29 March 1994 GST/HST Interpretation 11645-3[5] - Concerning Input Tax Credits (ITCs) for Tax Payable on Imported Goods

                                                                        Telephone: (613) 954-8585
Fax: (613) 990-1233

Dear Mr. XXXXX

This is in reply to your facsimile of March 15, 1993, concerning input tax credits (ITCs) for tax payable on imported goods. You were enquiring on whether the letter sent by my office dated March 6, 1991, still reflected the Department's position. More specificially, your concern was whether the owner of imported goods is entitled to ITCs if the owner is not shown as the importer of record on the customs invoice.

In our March 6, 1991 correspondence we indicated that the "actual importer" who takes title of the goods and uses them in the course of their commercial activities must also be the importer of record in order to be eligible to claim an ITC for the tax payable under Division III (tax on importation of goods). I would like to inform you that the Department has modified its position so as to better address the commercial reality of customs transactions. As a result, in certain cases where the registrant who imports the goods is not identified as the importer of record, the registrant may be entitled to claim the related ITCs.

Effective January 1, 1991, where a registrant imports goods for use in the course of their commercial activities and is not identified as the importer of record on the customs invoice, the registrant will be eligible to claim the related ITC provided that the person has obtained sufficient evidence demonstrating that the importer of record acted on behalf of the registrant for GST purposes. Such documentation could be evidenced by a contract, an agency agreement or a letter of authorization.

The evidence to substantiate the relationship between the parties and the connection with the goods on which tax was payable pursuant to Division III will be determined on a case-by-case basis.

As a result of an agreement between the Government of Canada and the Government of Quebec, the ministre du Revenu du Quebec (MRQ) began administering the GST in the province of Quebec on July 1, 1992. If you have any additional questions on this or any other matter, you should contact:

Serge Bouchard, Directeur, Direction générale de la législation, Taxes à la consommation, Ministère du revenu du Québec, 3800, rue de Marly, Sainte-Foy, Québec, G1X 4A5

Yours truly,

H.L. Jones
Director
General Tax Policy
Policy and Legislation
Goods and Services Tax

GTP: XXXXX

c.c.:      M. Matthews
S. Mailer
R. Labelle
XXXXX
Serge Bouchard, Directeur,
Direction générale de la législation,
Taxes à la consommation,
Ministère du revenu du Québec
XXXXX