The service of a driver is usually not a freight transportation service. This is the case when, for example, a self-employed driver does not use his or her own truck and does not assume responsibility for the supply of the freight transportation service. The driver is then supplying a driving service.

Freight forwarders usually act as agents on behalf of their clients. They mainly assist shippers with the preparation and booking of a freight transportation service.

A freight forwarder is not a carrier providing a freight transportation service when the freight forwarder acts as an agent for a shipper and does not assume responsibility for the transportation of the goods.

However, a freight forwarder is providing a freight transportation service if the freight forwarder is a carrier and assumes responsibility for the transportation of goods.

A pilot car service is a service of providing a marker vehicle for a carrier when the carrier moves a load that exceeds legislated dimensions for travel on roads and highways. The pilot car service is part of the freight transportation service when the pilot car service is provided by the carrier.

If an independent contractor or someone other than the carrier provides the pilot car service, the service is not part of a freight transportation service.

A reload centre is used as a cross-dock operation when goods are transported to the facility by rail or by truck. The goods are unloaded and, if not immediately reloaded for further transport, are stored for a short period of time (usually 30 days or less). If the goods are not processed or altered in any way while they are in the facility, the services supplied at reload centres are freight transportation services.

Carriers may charge empty mile charges for the repositioning of a conveyance. This service is incidental to, or part of, a freight transportation service when the charge relates to a specific freight movement. Documents, such as a probill or trip number on the driver's pay stub, have to be kept to show that the charge is incidental to, or part of, a freight transportation service.

A service of transferring trailers from a client's yard to a loading dock (shunting) is a freight transportation service.

Stevedoring (the loading and unloading of ships) is a freight transportation service and persons providing these services are carriers.

The service of towing a vehicle from the site of an accident or breakdown is a freight transportation service. Roadside services (for example, car boosting, winching, and unlocking doors) are not freight transportation services since these services do not involve the transportation of goods. If the tow truck operator provides car boosting or other services before towing a vehicle, the car boosting or other services may be incidental to, or part of the freight transportation services.

Chargeback

Interlining may also involve transactions, other than freight transportation services, between the first carrier and the subsequent carrier (a chargeback). A chargeback for supplies used in the transportation of freight from one freight carrier to another freight carrier (such as a truck-owner operator), is not a supply of a freight transportation service. A chargeback is usually for property and services (such as fuel, truck repairs, maintenance, or permits) used to provide freight transportation services but are not freight transportation services themselves. A chargeback is usually subject to the GST/HST.

Courier services

The interlining rules also apply to courier services. For example, when a freight company contracts with a courier to pick up or deliver goods to the freight company, the courier bills the freight company for the service and, in turn, the freight company bills either the shipper or the consignee. The courier does not charge the GST/HST on its service because it is an interlining carrier and it is not the invoicing carrier.

When a courier company contracts with a person to deliver goods, the courier company issues an invoice to its customer and is responsible for charging and collecting the GST/HST. Persons who are under contract with the courier company to make deliveries and who do not invoice the customer directly can zero-rate their services to the courier company because they are interlining carriers.

As a courier providing only interline freight transportation services, you do not collect the GST/HST from the carrier for those services. In this case, even if you are a small supplier, you would benefit from registering for the GST/HST since you would be able to claim input tax credits for the GST/HST you pay or owe on expenses related to your interline services.

Gravel pit owners and dump truck operators

It is common for a contractor who has been hired to build a road to own a gravel pit and to supply the gravel needed to build the road from its pit. Given the volume of gravel required to build the road, the contractor will often subcontract with a dump truck operator to transport the gravel to the road construction site.

The interline provisions would not apply in the case described above. In these circumstances, the gravel pit owner (contractor) would be considered to be the shipper of the goods, not the carrier. For the interline provisions to apply, there must be at least two carriers. In this case, the dump truck operator is the only carrier. As such, the zero-rating provisions do not apply, and the GST/HST applies to the supply of the transportation service.

Tow truck operators

The service of towing a vehicle from the site of an accident or breakdown is a freight transportation service. Roadside services (for example, car boosting, winching, and unlocking doors) generally are not freight transportation services by themselves since these services do not involve the transportation of goods. However, if the tow truck operator provides car boosting or other services before towing a vehicle, the car boosting or other services may be incidental to, or part of, the freight transportation services.

The interlining rules also apply to the service of towing a vehicle from the site of an accident or breakdown. When self-employed contractors (operators) work for a GST/HST registered tow truck company, the services provided by the operators to the tow truck company are zero-rated and the tow truck company (as the invoicing carrier) is responsible for charging and collecting the GST/HST from the customers.

As a truck owner-operator or tow truck operator who provides only interline freight transportation services, you do not collect GST/HST from the carrier for those services. In this case, even if you are a small supplier, you would benefit from registering for the GST/HST since you would be able to claim input tax credits for GST/HST you pay or owe on expenses related to your interline services.

Amounts that a shipper pays a carrier for the detention of a ship, freight car, or other cargo conveyance during loading or unloading beyond the scheduled time of departure.

Carriers often provide their clients with some protection against losses or damages. They can self-insure their client's property by including a risk premium in their charge or by charging a separate amount to their client for risk protection. In these cases, they are self-insuring against claims for losses or damages. The charge to their client for this protection takes the same tax status as the freight charge for GST/HST purposes because it is incidental to, or part of, the freight transportation service.

If a carrier acts as an agent for an insurance company to arrange insurance coverage on the client's property, the carrier does not collect the GST/HST on premiums paid to the insurance company.

Fuel surcharge may be added to invoices for the supply of transportation services to recover some or all of the increased cost of fuel instead of adjusting the price for the transportation service.

Where the supply of a transportation service is taxable, the entire charge for that service, including the fuel surcharge, is subject to the GST/HST at the same rate. Where the supply of a transportation service is zero-rated, the entire charge for that supply of a transportation service, including the fuel surcharge, is zero-rated.

If freight is lost or damaged in transit, the carrier may be required under the terms of the agreement to replace the goods or otherwise compensate the customer. A damage claim settlement paid by a carrier to a claimant is generally not subject to the GST/HST.

Loss or damage claim settlements are different from a reduction in freight charges. A reduction in freight charges is an adjustment to the original invoice. For more information, see Guide RC4022, General Information for GST/HST Registrants.

A rail carrier pays the owners of railway cars a fee when shippers use cars that the rail carrier does not own. This fee is referred to as a mileage credit.

When a railway carrier passes this cost on to the shipper, the invoice to the shipper should reflect the GST/HST on both the gross rental charge and on the mileage credit.

The Canada Border Services Agency (CBSA) licenses sufferance warehouses for the inspection and clearance of imported goods by the CBSA before they are released.

Sufferance warehouse services (including the handling and storage services a sufferance warehouse operator provides for imported goods) are zero-rated when the purpose of the service is to enable the examination of these goods before release. The zero-rating does not apply to office rents and bay rental fees charged to tenants and fees for preparing entry documents (other than re-manifesting fees incidental to the handling and storage of goods).