GST 114 Bond – What It Is & Why It’s Needed

Goods imported into Canada are subject to the Goods and Service Tax (GST) or the Harmonized Sales Tax (HST). The GST was implemented in Canada on January 1, 1991. The GST/HST is a tax on final consumption, however, unlike a retail sales tax, the 114 GST/HST has a multistage collection process.

GST is applied at the border to all imported Commercial goods destined or supplied to all provinces within Canada. In turn, you will also collect the GST from your Canadian customers by billing them GST Sales Tax on your invoice to them. All Firms with (Canadian) annual sales exceeding $30,000 must register and must post what’s known as a GST 114 Bond, GST Bond or NON-RESIDENT G.S.T. BOND. You will be issued a Business Number (BN) with an annex code of “RT” for GST and “RM” for importing. Remember, even if you do not need to register for GST you must still register for a BN for importing into Canada, which will include an annex code of RM for importing only.

Registered firms collect the GST on the sale in Canada of taxable goods and services supplied to all provinces. After registering you would prepare and submit a GST return quarterly showing the amount of tax you charged and the amount of tax you paid. If the amount of GST charged is greater than the amount you paid, the difference would be owed to the Government of Canada. If the amount of GST paid is larger, you could claim a refund. Transborder shipping costs are not subject to the GST/HST.

How Do I get a GST 114 Bond, GST Bond or NON-RESIDENT G.S.T. BOND?

ALIGNED Insurance will secure a GST 114 Bond, GST Bond or NON-RESIDENT G.S.T. BOND on your behalf.  ALIGNED just requires that the attached GST 114 Bond Application be completed.

ALIGNED Across Canada   100% Canadian owned, ALIGNED is a premiere insurance brokerage that serves more than 1,400 clients across the country. ALIGNED’s offices in Toronto, Calgary and Vancouver are supported by a national operations centre in Cambridge, Ontario. Uniquely within the industry, ALIGNED creates, negotiates and delivers the best business insurance and risk management strategies/solutions to organizations like yours.

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