With respect to the GST/HST, supplies fall under different categories with different sets of rules.Which of the following statements is incorrect with regard to exempt supplies?
A)Exempt supplies are not included in the determination of the mandatory reporting period.
B)GST/HST is not applicable.
C)Childcare services and music lessons are examples of exempt supplies.
D)Input tax credits may be claimed on expenditures made to provide the exempt supplies.

Question

Quizplus · Accepted Answer

Exempt supplies do not allow for the claiming of input tax credits on expenditures made to provide them. This is because GST/HST is not charged on these supplies, and as such, the tax cannot be recovered through input tax credits.

With Respect to the GST/HST, Supplies Fall Under Different Categories