7 February 2003 GST/HST Ruling 31787 - Application of the GST to the Removal and Storage of Empty Trailers

Dear XXXXX

Thank you for your letter XXXXX, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the removal and storage of empty trailers as described below. We apologize for the delay in responding to your request.

Statement of Facts

Our understanding of the facts is as follows:

1. XXXXX is registered for GST/HST purposes XXXXX and is in the business of providing freight transportation services in Canada and the U.S.

2. The XXXXX hires a XXXXX carrier, XXXXX who is not registered for GST/HST purposes, to pick up and deliver freight XXXXX XXXXX and to remove any empty trailers previously left to an off-site storage site when required.

3. A typical transportation flow is as follows:

•   XXXXX dispatches the Carrier to pick up the load from XXXXX U.S. XXXXX and deliver it to XXXXX;

•   The Carrier delivers the load and leaves it, including the trailer at XXXXX for the XXXXX personnel to unload;

•   After leaving the full load and trailer at XXXXX, the Carrier retrieves an empty trailer from XXXXX yard, if one is available, and returns to the U.S.;

•   If no empty trailer is available at XXXXX, the Carrier retrieves one from the off-site storage site or returns to the U.S. without a trailer;

•   The trailer is unloaded of its freight and placed in XXXXX yard;

•   XXXXX requests the Carrier to remove the empty trailer from XXXXX yard;

•   A marginal amount is included in the fee charged by the Carrier XXXXX XXXXX to address the removal and storage of empty trailers;

•   The Carrier considers the movement of the empty trailer to the off-site storage site to be part of the international movement that begins at the U.S. location, stops at XXXXX and continues to the off-site storage site;

•   The Carrier subcontracts the empty trailer movement to XXXXX; and

•   XXXXX retrieves the empty trailer and delivers it to its storage yard located in Canada.

1. The amount XXXXX pays the Carrier is the same whether or not the Carrier has the trailer moved to the off-site storage yard.

2. The Carrier only pays XXXXX for the trailers it moves and stores in its storage yard.

Ruling Requested

What is the GST status of the removal and storage of the empty trailers by XXXXX?

Ruling Given

Based on the facts set out above, we rule that the supply of the removal and storage of the empty trailers from XXXXX yard to the off-site storage yard to the Carrier is zero-rated pursuant to section 8 of Part VII of Schedule VI to the Excise Tax Act.

This ruling is subject to the general limitations and qualifications outlined in section 1.4 of Chapter 1 of the GST/HST Memoranda Series. We are bound by this ruling provided that none of the above issues is currently under audit, objection, or appeal; that there are no relevant changes in the future to the Excise Tax Act, or to our interpretative policy; and that you have fully described all necessary facts and transaction for which you requested a ruling.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-2826.

Yours truly,

Connie Lush
Services and Intangibles Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate