GST/HST Rulings and Interpretations
Directorate
Place Vanier, Tower C, 10th Floor
25 McArthur Avenue
Vanier, Ontario
XXXXX K1A 0L5
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Subject:
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GST/HST INTERPRETATION
Application of GST/HST to Supplies by Non-Residents
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Dear XXXXX
I refer to a facsimile message of March 13, 1998, from XXXXX and my subsequent telephone conversations with XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to commercial goods imported into participating provinces by registered non-residents (R-NR) and unregistered non-residents (NR-NR). XXXXX has asked me to direct this response to your attention.
Statement of Facts
Non-resident importers (NRI), who are XXXXX U.S. XXXXX companies act as the importer of record at Canada Customs and account for the goods and pay any duty and/or GST/HST on the goods crossing the border.
In some cases the NRI are registered and in some cases they are not registered for GST/HST purposes.
Interpretation Requested
What is the responsibility of the NRI in respect of collecting and remitting the GST/HST in the commercial stream, if the NRI are registered or if the NRI are not registered for purposes of the GST/HST?
Interpretation Given
Based on the information provided, we supply the following interpretations:
• Where the NRI are registered and make supplies of goods in Canada, and in a participating or non-participating province, if the NRI are the persons who clear the goods through Customs, the NRI would pay the GST at a rate of 7% at time of importation. Because they are registered, the NRI are then required to collect, from their customers, tax at the HST rate of 15% on supplies of tangible personal property, made in a participating province, by way of sale, or the GST at the rate of 7% on supplies made in non-participating provinces, unless the supplies are zero-rated or exempt. The NRI would include the GST/HST collectible on their supplies in their net tax calculation and remit their net tax accordingly.
• R-NR are not required to self-assess the 8% provincial component of the HST on commercial goods where the goods are imported into a participating province by the R-NR for consumption, use or supply exclusively in the course of the R-NR commercial activities. Commercial goods are defined in section 212.1 of the Excise Tax Act (the Act) to mean goods that are imported for sale or for any commercial, industrial, occupational, institutional or other like use.
• Where the NRI are not registered and make supplies of goods in Canada and in a participating or non-participating province and act as the importer of record to clear the goods through Customs, the NRI would pay the GST at a rate of 7% at time of importation. As a non-registrant, the NRI would not be required to collect tax as the supplies are deemed to be made outside Canada (subsection 143(1) of the Act) provided that the supplies are not made in the course of a business carried on in Canada by the NRI.
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 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 together with a copy of Technical Information Bulletin (TIB) B-078 PLACE OF SUPPLY RULES UNDER THE HST and TIB-079 SELF-ASSESSMENT OF THE HST ON SUPPLIES BROUGHT INTO A PARTICIPATING PROVINCE.
Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 4294.
Yours truly,
Roy McKain
Senior Rulings Officer
Border Issues Unit
General Operations and Border Issues Division
GST/HST Rulings and Interpretations Directorate
Encl.:
| Legislative References: |
Subsection 142(2) of the Act, Section 144.1 of the Act, Subsection 220.06(1),
Section 32 of the Customs Act,
Section 212 of the Act, Subsections 212.1(1), 212.1(2), and 212.1(3) of the Act, Subsection 143(1) of the Act, Subsection 221(1), Schedule IX to the Act |
| NCS Subject Code(s): |
11645-1(RMcK) |
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