GST/HST Memorandum 3-3-3, Place of Supply in a Province – Tangible Personal Property, August 2024

Where Manitoba purchaser itself retains the common carrier and PEI vendor merely contacts the carrier when ready, the place of supply is that of legal delivery in PEI

Example 3 – Delivery of a good by a common carrier retained by the purchaser

A manufacturer in Prince Edward Island sells a good to a wholesaler in Manitoba. Legal delivery of the good occurs in Prince Edward Island at the manufacturer’s premises. The wholesaler regularly purchases goods from the manufacturer and establishes freight terms with a common carrier for the regular transportation of goods from the manufacturer’s premises to Manitoba whenever required. The wholesaler instructs the manufacturer to contact the carrier directly to advise the carrier whenever goods are ready for pick-up. The carrier invoices the wholesaler for any transportation service that is provided pursuant to their arrangement.

The good is delivered to the purchaser in Prince Edward Island. In this case, the purchaser entered into an agreement with the carrier for the transport of the good. Since the supplier simply contacts the common carrier to inform them that the good is ready for pick up, the supplier is not considered to have retained the carrier on behalf of the recipient.

The supply of the good is therefore made in Prince Edward Island and is subject to the HST at a rate of 15%.

Where Manitoba supplier personally delivers good to consignee in Ontario, who sells the goods to Quebec purchaser and has it couriered there, there are 2 supplies: in Ontario, and Quebec

Example 9 – Delivery of goods sold on purchase/resale consignment basis

A consignment sale under a purchase and resale arrangement is treated as two separate supplies that occur at the time the consignee sells the good to the final purchaser.

A GST/HST registered supplier in Manitoba delivers a good using its own vehicle to an Ontario consignment company (consignee) for sale by the consignee. The consignee is GST/HST registered and under its agreement with the Manitoba supplier, when the good is sold to the final purchaser, two transactions will occur: a sale by the Manitoba company to the consignee and a sale by the consignee to the final purchaser. The consignee sells the good to a purchaser in Quebec and sends the good by courier to the purchaser in Quebec. Legal delivery of the good from the supplier to the consignee occurs in Ontario, as does the supply from the consignee to the purchaser.

Supply 1 – Sale by the Manitoba company to the consignee

The sale of the good from the Manitoba company to the consignee is made in Ontario and is subject to the HST at a rate of 13% because the Manitoba company delivered the good to the consignee in Ontario.

Supply 2 – Sale by the consignee to the final purchaser

The second supply is the sale of the good from the consignee to the final purchaser. Although legal delivery occurs in Ontario, deemed delivery occurs in Quebec because the consignee sent the good by courier to the purchaser in Quebec.

The supply is therefore made in Quebec, which is a non-participating province, and is subject to the GST at a rate of 5%.