Line 101 on the GST/HST return

Line 101 on the GST/HST return

Line 101 of the GST/HST return is the line where registrants are to report “Total Sales”. Lots of questions arise as to what exactly is meant by Total Sales. Does that include only sales on which GST/HST is collected? Should it include sales of goods shipped outside of Canada where no GST/HST was collected? What about zero-rated sales, like exports or groceries? Or exempt sales like residential rental income? Should Canada Revenue Agency expect the tax collected and reported on line 103 to somehow reconcile with the total sales reported on line 101?

Canada Revenue Agency (CRA) states that you are to “enter the total amount of revenue from supplies of goods and services, including zero-rated supplies and other revenue”. This means that it is your total sales, including exempt and zero-rated revenues that must be reported. As a result, there will not likely be any correlation between the tax reported on line 103 and the revenue reported on line 101.

CRA routinely conduct HST audits on businesses where the sales reported on the HST returns is less than the gross revenue reported on the income tax return. And vice versa, if the gross income on your income tax return is less than the sales reported on line 101 of your GST/HST return, you may be subject to an income tax audit! As a result, it is extremely important that the sum of the revenues reported on line 101 of your GST/HST return reconciles to the total gross revenue you report when you file your T2 corporate or T1 personal income tax return.

If you are using the Quick method of accounting for HST, the figure you report on line 101 of the GST/HST return should include 100% of the GST/HST that you collect in addition to the sales figures themselves. For income tax purposes, don’t forget that you must include in your income the difference between the GST/HST that you’ve collected and the GST/HST that you were required to remit. There will be a difference, therefore, between the figure reported on line 101 of your GST/HST return and the gross revenue you report for income tax purposes.

In conclusion, even though line 101 on the GST/HST return has no impact on the amount of GST/HST actually owing, it pays to take the time to provide the correct number.

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Author

Garth Steele, CPA, CA
Partner
gsteele@welchllp.com
613-236-9191 #516