A GST exemption means no GST/HST is charged on the exempt supply, while a zero-rated supply is taxable at 0%. The difference affects the supplier’s input-tax-credit position. Common exempt supplies include sales of housing last used by an individual as a place of residence, long-term residential rentals (one month or more), most health, medical and dental services performed by licensed physicians, dentists, nurses and certain other healthcare practitioners for medical reasons, many educational services and most services provided by financial institutions; basic groceries, prescription drugs and most exports of goods and services taxable in Canada are zero-rated instead.
Compare the three categories
| Supply | GST/HST charged | Business purchases | Small-supplier test |
|---|---|---|---|
| Taxable at a positive rate | Applicable GST/HST rate | A registrant may claim eligible input tax credits (ITCs) for commercial use | Generally included |
| Zero-rated | 0% | A registrant may claim eligible ITCs for commercial use | Generally included |
| Exempt | No GST/HST | ITCs generally cannot be claimed for expenses used to make exempt supplies | Generally excluded |
ITCs require registration, eligible commercial use and adequate documentation; a zero-rated sale does not create an automatic refund for every purchase. Some public service bodies may qualify for a separate rebate for public service bodies on expenses related to exempt supplies. CRA: type of supply; CRA: input tax credits.
GST exemption list: common exempt and zero-rated supplies in Canada
This GST exemption list groups common exempt and zero-rated categories; it is not a full list, and the facts of a particular supply still have to be checked against the CRA source. Ontario also layers its own point-of-sale rebate on top of these categories, crediting the 8% provincial part of HST on qualifying books, children’s clothing and similar goods; see the Ontario HST exemptions list for the details.
| Category | Exempt or zero-rated | Typical examples | CRA source |
|---|---|---|---|
| Housing & long-term rent | Exempt | Sale of housing last used by an individual as a place of residence; long-term residential rent (1 month or more) and condo fees | RC4022 |
| Health, medical & dental | Exempt | Most health, medical and dental services performed for medical reasons by licensed physicians, dentists and certain other practitioners | RC4022 |
| Child care | Exempt | Child care whose primary purpose is care and supervision of children 14 or under, for periods of less than 24 hours a day | RC4022 |
| Education | Exempt | Qualifying vocational courses attesting to competence in a trade or vocation (subject to the GST29 election exception), tutoring approved for credit or following a school-authority curriculum, music lessons | RC4022 |
| Financial services & insurance | Exempt | Most financial services, such as lending money, operating deposit accounts and issuing insurance policies | RC4022 |
| Charities & public institutions | Exempt | Most property and services supplied by registered charities and public institutions | RC4022 |
| Basic groceries | Zero-rated | Milk, bread, vegetables | RC4022 |
| Agriculture & fishery | Zero-rated | Grain, raw wool and dried tobacco leaves; most farm livestock; most fishery products such as fish for human consumption | RC4022 |
| Health products | Zero-rated | Prescription drugs, certain medical devices (hearing aids, artificial teeth), feminine hygiene products | RC4022 |
| Exports & international transport | Zero-rated | Most goods and services taxable in Canada, when exported; many transportation services starting or ending outside Canada | RC4022 |
For the CRA’s full set of about 35 supply examples with their tax status, see CRA: type of supply.
Examples of zero-rated supplies
The CRA lists basic groceries such as milk, bread and vegetables; prescription drugs; and certain medical devices among examples of zero-rated supplies. Specific food categories such as soft drinks, candy and snack foods can be taxable, so do not code every grocery-store item at 0%. Certain exports may be zero-rated when the relevant conditions are met; a foreign billing address alone is not enough to classify every service. CRA: supply examples; CRA: basic groceries; CRA: exports.
Example: A registered grocer sells a qualifying loaf of bread for $5. The GST/HST on that supply is $0. If the grocer pays GST/HST on an eligible commercial expense, the grocer may claim an ITC subject to the normal requirements. The sale remains a taxable supply for the small-supplier calculation.
Examples of GST-exempt supplies
CRA examples include most health and dental services provided by licensed physicians or dentists for medical reasons, most long-term residential rent and many financial services. The facts and statutory conditions matter: a service performed by a health professional is not automatically exempt in every circumstance. CRA: type of supply.
Example: A qualifying exempt residential rental has no GST/HST added to the rent. The landlord generally cannot claim ITCs for expenses used to make that exempt rental. An exempt sale and a taxable sale to an eligible purchaser receiving special tax relief are different situations. Sales of housing last used by an individual as a residence are generally exempt too, unlike new homes sold by a builder, which are generally taxable at the applicable GST/HST rate: 5% GST in non-HST provinces and HST in participating provinces. Eligible buyers may qualify for a GST/HST new housing rebate.
Commercial rent is different: renting out retail, office or other commercial space is generally a taxable supply unless a specific exemption applies, unlike the long-term residential rental above. The GST/HST rates by province apply to that rent. CRA: taxable supplies.
Are charities and non-profits exempt from GST/HST?
Not automatically. The GST/HST applies to most property and services that non-profit organizations supply; only certain supplies made under specific conditions are exempt, such as some memberships and property and services provided by governments, NPOs, municipalities and other public service bodies, including municipal transit and standard residential services. Registered charities and other public institutions have broader relief: most of the property and services they supply are exempt from GST/HST. A public service body that makes exempt supplies may still claim a GST/HST public service bodies’ rebate on part of the tax paid on related expenses, whether or not it is registered. CRA: GST/HST information for non-profit organizations; CRA: GST/HST public service bodies’ rebate.
What if an expense supports both activities?
Separate expenses used exclusively in commercial activities from those used exclusively to make exempt supplies. For shared costs, apply the relevant CRA allocation rules and keep the calculation. For example, the CRA illustrates a fair and reasonable allocation where 70% of a utility bill relates to a taxable store and 30% to a residential apartment; subject to the other conditions, 70% of the HST on that bill is eligible for an ITC. Particular rules apply to different kinds of property and expenses. CRA: calculate the ITC eligibility percentage.
Is the $30,000 small-supplier rule an exemption?
For most businesses, the CRA looks at worldwide taxable revenue, including zero-rated supplies and relevant associated-person revenue, over a single calendar quarter and over consecutive quarters. Exempt supplies are generally excluded. Exceeding the limit in one quarter has different timing from exceeding it over four quarters. A qualifying unregistered small supplier generally does not collect GST/HST and cannot claim ITCs; eligible businesses may choose to register voluntarily. Some activities, including taxi and commercial ride-sharing, have special registration requirements. CRA: when to register.
Does a provincial PST exemption also remove GST?
No. BC PST, Saskatchewan PST, Manitoba RST and Quebec QST each have their own rules. Check each tax independently. For example, BC lists certain printed books and qualifying children’s clothing among PST exemptions; the federal GST/HST classification must still be checked. BC: PST exemptions and documentation.
A BC purchaser buying qualifying goods solely for resale can generally give the seller its PST number; an eligible purchaser without one may use the applicable certificate, such as FIN 490, when its conditions are met. The seller must retain the required evidence. A certificate does not turn a non-qualifying purchase into an exempt purchase. BC: exemption documentation; FIN 490.
What about GST/HST relief for First Nations purchasers?
CRA’s section 87 guidance describes relief for eligible status Indians (individuals who are registered, or entitled to be registered, under the Indian Act), bands and band-empowered entities in specified circumstances. Relief requires proof CRA accepts and depends on the transaction. For example, eligible property bought off reserve and delivered to a reserve by the seller or its agent may qualify; the seller must retain the required status and delivery evidence. Rules vary by purchaser, property or service and transaction, and other First Nations taxes may apply. Status alone does not make every off-reserve purchase tax-free. CRA: GST/HST and First Nations peoples.
Sources checked October 21, 2026.