Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
[Addressee]
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
Case Number: 121733
April 27, 2011
Dear [Client]:
Subject:
GST/HST INTERPRETATION
Application of the GST/HST to importation of commercial and casual goods
Thank you for your facsimile of February 5, 2010, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to importation of goods. We apologize for the delay in replying.
HST applies at the rate of 15% in Nova Scotia, 13% in Ontario, New Brunswick, and Newfoundland and Labrador, and 12% in British Columbia. GST applies at the rate of 5% in the remaining provinces and territories.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
We understand that [...], as a broker, clears personal goods as well as commercial goods on behalf of clients.
As an example, if a personal shipment for a client that lives and resides in Alberta where they pay no tax but this shipment clears at the port of Ontario, would it be subject to the 5% federal part and the 8% provincial part of the HST in Ontario using the dummy tariff 0000.99.99.08.
You mentioned that Customs D memorandum D-17-1-22 states that casual goods entering Ontario by courier and destined for consumption in Quebec will not be assessed the Quebec Sales tax.
Interpretation Requested
You would like to know how GST/HST applies to imported commercial and casual goods.
Interpretation Given
Section 212 provides that every person who is liable under the Customs Act to pay duty on imported goods, or who would be so liable if the goods were subject to duty, is required to pay tax on the goods calculated at the GST rate of 5% on the value of the goods. Subsection 212.1(2) provides that every person who is resident in a participating province and is liable under the Customs Act to pay duty on imported goods, or who would be so liable if the goods were subject to duty, shall pay to Her Majesty in right of Canada, in addition to the tax imposed by section 212, a tax on the goods calculated at the tax rate for that province on the value of the goods. Subsection 212.1(3) provides that tax under subsection 212.1(2) does not apply to goods that are accounted for as commercial goods under section 32 of the Customs Act, specified motor vehicles or a mobile home or a floating home that has been used or occupied in Canada by any individual. Subsection 212.1(1) defines "commercial goods" to mean goods that are imported for sale or for any commercial, industrial, occupational, institutional or other like use.
Generally, based on the above, the importation of taxable commercial goods is not subject to the provincial part of the HST. Also, the importation of taxable casual goods, is generally only subject to the provincial part of the HST for a participating province if the goods are imported by a resident of that province regardless of where in Canada those goods are imported. Therefore, in the example that you have provided, taxable casual goods imported by a resident of Alberta would only be subject to GST at a rate of 5%.
We note that CBSA D Memorandum D17-1-22 to which you referred in your letter has been updated to reflect the application of HST to imported goods.
The foregoing comments represent our general views with respect to the subject matter of your request. These comments are not rulings and, in accordance with the guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, do not bind the Canada Revenue Agency with respect to a particular situation. Future changes to the ETA, regulations, or our interpretative policy could affect this interpretation.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-952-8530. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Yours truly,
Carolle Mercier
Unité des questions frontalières / Border Issues Unit;
Division des opérations générales et des questions frontalières / General Operations & Border Issues Division;
Direction de l'accise et des décisions de la TPS/TVH / Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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