This is taken from a transcript on the CRA website,
http://www.cra-arc.gc.ca/nwsrm/vdcsts/2011/v110414-2-eng.html
The general rule for inter-provincial transactions is that in order to determine the relevant rate of GST or HST to charge on a particular supply, you must first determine the province in which the supply is made.
The rules that are used to determine the province in which the supply is made are referred to as the "Place of Supply" rules.
These rules are found in regulations to the legislation and are described in detail in Technical Interpretation Bulletin B-103, titled Harmonized Sales Tax - Place of supply rules for determining whether a supply is made in a province.
This bulletin can be found on the CRA Web-site by searching for B-103.
We will provide a brief overview of the place of supply rules as they pertain to supplies of goods, services and intangible personal property.
Generally, the supply of a good by way of sale is deemed to have been made in a particular province, if legal delivery of the good to the purchaser occurs in that province.
However, for the purposes of this rule, the good is considered to be delivered in a particular province, and not in any other province if: The supplier either ships the good to a destination in the particular province that is specified in the contract for carriage of the property, or transfers possession to a common carrier that the supplier has retained on behalf of the purchaser, to ship the good to a destination in the particular province; or the supplier sends the good by mail or courier, address in the particular province.
Here are some examples clarify: A supplier in Ontario sells goods to a purchaser in British Columbia.
Based on the terms of the agreement, legal delivery of the goods will occur in British Columbia, and because legal delivery of the goods will occur in British Columbia, the supply of the goods is therefore considered to be made in British Columbia, and is subject to HST at a rate of 12%.
In another example, a supplier in Alberta sells goods to a purchaser in New Brunswick.
Based on the terms of the agreement, legal delivery of the goods will occur in Alberta, however, the supplier agrees to have the goods shipped to the purchaser in New Brunswick.
Although legal delivery of the goods will occur in Alberta, delivery of the goods is deemed to occur in New Brunswick, because the supplier will ship the goods to New Brunswick.
Therefore the supply of the goods is considered to be made in New Brunswick, and is subject to HST at a rate of 13%.
Ann
