Under the terms of a contract for home renovation work to be performed for the appellant (a real estate agent) by the respondent, the respondent was to be paid 35% of the sale price “in consideration of the renovation work” with a minimum of $805,000 and a maximum of $910,000. After the house was sold, the respondent invoiced the appellant for $805,000 (which was paid) plus $40,250 GST and $80,299 QST (which was disputed) on the day that she became registered for GST/QST purposes.
In affirming the finding below that “the right to bring an action to recover the sales taxes is not subject to the collector having been registered with the tax authorities when the services were provided,”. Dutil JA stated (at paras 12 and 13):
Sections 223 and 224 of the Excise Tax Act and the Sections 425 and 427 of the Act Respecting the Québec Sales Tax, demonstrate that the taxes are payable as a function of the supply of a taxable service (in this instance) and not the registration with the taxing authorities by the supplier of the service. The right of recovery by legal proceedings is specifically created by the statutes as if the tax debt was due to the supplier and not the taxing authority.
… [T]he services in question are taxable because the law provides that unless specifically stipulated, GST and PST are not included in the gross price for the taxable goods or service.
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