What is PST?
PST refers to a provincial retail sales tax that is applicable in majority of provinces of Canada on a lot of goods as well as services. However, business persons in Alberta, Yukon, Nunavut and the Northwest Territories are exempted from charging provincial sales taxes. In some of the provinces like Newfoundland and Labrador, New Brunswick, Nova Scotia, the rule is to blend the provincial sales tax with federal goods and services tax to form harmonized sales tax. Ontario will join the Atlantic provinces in having harmonized sales tax (HST). Manitoba calls the provincial sales tax as retail sales tax or RST. The provincial sales tax is known by the name Social Service Tax in British Columbia.
The rate of Provincial Sales Tax differs in each province. It is also calculated on a different mode in each of the provinces. For example in case of Ontario, the rate of provincial sales tax is 8%. This charge is applicable on the particular item’s selling price prior to the application of Goods and Services Tax (GST). British Columbia where the rate is 7%, Saskatchewan which has 5% provincial sales tax, and Manitoba which charges 7% all follow the same procedure for charging provincial sales tax. However in Prince Edward Island and in Quebec the ritual is to charge provincial sales tax on the cumulative selling price and Goods and Services tax.
