HST in British Columbia – General Comments
HST is not a new tax that will make goods and services 12% more expensive. HST replaces the GST and the PST. Effective July 1, 2010, GST and PST no longer exist in the province of British Columbia and both have been replaced by the HST
For example, if you purchased a pair of walking shoes for $100 on June 30, 2010, you would have paid $5 in GST and $7 in PST, the final cost coming to $112. If you purchased the same pair of shoes for $100 on July 1, 2010, you would have paid $12 HST, the final cost coming to $112.
The new HST does not change the cost of buying tangible goods in British Columbia. This is because the new HST rate is equal to the old GST plus the old PST rates charged for tangible goods.
The confusion, and perhaps protest pertaining to the HST, comes from the services industry. Prior to July 1, 2010, there was no PST charged on services, only the 5% GST. Services like haircuts, office cleaning, restaurants, acupuncture, and massage therapy charge 12% HST effective July 1, 2010.
For example, on June 30, 2010 an acupuncture treatment costing $50 would have charged $2.50 in GST for a total cost of $52.50. Effective July 1, 2010, the same acupuncture treatment would have charged $6 HST for a total cost of $56.
Therefore, as consumers, we are paying more for services under HST and yet we are paying the same for goods under HST. For consumers, overall, cost of living is more expensive with the HST.
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