eBay

gezeilstra · ‎04-19-2005

Anyone know what this is? I stumbled across some basic info, sounds like businesses registered for GST can claim a GST input credit on used items purchased for the business, but not charged GST on them, such as at a garage sale or flea market (or from a Small Supplier). The credit is calculated out of the purchase price, so that could be a great credit for people who buy a lot of used items where they are not charged GST.

Problem is, when I try to find out more info on it, I get into to much "accountaneze", and am over my head. Anyone claim this credit, or have an accountant who can explain it?
Thanks!

recped · ‎04-19-2005

It's certainly complex but I did find this...

For supplies made after April 23, 1996, registrants are no longer entitled to claim notional ITCs on purchases of used tangible personal property which they purchase or accept as trade-ins from a person not required to charge the GST (e.g., consumers)

Looks like notional credit are no longer available but perhaps I'm reading it wrong. Look at this page for more details...

http://www.cra-arc.gc.ca/E/pub/gm/b-084r/b-084r-e.html#P38_1451

Ben

"What else could I do? I had no trade so I became a peddler" - Lazarus Greenberg 1915

"What else could I do? I had no trade so I became a peddler" - Lazarus Greenberg 1915
- answering Trolls is voluntary, my policy is not to participate.

gezeilstra · ‎04-20-2005

Thanks, would be a lot of work this soon before taxes anyway 🙂

lina-mallows · ‎04-25-2005

Notional credits are long gone.
In theory, the assumption was that items sold by non GST registered sellers, had already at some point had some GST tax paid on them.
Therefore, it was decided to allow registered collectors of GST to take a "notional credit" presumed to be included in the value paid.
This created HUGE windfalls in the precious metals business. In some areas of Canada (READ as Quebec) some GST registered buyers were paying FULL value for gold and silver jewellery- OR MORE! from the public. In turn they would sell this to a refiner, and take the full 7% Notional credit too boot! As well, they were entitled to a QST credit of 7.5% (compounded on the 7%) as Quebec also allowed the QST component to be calculated as part of the notional credits.
So, in effect, you- as a GST registered dealer buy $100 worth of merchandise from a non GST registered member of the public, at whatever price. At the end of the day, you have $115 (in Quebec- at that time). Not a bad way to have made a buck!

buckaru · ‎05-05-2005

Anyone selling to the USA should become GST registered, regardless of what your income level is! Most people do not register because their income level is less than the amount where they require you to register, so they dont register. However, If you are not registered, you are giving money away to the government. If you export more than you sell within Canada, the you can probably claim a GST refund for your business. At the end of the year, you total up all the GST you paid out for your business (lots because everything has GST on it), then you subtract the amount of GST you collected (little because you did not sell much within Canada). The difference is what the government gives you back. The down side is that your record keeping gets a bit more complicated because you have to keep track of GST on everything. Also, because you are getting refunds every year, expect to be audited as well. We have had to provide additional info for the last 3 years.