Manitoba | An RST number does not let you buy taxable goods or services for your own use tax free. Report and remit RST on taxable goods for your own use taken from tax-free inventory (Bulletin RST 004) |
| GST/HST | The input tax credit is limited to the extent you acquired the goods for use or supply in your commercial activities (section 169). A sole proprietor who takes stock for personal use, or a corporation or partnership that gives stock to a shareholder, partner or related person for less than fair market value, is generally treated as selling it at fair market value and collecting GST/HST on that amount (section 172) |
What about goods I import to resell?
The importer pays GST at the border and, if registered, claims it back. The CRA says goods imported into Canada are generally subject to GST or the federal part of HST, that the owner or importer of record is responsible for paying it, and that a registered importer can claim an input tax credit if it meets the credit requirements (CRA imports and exports). Recording the border invoice is in GST on imports and customs invoices.
For British Columbia, the province says border and postal import charges generally do not include PST on goods imported for resale. If PST was charged anyway, apply to the Canada Border Services Agency for a refund (Bulletin PST 208). The bulletin names Form B2, but since October 21, 2024 commercial adjustments are made on the Commercial Accounting Declaration in the CBSA's CARM system, and goods imported by mail use a separate form (CBSA D17-2-1). For Saskatchewan or Manitoba tax on imported stock, check the province's own bulletin before relying on a resale number at the border.
When is a business sale zero-rated or exempt instead?
A buyer's plan to resell does not make a sale zero-rated or exempt. What is sold, where it goes and, in a few cases, who is buying decides; the CRA sorts supplies into taxable, zero-rated and exempt (type of supply). Choosing the code for each is in exempt, zero-rated and out-of-scope sales.
Example
These examples are illustrative and use Canadian dollars. Sellers and buyers are registered for GST/HST, buyers use the regular method, and the goods are standard-rated and bought solely for resale.
A British Columbia wholesaler ships one order to three registered buyers
A British Columbia wholesaler ships C$10,000 of goods to each of three registered buyers on the regular method. The Ontario buyer is charged 13% HST, C$1,300. The Alberta buyer is charged 5% GST, C$500. The British Columbia buyer gives its PST number, so no PST is charged, and is charged 5% GST, C$500. Each buyer claims what it was charged as an input tax credit. The tax line changes with the delivery province, and a resale number changes only the British Columbia line.
A British Columbia retailer buys stock from a British Columbia supplier
A retailer buys C$20,000 of goods for resale and gives the supplier its PST number. The supplier charges no PST, which would have been C$1,400 at 7%, but adds 5% GST of C$1,000. The retailer claims the C$1,000 as an input tax credit. If the supplier charged PST because the number was missed, the retailer can give the number and ask for a refund or credit within 180 days of the charge.
A Saskatchewan vendor sells to another licensed vendor
A Saskatchewan vendor sells C$8,000 of goods to another licensed vendor. It checks the registry and records the buyer's vendor's licence number on the invoice, so it leaves out PST (6% would have been C$480). It still charges 5% GST of C$400, and the registered buyer claims that C$400 as an input tax credit.
Different for you?
- You sell wholesale to buyers in several provinces, or your invoices carry inconsistent tax lines: the correct tax line depends on each buyer's province and registration. Gather your buyer list, their numbers and your invoices, and get bookkeeping help before you set tax codes by buyer or change how the books track tax collected, input tax credits and PST paid in error.
- You left GST/HST off past sales to resellers because a buyer said it was exempt or gave a resale number: the tax you should have collected may still be owed, and a corporation's directors can be personally liable for GST/HST it fails to remit, with assessment possible for two years after a director leaves (section 323). List each invoice with the buyer, date, amount and the number or form they gave, then see registered but did not charge GST/HST and correcting a filed GST/HST return, and get bookkeeping help to rebuild the tax lines before you amend returns or bill buyers.
- A supplier charged tax on stock you resell: list each invoice with the tax charged, the date and the number you gave. The deadlines above run from the charge, the payment or the overpayment, depending on the province. Gather the invoices and get bookkeeping help to check which routes are still open.
- You are unsure whether you must register for PST: see do you need to register for and charge PST.
- A buyer in Quebec is involved: this page does not cover QST; start with charging GST/HST, PST and QST by province.
- Your buyer is a First Nations band or Status customer: see GST/HST on sales to First Nations.
- Your buyer is in the US or you export goods: see charging GST/HST to US customers.
- You need to claim credits or file the return: see filing GST/HST and input tax credits.
Figures on this page
| Figure | Value | Source |
|---|---|---|
| Usual GST/HST input tax credit claim window For a person who is not a specified person, measured from the end of the original reporting period; claim by the due date for the last reporting period ending in that window, subject to statutory exceptions | Four years | Justice Laws: Excise Tax Act, section 225(4)(b) Checked |
| Usual GST/HST records retention period Generally from the end of the last tax year to which the records relate; long-term property records and other exceptions can require longer retention | 6 years | CRA: GST/HST records to keep Checked |
| British Columbia PST general rate | 7% | British Columbia: Provincial sales tax (PST) Checked |
| Saskatchewan PST rate | 6% | Saskatchewan: Provincial Sales Tax Checked |
| Manitoba retail sales tax (RST) rate | 7% | Manitoba Finance: Retail Sales Tax Checked |
| BC minimum period a wholesaler not required to register keeps records of PST exemptions it claims At least; applies to a wholesaler that is not required to be registered | Five years | British Columbia: Bulletin PST 104, Wholesalers Checked |
| Saskatchewan age at which PST records may be destroyed without permission Records at least this old may be destroyed without Finance's permission; younger records must not be destroyed without it | Six years | Saskatchewan: Bulletin PST-5, Registration and Reporting Requirements Checked |
| Manitoba RST record retention period Records and documents kept for audit; general ledgers must be kept indefinitely | The current fiscal year plus the preceding six years | Manitoba: Bulletin RST 004, Information for Vendors Checked |
| BC window to ask a supplier to refund or credit PST charged on goods for resale From the date the PST was charged; after that the supplier cannot refund or credit it | 180 days | British Columbia: Bulletin PST 208, Goods for Resale Checked |
| BC window for the ministry to receive a claim to refund PST paid on goods for resale The director must receive the claim within this time after the date the amount was paid or remitted; separate from the 180-day supplier route | Four years | British Columbia: Provincial Sales Tax Act, section 166(1)(b) Checked |
| BC PST remitted in the prior 12 months to qualify for a ministry refund of PST paid on goods for resale Also requires being registered to collect PST; effective July 1, 2024; measured over the 12 months before the month the ministry receives the claim | $500 | British Columbia: Bulletin PST 208, Goods for Resale Checked |
| BC smallest PST refund the ministry issues The ministry cannot issue a refund of less than this amount | $10 | British Columbia: Bulletin PST 208, Goods for Resale Checked |
| Saskatchewan window to claim a refund of PST paid in error on goods bought for resale From the date of overpayment | Four years | Saskatchewan: Bulletin PST-5, Registration and Reporting Requirements Checked |
| Manitoba window for an internal credit adjustment or refund claim for RST paid in error From the date the RST was paid in error | Two years | Manitoba: Bulletin RST 004, Information for Vendors Checked |
Primary sources
- CRA: Type of supply
- CRA: Charge and collect the correct rate
- CRA: GST/HST calculator and rates
- CRA: Guide RC4022, General information for GST/HST registrants
- CRA: GST/HST imports and exports
- CRA: Guide RC4058, The Quick Method of accounting for GST/HST
- Justice Laws: Excise Tax Act, section 165
- Justice Laws: Excise Tax Act, section 169
- Justice Laws: Excise Tax Act, section 172 (personal use and benefits)
- Justice Laws: Excise Tax Act, section 156 (election between group members)
- Justice Laws: Excise Tax Act, section 171 (small supplier becoming a registrant)
- Justice Laws: Excise Tax Act, section 323 (directors' liability)
- CBSA: Memorandum D17-2-1, Adjusting Commercial Accounting Declarations
- Justice Laws: Excise Tax Act, section 221
- Justice Laws: Excise Tax Act, section 123 (commercial activity)
- British Columbia: Bulletin PST 208, Goods for Resale
- British Columbia: Bulletin PST 104, Wholesalers
- British Columbia: Bulletin PST 003, Small Sellers
- Saskatchewan: Bulletin PST-5, Registration and Reporting Requirements
- Manitoba: Bulletin RST 004, Information for Vendors
About this guide
Published by Cloud Accounting under standing professional approval. This version has no separately recorded personal review. It explains general rules for the tax year shown. It is not advice for your situation.
Changes
- : First published.