GST/HST can be a minefield where carrier's, brokers, and customers are concerned. One which I am surprised the fed's haven't looked into a little further, because it would be a huge cash cow for them.If the shipment was entirely in Canada, a carrier would bill the broker without GST and the broker would then bill his customer at the applicable GST ...
I agree. HST should be charged on all freight movements and the freight payor can include that amount as an ITC credit on their return along with all other parties through the process. That way the complete 'service' part of the freight move will be captured by the government. If there is an international portion to this, the customs broker should be able to recapture the HST on the international freight portion at that time they do the customs entry.GST/HST can be a minefield where carrier's, brokers, and customers are concerned. One which I am surprised the fed's haven't looked into a little further, because it would be a huge cash cow for them.
Strictly speaking, a load broker is a service provider, not a carrier, and should bill their Canadian based customers GST for all the freight they move on behalf of that customer.
The relationship between brokers and carriers has always been that of "interlining" which is GST exempt. The definition of interlining is one carrier working for another carrier, and even at that, the originating carrier needs to supply a bill of lading in their name for the load to qualify as an interline load.
Technically speaking, and unless someone can provide evidence (rule) to the contrary, a load broker with a basement office and a telephone, without a CVOR or actual equipment, facilitating a move for Canada Bread (just an example) from Mississauga to Los Angeles, would need to bill Canada Bread for the GST on the load broker's profit portion, if the load broker used an escrow account. If the load broker did not use an escrow account, then the load broker would have to bill GST for the entire amount, as there would be no simple, clear cut, method of determining the load broker's profit portion.
Unless I am wrong in my understanding of the GST regulations, a Revenue Canada investigation on the issue, and subsequent enforcement, would pretty much gut the load broker community in this country. It would add an extra layer of administration on the customer's part to claim back that GST, and it would lay bare exactly how much load brokers upcharge the transportation service.
I'm always thinking of ways to better our industry. If I can get the industry running better then running my company would be much easier. Just imagine a day when I don't have to chase down money from some used to be carrier turned basement broker who double brokers the freight from large US brokerages with no intention of paying.Now if Michael and Jim could just get back to work running their companies and quit trying to find ways for CRA to complicate my business, it would brighten this gloomy, rainy day. Lol!!!
you can call it whatever you like it's the same thing Wesward, if you broker a load that you took from a carrier or broker it is double brokering, if you are not billing the beneficiary owner of goods to the movement you are double brokering..............................you can't make it not by telling yourself it it co-brokering, overflow, my driver ate the truck keys so I need you to run this load for meThey say it is over flow
But even over flow and cant handle on own trucks I would think is double brokering.