HST charged once (HST calculated on on HST)

Tax Topics
1

I have a question about HST charged by my contractor (in Ontario). In the course of kitchen renovation he placed an order for countertop to be replaced for 1,000, paid 1,130 to the Home Depot, put 1,130 on the bill to me. There is a separate charge for labor of $500. He then applied HST to the total amount.

To make it easier:
Countertop (1,000+HST=1,130) 1,130
Labor 500
Total 1,630

HST @13% 211.9
Total with HST: 1,841.9

I think it should be
Countertop (without HST) 1,000
Labor 500
Total 1,500

HST @13% 195
Total with HST: 1,695

Or:
Labor 500
HST@13 %
Total with HST 565
Reimbursable Cost 1,130
Total: 1695.

Am I correct? And if so, is there something on Revenue Canada website I can show him to support my point?

Thank you. (He is HST registered).

2

The contractor can charge you what ever he wants. What he has done is in mark up the countertop 13%. Now you might want to ask him if that was in fact his intention.

3

Just ask him to explain.

4

Some contractors that I work with charge this extra 13% in this way for their time and hassle ordering the items from other retailers instead of sending their customers to do the ordering.

5

hii…
Yes, you’re right. He shouldn’t charge HST again on the $1,130 if it already includes tax from Home Depot. He should apply HST only on his labor and any pre-tax costs
thank you