Legal Blog

GST

GST. The initials no longer conjure up the knee-jerk negative response that they did in years past. Most business people are accustomed to the tax and it does not cause them too much bother. However, even after ten years there is still some confusion, at least in the minds of some businesses, as to the applicability of the tax. Fast Trac Bobcat & Excavating Service v. KWH Construction Ltd., a 2001 decision of the British Columbia Supreme Court, illustrates one aspect of the confusion.

Silence 

A sub quoted a job for a general and was successful. The reasons for decision are sparse but, we assume, there was a quote, an acceptance, and no formal contract. The quote set out a specific sum and made no mention of GST. The general wanted to pay the sub the quoted sum without additional GST and the sub wanted the sum plus GST.

Omnipresent 

We will not bore you with the judge’s tax analysis to determine the issue. The judge concluded that if GST is not specifically mentioned in a contract for the supply of goods and services, it is presumed to be payable in addition to the amount specified. The only time that GST is not payable in addition to the specified amount is if the contract specifically states that it is included. Accordingly, the general had to pay the sub the tendered amount plus GST.