How to Charge GST/QST for Services vs. Goods: What’s the Difference? — Montreal CPA

Charging tax on goods is straightforward — but services are far more complex. The rules for services depend on where the service is performed, where it is used or enjoyed, the nature of the service, and whether exemptions apply. Misunderstanding these rules results in under-charging or over-charging tax, both of which create audit exposure. This guide explains how to correctly charge GST/QST for services and goods using Mackisen’s compliance structure.

Why This Distinction Matters
Goods follow place-of-delivery rules. Services follow place-of-supply rules. Mixing them up leads to incorrect tax charges and possible reassessments.

Legal and Regulatory Framework
GST and QST rules are found in the Excise Tax Act and Tax Administration Act. Place-of-supply rules determine which tax applies. Hickman Motors (1997) reinforces that businesses must apply correct tax based on transaction nature.

What Happens When You Charge the Wrong Tax
Imagine charging GST/QST on a service delivered to a client in Ontario. Ontario does not use QST — it uses HST. The client challenges your invoice. You must issue refunds, correct your books, and possibly amend your GST/QST returns. Worse, during an audit, CRA discovers the error and requires correction for all similar invoices over multiple years. The cost quickly adds up.

Learning Section: Tax on Goods vs. Services
Goods: Tax based on delivery location
Services: Tax based on location of customer or where service is used
Digital services: Tax based on user location
Exports: Usually zero-rated

SEO Learning: Primary and Secondary Keywords
Primary: GST QST for services Quebec, tax rules goods vs services, Montreal CPA GST help.
Secondary: place of supply Quebec, tax on services Canada, how to charge GST QST.

How to Charge GST/QST Properly
For goods delivered in Quebec → GST + QST
For goods delivered outside Quebec → GST or HST
For services to Quebec customers → GST + QST
For services to other provinces → GST or HST
For services to U.S. clients → usually 0%
For digital services to Quebec users → GST + QST

Documentation Section
Invoices
Delivery confirmations
Service contracts
Customer address verification
POS reports
All must be kept for six years.

Common Mistakes
Charging QST to customers in Ontario
Not charging QST to Quebec clients
Incorrect digital service tax
Confusing exempt vs. zero-rated services

Winning With Revenue Québec and Canada
Mackisen reviews your business model, determines correct tax rules for your goods/services, configures invoicing, and ensures accurate GST/QST application.

Mackisen Service Hub
We provide tax-rule determination, invoicing setup, compliance review, and audit defense.

Why Mackisen
With decades of experience, Mackisen ensures your tax application is accurate, compliant, and protected from reassessments.