I run a small side business installing off-grid solar products. I recently looked at my analytics and realized that I am taking a pretty big profit cut on materials because I can't charge PST (7%). What is the work around?

When I buy products for a customer I am charged GST (5%) and PST (7%), in turn when I install these products and invoice the customer but I am only able to charge GST (5%). This leaves me eating the PST (7%).

The simplest solution would be to raise my prices to incorporate the PST (7%) into the price. However this would place my product prices 7% above any online retailer; which will garner the classic "I can get it cheaper online".

I could charge PST GST on materials used, and only GST on labour, but is that allowed? Quoted from the BC website,

If you're a contractor, it doesn't matter whether your contract is to supply and affix, or install, an improvement to real property or affixed machinery. In either case, you do not charge your customer PST. You must pay PST on the goods you obtain to fulfil the contract as outlined in Bulletin PST 501, Real Property Contractors.

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Does anyone have ideas on how to make it happen?

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Here is the mathematical breakdown if it helps with understanding.

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Buy materials for $1,000 $50 GST (5%) $70 PST (7%). Total: $1,120

I sell and install the materials for the market rate of: $2,000 Labour $95/hr.

Sell materials for $2,000 $100 GST (5%). Total $2,100. After GST payment to CRA the profit is $930.

Retailers sell the materials for $2,000 $100 GST (5%) $140 PST (7%). Total $2,240. After GST & PST payment the profit is $1000.