The short answer
GST is a 5% federal sales tax charged across Canada and administered by the Canada Revenue Agency (CRA). If your business is registered, you can claim back the GST you pay on business purchases. PST is a provincial retail sales tax charged in British Columbia, Manitoba, Saskatchewan and (as QST) Quebec. In BC it’s 7%, it’s run by the provincial Ministry of Finance, it applies only to certain goods and services, and the PST your business pays is generally not recoverable.
If you run a business in BC, you deal with two sales taxes, two account numbers and two separate returns. If nobody ever sat you down and explained why, you’re not alone. GST and PST look similar on a receipt, but they work very differently behind the scenes, and those differences affect what you charge, what you can claim back and how your books should be set up.
This guide explains the difference between GST and PST in plain language, with real BC examples, so you can see exactly where each one fits in your business.
GST vs. PST at a glance
| GST | PST (British Columbia) | |
|---|---|---|
| Who charges it | Federal government | Provincial government |
| Rate | 5% everywhere in Canada | 7% on most taxable items (some items differ, e.g. 10% on liquor) |
| What it applies to | Most goods and services | Goods, software and a specific list of services |
| Who you pay | Canada Revenue Agency (CRA) | BC Ministry of Finance |
| When you must register | Once taxable sales pass $30,000 over four consecutive calendar quarters (voluntary registration allowed sooner) | When you sell taxable goods, software or services in BC, unless you qualify as a small seller ($10,000 or less in taxable sales, plus other conditions) |
| Can you recover the tax you pay? | Yes, through input tax credits (ITCs) | Generally no; it’s a cost of doing business |
| Where you file | CRA (My Business Account, GST/HST NETFILE) | eTaxBC |
| Type of tax | Value-added tax, charged at each stage of the supply chain | Retail sales tax, meant to be paid once by the final user |
What is GST?
The Goods and Services Tax (GST) is a 5% federal tax on most goods and services sold in Canada. Businesses registered for GST charge it on their sales, collect it from customers and send it to the CRA, minus the GST they paid on their own business purchases.
That last part is what makes GST a value-added tax. Each business in the supply chain charges GST on its sales and claims back the GST it paid on its inputs, so the tax ultimately lands on the final consumer instead of stacking up along the way.
Most small businesses have to register once their taxable sales pass $30,000 over four consecutive calendar quarters. Many register earlier on purpose, so they can claim back the GST they pay on startup costs. Some supplies are zero-rated (taxed at 0%, like basic groceries) and some are exempt (like most residential rent).
What is PST, and which provinces charge it?
Provincial Sales Tax (PST) is a retail sales tax set and collected by individual provinces. Unlike GST, it’s designed to be paid once, by the person or business that ultimately uses the item, rather than at every step of the supply chain.
Only four provinces run their own separate sales tax:
| Province | Provincial tax | Rate | Total with 5% GST |
|---|---|---|---|
| British Columbia | PST | 7% | 12% |
| Manitoba | RST (Retail Sales Tax) | 7% | 12% |
| Saskatchewan | PST | 6% | 11% |
| Quebec | QST (Quebec Sales Tax) | 9.975% | 14.975% |
Ontario (13%), Nova Scotia (14%), New Brunswick, Newfoundland and Labrador, and Prince Edward Island (15%) use a single Harmonized Sales Tax instead. Alberta and the three territories charge only the 5% GST.
Each PST province writes its own rules, so something taxable in BC isn’t necessarily taxable in Saskatchewan. Quebec’s QST is different again: it works much like GST, with refunds for tax paid on business purchases.
In BC, PST is administered by the Ministry of Finance. You register, file and pay through eTaxBC, a completely separate system from your CRA account.
Where does HST fit in?
HST (Harmonized Sales Tax) combines GST and the provincial portion into one tax, administered by the CRA under the same rules as GST. In HST provinces, businesses register once, charge one tax and file one return.
Does BC have HST? Not anymore. BC switched to HST in July 2010, but after a 2011 referendum, the province went back to separate GST and PST on April 1, 2013. That’s why BC businesses still juggle two taxes today.
If you sell to customers in an HST province, the place-of-supply rules usually mean you charge that province’s HST rate instead of 5% GST. For example, a Vancouver business shipping goods to a customer in Toronto would generally charge 13% HST.
The four differences that actually affect your business
Rates and definitions are the easy part. These are the differences that show up in your invoices, your expenses and your books.
1. You can claim back GST, but PST is usually a cost
GST-registered businesses claim input tax credits (ITCs) for the GST they pay on business purchases. In BC, there’s no equivalent for PST. The PST you pay simply becomes part of what the item costs you.
Example: You buy a $1,000 laptop for your business from a Vancouver retailer.
- GST: $50. Claimable as an input tax credit on your next GST return.
- PST: $70. Not recoverable. It becomes part of the laptop’s cost.
- Total paid: $1,120. True cost to your business: $1,070.
What this means for your books: GST you pay should be tracked in its own account so you can claim it back. PST you pay is recorded as part of the expense or asset. When the two get mixed together, businesses either miss ITCs they’re entitled to or claim ones they aren’t, and both tend to surface in a CRA review.
2. They don’t always apply to the same things
GST applies to most goods and services. BC PST applies to a narrower list: goods, software, accommodation, legal services, telecommunication services, online marketplace services and “related services,” meaning services to goods such as repairs, installation and maintenance.
That means many BC service businesses, including consultants, designers, marketing agencies and (for now) bookkeepers and accountants, charge GST only. But the line isn’t always obvious:
- A computer technician who repairs a laptop charges GST and PST, because the repair is a service to a good. The same technician running a training session charges GST only.
- It can work the other way, too. Children’s clothing is exempt from BC PST but still has GST.
3. Two registrations, two returns, two deadlines
GST is registered and filed with the CRA. PST is registered and filed with the BC Ministry of Finance through eTaxBC. They have different account numbers, and each one gets its own filing frequency, so a business might file GST annually and PST quarterly.
A few PST details catch people off guard:
- You owe the PST you charged, whether or not your customer has paid you yet.
- You still have to file a return for a period with no sales (a “nil” return).
- BC pays a small commission to businesses that file and pay PST on time, up to $198 per reporting period. File late and you lose it, on top of any penalty and interest.
4. You can owe PST even when nobody charged you
If your business buys taxable goods or software from a seller outside BC who doesn’t charge BC PST, such as equipment from an Alberta supplier or a software subscription from a US company, you’re generally responsible for paying that PST yourself. This is called self-assessment, and businesses registered for PST report it on their regular PST return.
It’s one of the most commonly missed items in small business books, and an easy thing for a provincial auditor to find.
Do I have to charge both GST and PST?
It comes down to three questions:
- What are you selling? Goods, software and the listed services above usually carry PST in BC. Most other services carry GST only.
- Are you registered? You charge GST once you’re registered (required past $30,000 in taxable sales). You charge PST if you sell taxable items in BC, unless you qualify as a small seller.
- Where is your customer? Sales to other provinces may call for HST or no BC PST at all, and many exports outside Canada are zero-rated for GST.
Example: A Vancouver furniture shop sells a $500 side table to a customer in Burnaby.
| Invoice line | Amount |
|---|---|
| Side table | $500.00 |
| GST (5%) | $25.00 |
| PST (7%) | $35.00 |
| Total | $560.00 |
Both taxes are calculated on the $500 pre-tax price. PST is never charged on top of GST. Show each tax as its own line on your invoice, along with your GST registration number.
What changed for BC PST in 2026?
In February 2026, BC’s provincial budget announced that PST would expand to several professional services on October 1, 2026, including accounting and bookkeeping, architectural, engineering and geoscience services, security services and non-residential real estate services.
On September 18, 2026, the province paused that expansion, citing ongoing trade uncertainty. For now, those services remain PST-exempt, and no new start date has been announced.
What this means for you:
- If you buy bookkeeping, accounting or another affected service, you shouldn’t be charged PST on it right now.
- If your business provides one of these services and registered for PST to prepare, you can cancel that registration through eTaxBC or by calling the Ministry of Finance.
- The expansion could still return at a later date. We’ll update this article when the province shares more.
When Oakton went through this PST change, we applied for the PST registration and sent a letter to all of our existing clients. Then, when the provincial PST was paused, the update was immediately posted on our social media channels to make both our clients and the public aware of the change.
Common GST and PST mistakes we see in small business books
Most sales tax problems aren’t dramatic. They’re small, repeated errors that add up over a year or two. These are the ones we fix most often:
- Charging PST on services that aren’t taxable, or forgetting it on ones that are, like repairs.
- Claiming PST paid as an input tax credit. Only GST qualifies.
- Missing self-assessment on equipment or software bought from outside BC.
- Calculating PST on the GST-inclusive total instead of the pre-tax price.
- Treating collected tax as operating cash. The GST and PST you collect isn’t your money. The CRA considers GST to be held in trust until you remit it, and it’s painful to come up with all at once at filing time.
- Skipping nil returns or filing late, which leads to penalties, interest and lost PST commission.
Oakton has uncovered and managed similar errors over the years. One client did not keep any receipts stating that our team could access bank statements for this purpose, but in Canada, for any expenses over $100 you have to have a clear receipt that breaks down the GST and PST paid in order to claim the GST ITC.
In another example, PST on short term accommodations is posted as 8% and we had a client who was only charging 7%. Upon discovering this, the Oakton team was able to go back through and help the client rectify the difference in PST without too much disruption to the overall books.
When it makes sense to hand sales tax over to a bookkeeper
Neither tax is complicated on its own. The trouble comes from running two systems side by side, with different rules, agencies, accounts and deadlines, on top of everything else your business needs from you.
It may be time to get help if:
- You’re not sure which of your sales should carry PST.
- Filing day means digging through receipts to work out what you paid.
- You’ve recently registered, crossed a threshold or started selling outside BC.
- You’ve received a letter from the CRA or the Ministry of Finance.
- Your current bookkeeper files your returns but can’t explain what they’re doing.
At Oakton FC, we set up your GST and PST tax codes correctly in QuickBooks, track what you collect and what you can claim back, and file both returns on time so you keep your PST commission and avoid penalties. Learn more about our Sales Tax Filing services or book a consultation to talk through your setup.
Frequently asked questions
Is GST or PST 5%?
GST is 5% across Canada. PST rates are set by each province: 7% in BC, 7% RST in Manitoba, 6% in Saskatchewan and 9.975% QST in Quebec.
Does BC have HST?
No. BC used HST from 2010 to 2013, then returned to separate GST (5%) and PST (7%) on April 1, 2013.
How much is GST and PST in BC?
On most taxable goods, 12% combined: 5% GST plus 7% PST, each calculated on the pre-tax price. Some items have different PST rates, such as 10% on liquor and higher rates on some vehicles.
Is PST charged on services in BC?
Only some. PST applies to legal services, telecommunication services, accommodation and services to goods such as repairs and installation. Most other services, including bookkeeping and accounting, are GST-only for now.
Can I claim back PST?
Generally no. In BC, Manitoba and Saskatchewan, PST paid on business purchases is a cost. If you buy goods to resell, you can usually buy them PST-exempt using your PST number. Quebec’s QST is the exception and allows refunds similar to GST.
Do I need a PST number if I only sell services?
If none of your services are PST-taxable in BC, you generally don’t need to register. Check the list of taxable services first, especially if you repair, install or maintain goods.
Do I charge PST to customers outside BC?
BC PST generally doesn’t apply to goods you ship or deliver to a customer outside the province. Software and services can follow different rules, and the customer’s province may have its own sales tax, so check before you invoice.
About the author
Kristina Hawkins is the founder of Oakton FC, a bookkeeping and payroll firm that has helped businesses across BC’s Lower Mainland and Canada since 2018. She completed an Honours program in bookkeeping and works with small and growing businesses to keep their books, payroll and sales tax filings accurate and on time.
This article provides general information about Canadian sales taxes and isn’t tax advice for your specific situation. Sales tax rules change, so confirm details with the CRA, the BC Ministry of Finance or a qualified professional before acting.