
What Restaurants Need to Know About The GST Holiday
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02 Jan 2025
As a restaurant owner are you feeling overwhelmed or confused about how to navigate the new GST and HST tax holiday?
In a significant move to support businesses and consumers, the Canadian government has announced a temporary Goods and Services Tax (GST) and Harmonized Sales Tax (HST) holiday. This initiative, effective from December 14, 2024, to February 15, 2025, aims to provide financial relief and boost economic activity.
Here's what restaurant owners in British Columbia (BC) need to know to prepare for this tax holiday.
Businesses in BC should also remember that the Provincial Sales Tax (PST) remains in effect unless the provincial government announces similar exemptions. Keeping this in mind will help businesses avoid confusion among customers.
What Does the GST/HST Holiday Cover?
The GST/HST holiday applies to a range of items and services. For restaurants, the following are exempt from GST and HST during this period:- All food items.
- Non-alcoholic beverages.
- Alcoholic beverages, including beer, malt beverages, wine, cider, and sake with an ABV of up to 22.9%.
- Pre-packaged coolers with an ABV of up to 7%.
What About Delivery and Gift Cards?
When food is delivered directly by the restaurant, the delivery charge is GST/HST exempt. However, delivery services provided by third-party platforms are not included in the tax relief. Additionally, while gift cards can be used to pay for meals during the holiday, customers buying gift cards during this period will not receive the tax exemption on purchases made after February 15, 2025.Compliance Guidance for BC Businesses
The Canada Revenue Agency (CRA) encourages all businesses to comply with this temporary legislation. Businesses that make reasonable efforts to adjust their systems will not face penalties, even if mistakes occur. However, the CRA will focus compliance efforts on businesses that willfully refuse to comply. To ensure smooth compliance:- Adjust your point-of-sale systems to reflect the tax exemption.
- Inform your staff and customers about the temporary changes.
- Keep clear records of transactions during this period.

Qualifying Items and Exemptions
Items that qualify for GST/HST relief include:- Prepared meals and non-alcoholic beverages served at restaurants.
- Alcoholic beverages such as beer, malt beverages, wine, cider, and sake with an ABV of up to 22.9%.
- Pre-packaged coolers with an ABV of up to 7%.
- Catering services for events, excluding labor and rental costs.
- Food delivery directly handled by the restaurant (third-party delivery charges are excluded).
Avoiding GST/HST Errors
Errors in charging GST/HST during this period can frustrate customers and create additional work for your team. To help you avoid and manage such situations:- Update Your Systems: Ensure your POS system reflects the tax exemptions accurately.
- Train Your Team: Equip staff with the knowledge to handle GST/HST exemptions during the holiday period.
- Review Transactions: Regularly check receipts to catch and correct errors promptly.
How CJCPA Can Help Your Restaurant
Navigating the GST/HST holiday can be tricky, but CJCPA is here to help. With our experience of supporting over 1,000 small businesses across British Columbia, we can help navigate the change. Since we specialize in restaurant accounting services. we’ll help you update your billing systems and ensure compliance with CRA guidelines. Our expert advice ensures you don’t miss out on any tax relief, and if you’re looking to simplify your finances, we also offer outsourced restaurant accounting services.