The supply of property or a service is said to be a taxable supply (i.e. subject to GST/HST or QST) when it is made in the course of commercial activities.

GST at the rate of 5% and QST at the rate of 9.975% apply to the price of the supply, unless the supply is exempt or zero-rated (meaning taxable at 0%).

Registrants that acquire a taxable supply of property or services in the course of their commercial activities may be entitled to an input tax credit (ITC) or an input tax refund (ITR).

Supplies that are subject to 5% GST and 9.975% QST include the following:

• sales of tools to a business that specializes in small engine repair, as well as lawnmowers sold by the business
• sales of moulds to a bakery, as well as sales of chocolates by the bakery
• sales of computers to a law firm, as well as legal services provided by the firm
• sales of new residential complexes
• sales and rentals of commercial buildings
• retail automobile sales and automobile rentals
• sales of gasoline and automobile repair services
• sales of soft drinks, candy and potato chips
• sales of clothing and footwear
• the rental of hotel accommodations for a night
• the provision of barber and hairstylist services
• sales of printed books that have an International Standard Book Number (ISBN) (GST/HST system)