Almost everyone has to pay GST/HST on purchases of taxable supplies of goods and services (other than zero-rated supplies).
However, Indians and some groups and organizations, such as many provincial and territorial governments, do not always pay GST/HST on their purchases.
Additionally, once the value of the particular item is less than $5,000 (GST ex.), no further annual adjustments are required.
While it was relatively easy under the old rules to justify the acquisition was to be used more than 50% for taxable purposes and consequently the 100% upfront claim was reasonable, the new rules will no doubt lead to greater scrutiny of input tax claims by the Revenue and require greater caution being exercised at the time of filing the initial return by the taxpayer to ensure that their claims are not challenged.
As of July 01, 2010, much of Canada has now harmonized their provincial sales tax with GST to create the harmonized sales tax (HST).