The rate of general sales tax officially increased on April 1st by
25% – from 10% to 12.5%. That means that any item on which GST is charged
there would have been an automatic increase, even on old stock. It also meant
that the price on items which are newly zero rated – such as cereals and
luncheon meat -there should have been an automatic decrease in the price. Confused?
Commissioner of General Sales Tax Cynthia Castillo broke it down for us.
Cynthia Castillo, Commissioner of GST
“That means then that if example you have a good on the shelf that
was priced at $1.10 and that good was subject to GST on the first of April,
you have to apply the new rate. So for example the good would no longer be $1.10,
it will be $1.13.”
“How about the items that are newly zero rated?”
“You should see a decrease in the price of that item so again if we
were to use the example of that good that was at $1.10 now the GST would be
removed because it is now at zero percent. The price on the shelf should now
be a dollar. It should go down.”
“Will the price of old stock go up?”
“Yes once that good or service is taxable, it is now subject to tax
at 12.5% across the board.”
“What are some of the items on which people should see the price going
“We should see prices going down on potted meat, luncheon meat, macaroni
and cheese dinner, ramen noodles, exercise books, notepads, school bags, eye
frame for glasses. We have on some agricultural products as well.”
“Should I see the prices on my neighbourhood Chinese shop going up?”
“On the items that are taxable yes. On the items I just listed and
basic food items, we had items that were previously zero rated; coffee, potted
meat, chicken sausages – those were previously zero rated so the prices
should remain the same.”
Castillo says that the GST Department along with the Bureau of Standards
are on an ambitious mission to meet with all 3,000 GST registered businesses
to explain to them the do’s and don’ts of the adjusted tax regime.
This is crucial because according to Castillo, some businesses have been using
GST as an excuse to raise prices.
“There has been a lot of price gouging and for the most part I believe
that GST is being used as an excuse to raise prices and we have called in the
Bureau of Standards, working closely with them to try to mitigate these issues.
The message really is Keith that consumers need to assist in policing the
tax. The message we have been sending very loudly and clearly is that as consumers
we need to start asking for a receipt and that is mandated by law. Every registered
person for GST purposes must have a cash register, especially the retailers,
they have to utilize a cash register or a point of sale system and for ever
purchase a receipt must be issued.
Once you walk into a business, the first question is are you registered
and there should be a GST certificate and that should be prominently displayed,
usually around the cash register area. Once you see that certificate, a consumer
has all right to request a receipt and the taxpayer must issue that receipt.
When that doesn’t happen just call us in and we’ll go and do the
The GST hotline is 222-5294. The toll free hotline for the Bureau of
Standards is 0-800-283-5587.