HST on loads

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arseeker

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Jul 17, 2008
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I have a question I was hoping to get an answer too. Our trucking software program told me that we need to charge HST accordingly with the last drop of a shipment. For example, if we are billing someone in Ontario, picking up in Ontario but delivering to BC, then we are to charge 15%. If it is reversed and the customer is in BC but we are delivering to Ontario, then we charge 13%. Does anyone know if this is correct. I thought it would be where the customer is located but I am being told NO, its where the last drop of the shipment is. Any answers are appreciated!!!
 
Your software is correct. The destination determines at what rate you charge HST. Of course the HST applies only to domestic shipments, international freight movements were not subject to GST, therefore they are not subject to HST.
 
do you collect just like HSt

how do you report it if you are collecting all different taxes. In Ontario, we file GST which now are HST returns but what if you are charging the Quebec tax since the last drop is in Quebec. How do you file that? Or any of the other provinces for that matter! Do you file all under your HST form???????????
 
arseeker said:
I have a question I was hoping to get an answer too. Our trucking software program told me that we need to charge HST accordingly with the last drop of a shipment. For example, if we are billing someone in Ontario, picking up in Ontario but delivering to BC, then we are to charge 15%. If it is reversed and the customer is in BC but we are delivering to Ontario, then we charge 13%. Does anyone know if this is correct. I thought it would be where the customer is located but I am being told NO, its where the last drop of the shipment is. Any answers are appreciated!!!
Click to expand...

Don't forget about the multi drop scenerio: Pickup in Ontario (TL), 1/2 load delivers into AB and the other 1/2 load delivers into BC.

AB portion billed at 5% and BC at 12%.

The problem is determining what 'portion' of the freight cost is attributable to AB and what portion to BC...

I'm sure I saw most of you at the NTBA HST seminar where it was discovered that the legislation is pretty vague in that it is really up to you and me to decide what portion of the total freight bill to attribute to AB and what portion to BC.

Good luck everyone!
 
Rd1020, we asked Revenue Canada that exact same question and the answer we received was to just lump it all together and don't try to seperate each different rate. They will do the required allocations at their end. So nice of them it make easier for us - HA!
 
I did not hear that we have to seperate for multiple drops. The software people told me to charge where the "last" drop of the trip is. There is no way for me to divide it on my invoices. I would have to do sep. invoices for each drop. This is news to me!!!
 
arseeker said:
I did not hear that we have to seperate for multiple drops. The software people told me to charge where the "last" drop of the trip is. There is no way for me to divide it on my invoices. I would have to do sep. invoices for each drop. This is news to me!!!
Click to expand...

Here's hoping that the software people and the audit people are on the same page. :)

I could ask accounting if there's been any revisions since the seminar (about 2 months ago).

Short version is if we are using 'last drop', and someone had a TL shipping from Vancouver to Ottawa, they should drop off one small empty box in Gatineau as a second (and last) drop...

Either way, I'm glad I'm not in accounting!
 
Hst

When it comes to the CRA, do not under any circumstances rely on anything your told. Even if it's by their rulings dept. The only thing you can absolutely rely on is anything that is written down on paper and is sent to you by them. If you don't know, ask the rulings dept. to send you the excerpt from the the relevant legislation and their rules governing the collection and remission of these taxes.

If you ever have to go to tax court, anything that the CRA employees have told you is hearsay only and does not replace the Excise Tax Act. Remember, the CRA and it's 54,000 employees are accountable to no one!
 
Agreed Activet, and excellent advice. Regarding the reporting of multiple drops, remember, the HST is a flow-through tax credit for brokers, carriers and whoever is ultimately paying the freight bill. If you use the "last drop" system and the last drop is in an HST province yet the majority of the load has been delivered to GST provinces along the way, whoever is paying the freight bill will get a larger flow-through tax credit (13% vs 5%). I believe this is the reason why Revenue Canada wants the freight charges proportioned according to where the individual shipments deliver. I appreciate and understand the frustration this can create when you have negotiated an "all-in" rate to your customer. Perhaps Revenue Canada will either better explain or perhaps streamline this unique quirk as it applies to transportation.
 
In case you are looking for the reading material for HST in general and in relation and transportation...

HST for Ontario and British Columbia
B-103 - Harmonized Sales Tax - Place of supply rules for determining whether a supply is made in a province
GI-053 - Ontario and British Columbia: Transition to the Harmonized Sales Tax - Freight Transportation Services
http://www.cra-arc.gc.ca/E/pub/gm/28-2/28-2-e.pdf
RC4080 - GST/HST Information for Freight Carriers

My meeting notes from the seminar are certainly more interesting than the legal jargon, but much less legible...

Again good luck to those of you in accounting...

Mike
 
Hi all,
Is anyone able to provide additional clarification on the following scenario.
We are a Quebec carrier, we pickup freight in Quebec, deliver it to Ontario....do we bill customer HST (13%) or just GST (5%). I thought we were supposed to bill HST as of July 1st, but am now hearing that in regards to transport, you only bill HST when freight is between two provinces with HST. Any help is appreciated,
Regards,
-Boss
 
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