What is GST?
GST is the Goods and Services Tax and it refers to a value added tax that was introduced in the country on January 1st, 1991 by the prime minister of the country, Brian Mulroney and Michael Wilson, the finance minister. This tax replaced the Manufacturers' Sales Tax (MST).
The prime minister said that the GST was introduced as the MST was hurting the manufacturing sector while exporting. As of January 2009 the rate of GST across the country is 5%.
The tax is levied on the supplies of goods and services that are made in Canada and include a number of products except some politically sensitive items such as residential rent, groceries, financial services and medical services.
GST was not well accepted by the people of the country and caused a tax revolt. Surveys suggest that there has been an increase in the size of the underground economy of the country due to the implementation of the GST. The political ramifications of the tax was severe as well and led to the popularity of the government plummeting.
