14 July 1998 GST/HST Interpretation HQR0001185 - Non-Resident Importers and the HST

                                                                        GST/HST Rulings and Interpretations
  Directorate
Place Vanier, Tower C, 10th Floor
25 McArthur Avenue
Vanier, Ontario
XXXXX                                                                                 K1A 0L5

Dear Sirs:

I refer to your facsimile message of May 12, 1998, addressed to Ms. Cheryl Leyton, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to tangible commercial goods imported by non-residents into participating provinces. All references are to the Excise Tax Act, unless where otherwise noted.

You have provided the following information in your facsimile message:

1. A non-resident of Canada is registered for GST/HST;

2. The non-resident imports commercial goods from outside Canada into a participating province;

3. The non-resident arranges for their delivery to the customers' premises;

4. The non-resident is liable for the customs duty and GST collected by Revenue Canada, Customs; and

5. Both title and possession to these commercial goods transfers at the customers' premises in a participating HST province.

Interpretation Requested

1. Whether the non-resident is required to collect HST (15%) or GST (7%) on the sale of commercial goods to customers in the participating provinces; and

2. Whether the non-resident is required to self-assess the 8% provincial component of the HST on commercial goods imported and brought into a participating province from a place outside Canada.

Interpretation Given

Based on the information provided in the foregoing scenario, we provide the following interpretation:

1. As the supplies are by way of sale of tangible personal property which are delivered in Canada by the non-resident to its customers, these supplies are deemed to be made in Canada (paragraph 142(1)(a)). A supply by way of sale of tangible personal property is made in a particular province if the supplier delivers the property or makes it available in that province to the recipient of the supply (section 144.1 and subsection 1 of Part II of Schedule IX). The registered non-resident is required to collect the HST at 15% on supplies of tangible personal property, by way of sale, made in a participating province.

2. A registered non-resident is relieved of the requirement to self-assess the 8% provincial component of the HST on commercial goods where they are imported into Canada by the non-resident for consumption, use, or supply exclusively in the course of the non-resident's commercial activities. Commercial goods are defined for the purposes of section 212.1 to be goods that are imported for sale or for any commercial, industrial, occupational, institutional or other like use (subsection 212.1(1)).

The foregoing comments represent our general views with respect to the subject matter of your facsimile message. Proposed amendments to the Excise Tax Act, if enacted, could have an effect on the interpretation provided herein. These comments are not rulings and, in accordance with the guidelines set out in section 1.4 of Chapter 1 of the GST/HST Memoranda Series, do not bind the Department with respect to a particular situation.

For your convenience, enclosed is a copy of section 1.4 of Chapter 1 of the GST/HST Memoranda Series. Also included are copies of Technical Interpretation Bulletins B-079 and B-081.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 954-2560.

Yours truly,

Richard Aronoff
Rulings Officer
Border Issues Unit
General Operations & Border Issues Division
GST/HST Rulings and Interpretations Directorate

Encl.: