Transitional rules are required to determine which tax — the existing RST or the Ontario component of the HST — would apply to transactions that straddle the July 1, 2010 implementation date for the HST.

The transitional rules would operate on the basis of the following dates:

• July 1, 2010 — Implementation date for the HST.
  • May 1, 2010 — The HST would generally apply to consideration that becomes due, or is paid without having become due, on or after this date for property and
    services provided on or after July 1, 2010.
  • October 14, 2009 — The release date of this Notice. The HST would not apply to consideration that becomes due, or is paid without having become due, on or before October 14, 2009. Certain businesses
    and public service bodies may be required to self-assess the Ontario
    component of the HST
    on consideration that becomes due, or is paid without having become
    due, after October 14, 2009 and before May 2010 for property and
    services provided on or after July 1, 2010.
• October 31, 2010 — This is the date on which any outstanding RST would become payable under the transitional rules to facilitate the efficient wind-down of the RST.

Services

This section describes the general transitional rules for supplies of services, as well as specific transitional rules for funeral and cemetery services, passenger transportation services
and freight transportation services.

General Rules

The HST would generally apply to a supply of a service to the extent that the service is performed on or after July 1, 2010. The HST would generally not apply, however, to a supply of a service if all or substantially all (90 per cent or more) of the service is performed
before July 2010.

Consideration due or paid on or after July 1, 2010

The HST would generally apply to consideration that becomes due, or is paid without having become due, on or after July 1, 2010 for a supply of a
service, to the extent that the consideration is for the part of the
service that is performed on or after July 1, 2010.

Consideration due or paid on or after May 1, 2010 and before July 2010

The HST would generally apply to consideration that becomes due, or is paid without having become due, on or after May 1, 2010 and before July 2010
for a supply of a service to the extent that the consideration is for
the part of the service that is performed on or after July 1, 2010.

In such circumstances, the supplier would be required to account for the Ontario component of the HST in the GST/HST reporting period of the supplier that includes July 1, 2010. The recipient of the supply would be able to claim any available input tax
credits with respect to the Ontario component of the HST in the GST/HST reporting period of the recipient that includes July 1, 2010.

Consideration due or paid after October 14, 2009 and before May 2010

Persons who are not consumers — such as businesses and public service bodies — may be required to self-assess the Ontario component of the HST
on consideration that becomes due, or is paid without having become
due, after October 14, 2009 and before May 2010 for a supply of a
service, to the extent that the consideration is for the part of the
service that is performed on or after July 1, 2010.

The requirement to self-assess in these circumstances would generally apply only to:

• non-consumers acquiring the service for consumption, use or supply otherwise than exclusively in the course of their commercial activities (e.g., a
  business, such as a financial institution, that is acquiring the
  service to make GST/HST-exempt supplies);
• non-consumers acquiring the service for consumption, use or supply exclusively in the course of their commercial activities but in circumstances where the
  service would be subject to an input tax credit restriction or
  recapture (e.g., certain entertainment expenses subject to the 50 per
  cent input tax credit recapture rules in the ETA);
• non-consumers that use simplified procedures available under the ETA for calculating their net tax (e.g., certain charities, public service bodies and small businesses); and
• selected listed financial institutions, which use a special attribution method in determining their net tax.

A person who is required to self-assess in these circumstances would be required to account for the tax either: (i) in the GST/HST return of the person for the reporting period that includes July 1, 2010, if the due date for that return is before November 2010,
or (ii) in any other case, in prescribed form and before November 2010.