why is the GST based on where i'm shipping to not my province's rate?

[ez2curgr8]

this seems odd coz if i went to the Canada Post office they would charge GST based on my province not where i"m shipping to...

[pierrelebel]

Yes, the rules are weird.

The tax (GST or HST) will be calculated on the rate applicable to the province of the recipient for some services and based on the province of the sender for other services.  Also, in some instances, the rate will depend whether you are an individual or a business!

Many years ago I spent some time with a senior manager at the tax department who confirmed that Canada Post tax calculations were correct.

For example a parcel from Edmonton to Toronto:

Priority and XpressPost will be charged 13% HST (based on recipient living in Ontario)

The same parcel going "Regular Parcel" will be charged 5% GST (based on sender living in Alberta)

I am not kidding.  Those are the rules.

[ez2curgr8]

Really but i didn't notice this happening before...i will go back and take a look from the year before...i just lodged a complaint to Paypal to speak to Pitney Bowes about this...thanks for the info 

cheers!

[pierrelebel]

I noticed from your listings that you are GST/HST registered (you charge and remit GST/HST).

As such, it is largely irrelevant to you whether Canada Post charges GST or HST since you get all of it back as ITCs.

[pierrelebel]

I should add that - as you know - when you sell a taxable item, you need to charge and remit GST or HST based on the total amount of the transaction, including shipping charge - regardless whether you were charged GST or HST at whatever rate by Canada Post

So yes, you will see some instances where you are charged one rate but must charge and remit a totally different rate.

Only in Canada, eh!.

The "rational" behind the tax policy is relatively simple. 

When you purchase postage stamps or ship a parcel by regular parcel service, Canada Post is deemed to have provided the service in the province of the original transaction.

When Canada Post handles a parcel through Priority or Xpressspost, it is deemed to have performed the taxable service in the province of the recipient (not the shipper)

That simple!

[ez2curgr8]

YES I realize that it's really irrelevant coz i claim back whatever I pay...just the principle..I mostly sell to US residents so not going to waste my breath on this

So i did go back & check some 2014 expedited shipments within Cda .. from BC to NS and only charged 5%...recently BC to ON charged 13%

thx

[ez2curgr8]

i don't charge & remit GST for US sales..i believe that's correct!

[pierrelebel]

" from BC to NS and only charged 5%.."

As stated earlier, it depends on the type of postal service selected.  Some service will be charged GST only (5% from BC) while others will be charged whatever rate (GST or HST) applied t the province of the recipient.

Take a minute or two, go to Canada Post website, and compare the amount of tax charged by Canada Post for the same parcel depending on the service selected.

[ez2curgr8]

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@pierrelebel wrote:

I noticed from your listings that you are GST/HST registered (you charge and remit GST/HST).

As such, it is largely irrelevant to you whether Canada Post charges GST or HST since you get all of it back as ITCs.

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sorry for the late post but this question came up again the other day when I noticed the breakdown off a receipt from using snap ship service.  it said HST not GST so again this question resurfaced.

i thought being a GST registrant I cannot claim GST or HST paid to another province as that shouldn't be happening; I claim back ITC's on any GST charged in BC to me ...so I called Cda Post the other day and they said they charge GST or HST according to the destination because whomever it's being shipped to must pay the GST or HST.  This means I can't claim it as an ITC though...

So I guess Cda Post will collect the GST or HST from me (but I still don't get why I am being charged another province's GST or HST) then remit that to the CRA?! I'm still confused : (

[ez2curgr8]

sorry i went back and re-read the thread...now i understand per your reply below so THANK U as I'm shipping Expedited so I guess that falls into the latter of the two listed below...

The "rational" behind the tax policy is relatively simple. 

When you purchase postage stamps or ship a parcel by regular parcel service, Canada Post is deemed to have provided the service in the province of the original transaction.

When Canada Post handles a parcel through Priority or Xpressspost, it is deemed to have performed the taxable service in the province of the recipient (not the shipper)

That simple!