Line 101 on the GST/HST return

March 24, 2018

Line 101 of the GST/HST return is the line where registrants are to report “Total Sales”. Lots of questions arise as to what exactly is meant by Total Sales. Does that include only sales on which GST/HST is collected? Should it include sales of goods shipped outside of Canada where no GST/HST was collected? What about zero-rated sales, like exports or groceries? Or exempt sales like residential rental income? Should Canada Revenue Agency expect the tax collected and reported on line 103 to somehow reconcile with the total sales reported on line 101?

Canada Revenue Agency (CRA) states that you are to “enter the total amount of revenue from supplies of goods and services, including zero-rated supplies and other revenue”. This means that it is your total sales, including exempt and zero-rated revenues that must be reported. As a result, there will not likely be any correlation between the tax reported on line 103 and the revenue reported on line 101. You are not to include GST, HST or any provincial sales tax that you have collected on line 101, unless you are using the Quick method of accounting, in which case you should include the GST/HST that you collect in your Total Sales figure.

In fact, it is much more important that the sum of the revenues reported on line 101 of your GST/HST returns agrees to the total gross revenue you report when you file your T2 corporate income tax return.

CRA routinely conduct HST audits on businesses where the sales reported on the HST returns is less than the gross revenue reported on the income tax return. And vice versa, if the gross income on your income tax return is less than the sales reported on line 101 of your GST/HST return, you may be subject to an income tax audit!

The conclusion is that even though line 101 on the GST/HST return has no impact on the amount of GST/HST actually owing, it pays to take the time to provide the correct number.

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