B.C.: Are you ready to go back to PST on April 1?

(Dec. 11/12) British Columbia will eliminate HST and return to PST effective April 1, 2013. This means you will need to charge your customers 5% GST instead of 12% HST. Restaurant meals will be exempt from PST once again – something CRFA lobbied hard for during the HST debate. This great news effectively lowers the cost of restaurant meals by 7% and puts more disposable income in consumer pockets.

Also effective April 1, a 10% tax on liquor will return. This will be called the PST instead of the Social Service Tax (SST) on liquor consumption.  The province will use the PST name even though the rate on liquor is higher than the standard 7% PST charged on most other taxable items. The government is reducing liquor mark-ups to pre-HST levels to make up for this additional tax increase on liquor.

If you are building any new restaurants, planning renovations, equipment purchases or other upgrades, CRFA advises you to have as many of those related purchases as possible complete before  April 1 to take advantage of the full 12% HST credit on those purchases. After April 1, you will only be able to claim back the 5% GST portion of those purchases.

Start preparing for the Point of Sale and accounting system changes that you will need for the April 1 change. For more information on the return to the PST in British Columbia, visit www.gov.bc.ca/PST or call the PST transition hotline at 1-877-388-4440.

Click here (PDF) for more information on how the PST will apply to the restaurant industry.

Click here (PDF) to learn more about the reduction of liquor mark-ups with the implementation of the PST.