Canada Post Charging GST on items going to USA - Warning

[weedsellit4u]

Warning For all Electronic Shipping Tools Users.

Canada Post is now charging GST on Items with shipping less than $5.00 going to the USA!

I noticed that there was a price increase when I clicked the calculate button. I send a lot of packages via small packets and the price was always $4.65. Now according to Revenue Canada this is a no-no as far as I know. So I called the help desk and when they found that this was happening on their machines as well. They started to scramble and did not know what to do.

I finaly got a call from a guy named Steve who told me that they were just the programmers and that the Management of Canada Post had actually signed off on the work order to make these changes. He said for now just call credit managemnt and my sales rep to make sure this was corrected in my account! Like I have the time for this.

While I am typing this I am on hold with Canada Post becuase they have lost a package. I was on hold for 1-1/2 hours yesterday and did not get through at all so I am trying again now! This package is a long story but I had called them on it on July 11th as we shipped on May 26th. They said there was a note attached to this shippment going to USA via Commercial Expidited USA. The note said that the company they were using to deliver could not affect delivery. They told me that the package would be delivered, its now the 25th and it has not been delivered!

They will not answer their phone, They won't deliver the packages and now they are collecting GST on items going to USA which is illegal at least according to Revenue Canada.

This is unacceptable!

There that feels better!

[armbo_comics]

try this number 1-800-260-7678 ext 9574...this person apparantly is equipped to answer the claims of taxable deliveries...good luck

[weedsellit4u]

Hi,
I just got off the phone to the GST rulings hotline (1-800-959-8287) and have to make a correction to my above statements.

If the shipping cost to the USA or anywhere else is $5.00 or less then GST should be charged. If the shipping cost to outside Candada is $5.01 or more than there is no GST charged on the shippment. (I wonder what the reasoning is behind that?)

It really does not matter to me one way or the other as I claim it as an ITC anyway, but what does concern me is that it took Canada post until now to comply with the tax law! It is definitely a reflection on how the Crown Corp. is being run.

[fenian]

This has been in place since GST was introduced back in 1991. See Canada Post Bulletin Volume 69 # 22 - Section 5.9 - issued January 1/91. The key part reads "International shipments where a) the transaction is completed at the counter and b) the total value of postal service charges is $5 or more...are not charged GST". The same ruling applies to electronic shipments, the rules for which had not yet been established. The key to not paying GST on shipments to the US or anywhere else outside Canada is for the entire transaction to total over $5.00 - no matter how many individual items you need to make up the $5. If you have 3 packets each @ $1.78 being mailed at the same time, then you're over the $5. If the payment is made in one transaction, you're clear. If you send the same 3 packets individually (e.g. at different times of the day and pay for each separately), then you will pay GST. To avoid the whole hassle, buy discount postage, put the stamps on yourself, and just mail the prestamped packet in the nearest mailbox. Check the local auction houses.....they often have stamp accumulations from estates where there's a ton of older mint stamps. I rarely pay more than half the face value, with the minor downside of putting a few stamps of different denominations on each packet to make up the required rate. Watch the commercial postal outlets - the vast horde of poorly trained staff will try to charge GST on everything - even when the international total is over $5. I recall one Christmas where I stood in line at a drugstore postal outlet and watched the clerk soak GST out of some 20 or so pensioners, all of whom were mailing heavy overseas packages. When I got to the counter, I advised I did not have to pay GST as all my items were international and the total was well over $5. The clerk was abusive and said "Pay it or get out of line". So, being an obliging sort of chap, I "got out of line", got to a phone and called a local senior postal supervisor to explain the problem. I then watched the rude clerk get called to the phone and presumably get his gluteous maximi charbroiled. I had no further problem when I got to the head of the line the second time around. Hope this helps....... Michael

[tobyshitzu]

I went through that with an outlet too. Didn't even notice I got charged GST until I got home, so fired off an email to CP. Was shocked when the local supervisor called to discuss it, promised he would deal with the outelet and it wouldn't happen again. Months later it was still going on, clerk had never heard about "No gst". He calls someone else for assistance, who proceeds to sarcastically insult me "of course there is gst" laughing etc. I make them call CP on the spot with a huge line forming behind me and they get told correctly. The 2nd guy then has more to say "Go buy yourself a new car with the savings" etc.

So I ask for the store manager who completely brushed me off "he just has a weird sense of humour". Go home and call Shoppers drugmart head office and CP. Shoppers calls me back the next day, says they talked to the supervisor there and that yes they should be charging GST on everything!!! Called the local CRA investigations office. CP said again they'd deal with it. I never set foot in the store again to see. With the supervisor there positive GST was to be charged how much was stolen from consumers over the years? It would have been done wrong by all staff every time.

[lina-mallows]

ALL packages sent to the United States ARE NOT exempt from GST.

The information is clearly spelled out at the Canada Post website:

http://www.canadapost.ca/business/tools/pg/manual/b05-e.asp#39032

"Tax rules relating to items mailed to foreign destinations and Canadian Forces Post Offices are as follows:
not subject to sales taxes if the total price per transaction is $5.00 or more;
if less than $5.00, subject to GST and QST if mailed from QuÈbec, HST if mailed from New Brunswick, Nova Scotia or Newfoundland and Labrador, and GST only if from mailed the other Provinces and Territories."

THESE ARE THE SAME RULES SINCE GST CAME INTO EFFECT.

AFTER 15 YEARS, YOU'D EXPECT CANADA POST EMPLOYEES TO GET THEM RIGHT.

Since 1991 there has always been GST on shipments to the US (and outside Canada) where the postage applied is valued UNDER $5.oo.

So, if you are sending a SINGLE item, and the postage is less than $5- there is GST (+ QST if sending from Québec), or HST if applicable, ADDED to the value of the postage.

The GST/HST exemption for posting packages OVER $5 is in order to allow fair competition with courier companies, or so they claim!

As most shipping tools treat each package as a SINGLE transaction, you would be charged tax according to the value of that SINGLE transaction. This is similar to the rules when making a purchase in a "vending machine". Each transaction is treated as if it were an individual purchase, in and of itself, considering nothing else. While not appearing fair, it appears to be the correct application of the GST rules, and regulations.

In Ontario these "vending machine" tax applications leads to some pretty strange situations. A $1 can of Coke, when purchased as part of a meal combo, under $4, is exempt from provincial tax= though GST is applied. However, if that same $1 can of Coke is purchased from a vending machine, it is taxed with both PST and GST- even if you immediately purchase a $2 muffin from another vending machine. The muffin is only taxed with the GST, and no PST, as it is exempt, being in itself under $4.
(I have published an eBay Guide, regarding the application of GST on Mail in Rebates. I think I should be writing one about postage. Thanks for the idea. There should be a link if you click on our feedback page- and then click "REVIEWS AND GUIDES". Please vote of it's helpful.)

HOWEVER- when a number of items are taken to a Post Office the CUMULATIVE value of the postage, if over $5, makes each of the individual items exempt from GST or HST! (see Canada Post's rule regarding this above. Maybe printing a copy will help explain this to a postal clerk. GOOD LUCK!!!)

Conversely- there is also a rule when buying items in bulk, even if the individual item is not taxed, as it is below a certain threshold. It's commonly called the "M & M" rule. You buy the WHOLE box- AND PAY ALL THE TAXES, even if you only eat them 'one at a time'. I mention this having been in a university environment, where photocopy cards were sold for $5 or $10; though when used, a single photocopy was just 5¢. If you fed 5¢ pieces into the machine- you paid NO TAX. If you bought the card, you paid tax on top of the full amount of the $5/$10 card. (this is based on a Revenue Canada ruling in the early 90's)

[lina-mallows]

Hi again,

Though still a work in progress- I posted the above information, as well as some other information regarding "additional postage" purchased.
It is now in an eBay Guide:

MAILING to the UNITED STATES- Is there GST Yes or No ?

As it's just after 5am, in Toronto, there are likely the odd typo that has crept in. I'll revisit it tomorrow night, and attempt the corrections.

[wsboyd]

Sorry, but how do I find this Guide ?

?:| <>

[teodoro1872]

This is the reason why I use FEDEX GROUND... TIME IS MONEY and Canada Post although reliable and cheaper on some items has the most appalling CSR service.

[lina-mallows]

wsboyd-

If you click on our "1476" next to the STAR, that should take you to our feedback page.
On the right side there will be a box, where you should find "View my Reviews & Guides" at the bottom of the list.
Please click on this link, and it should take you to our guides. The top three will be displayed, with a note to click for further guides, found at the bottom of that list.

Hopefully this works.
It would be nice if eBay also would show our top 100 reviewer banner here. By clicking that banner, it is a direct link to our guides.

I would put the link here, but I am uncertain if eBay permits this.

[ecanadaplus]

I would like to add G.S.T to all my sell .

[wsboyd]

Just Register as a Business, get a GST #, show the GST # on your Info, claim all eBay Income & Expences on your (T1) Personal Income Tax form T-2124 wach year.

Otherwise charging GST is Unlawful.
(Fedral Offence?)

WSBoyd

[wsboyd]

Sorry, that should be 'each year'

claim all eBay Income & Expences on your (T1) Personal Income Tax form T-2124 wach year.

[duujogl]

fenian wrote: "To avoid the whole hassle, buy discount postage, put the stamps on yourself, and just mail the prestamped packet in the nearest mailbox. Check the local auction houses.....they often have stamp accumulations from estates where there's a ton of older mint stamps. I rarely pay more than half the face value, with the minor downside of putting a few stamps of different denominations on each packet to make up the required rate."
Why does everyone ignore this super advice? I've said the same thing numerous times (under a different id) and I can't believe the people who think that a 40% or 50% discount on postage is "too much hassle"!!! Sheesh .... what's a tongue for??

[lina-mallows]

Is this still happening at your local Post Office, or when using an online shipping tool?
Is GST still being incorrectly applied to OUT OF CANADA shipment, when the collective value exceeds C$5.oo?

[dipmicro]

Otherwise charging GST is Unlawful.

So if they charge GST above $5 or if Wendy's charges GST even below $4 (I asked the kid at the counter why they alway charge GST even below $4 and he had no clue) and he had they are actually illegally collecting charges calling them GST but it's not a GST so they have no obligation to send those proceeds to Revenue Canada. Actually, Revenue Canada has no legal grounds to accept those proceeds.

It would be interesting for Revenue Canada to launch a nationwide investigation on how accurately GST has been collected and request ammendments at least 6 years back (that's how long we are required to maintain the books right?).

[pierrelebel]

"Wendy's charges GST even below $4 "

Of copurse they do. The law requires they remit GST on all their taxable sales. There is NO minimum as far as GST is concerned.

I suspect one is confused with 8% PST in Ontario which applies to "meal" exceeding $3.99 while meals under $4.00 are exempted (PST only). GST still applies. .

[lina-mallows]

dipmicro- Just as an aside- I am under the understanding that 6 years is REQUIRED. HOWEVER- permission MUST be sought before records may be destroyed. (Our Father is away so I can't check for certain) Most professionals simply opt to archive their earlier records with independent external record keeping companies. You put everything into a BIG banker's box- label it- and the company will even pick it up. Retrieval, if necessary, is nothing more than a phone call- and they deliver.

IKEA- here in TORONTO was using TAX INCLUDED PRICING at their Café.
Now things have changed to NOT TAX INCLUDED pricing.

So THEN-
1st case) if you bought ONE HOT DOG- you paid 50 cents.
2nd case) If you purchased TWO HOT DOGS- you paid $1.oo.
3rd case) If you bought EIGHT HOT DOGS- you paid $4.oo.
4th case) If you bought TWO HOT DOGS, and SIX CINNAMON BUNS-
You PAID $5.99.
5th case) You buy ONE SINGLE CINNAMON BUN for a $1.oo

(CINNAMON BUNS were $1.oo each- OR SIX for $4.99.)

Now using the IKEA model- here's the problem.
In ONTARIO prepared meals UNDER $4.oo, are not subject to PROVINCIAL TAX of 8%.
GST- DOES NOT apply to SWEETENED BAKED GOODS (CINNAMON BUNS )- when purchased in quantities over SIX.

So WHAT IKEA WAS DOING WRONG:
First NOT ALL ITEMS WERE OEVR $4.oo to permit PST of 8% to be included.
In the examples:

GST & PST INCLUDED PRICING IS OK- IF EVERY item on the menu is OVER $4.oo. But such is rearely the CASEdipmicro- Just as an aside- I am under the understanding that 6 years is REQUIRED. HOWEVER- permission must be sought before records ma be destroyed. Most professionals simply opt to archive their earlier records with independent external record keeping companies. You put everything into a banker' box- label it- and they even pick it up. Retrieval, if necessary, is nothing more than a phone call- and they deliver.

IKEA- here in TORONTO was using TAX INCLUDED PRICING at their Café.
Now- if purchasing a GROUP of items- ALL totaling over $4.oo- NOT INCLUDING LARGE QUANTITIES OF BAKED GOODS.

So-
1st case) if you bought ONE HOT DOG- you paid 50 cents.
2nd case) If you purchased TWO HOT DOGS- you paid $1.oo.
3rd case) If you bought EIGHT HOT DOGS- you paid $4.oo.
4th case) If you bought TWO HOT DOGS, and SIX CINNAMON BUNS-
You PAID $5.99.
5th case) You buy ONE SINGLE CINNAMON BUN for a $1.oo

(CINNAMON BUNS were $1.oo each- OR SIX for $4.99.)

Now using the IKEA model- here's the problem.
In ONTARIO prepared meals UNDER $4.oo, are not subject to PROVINCIAL TAX of 8%.
GST- DOES NOT apply to SWEETENED BAKED GOODS (CINNAMON BUNS )- when purchased in quantities over SIX.

So WHAT IKEA WAS DOING WRONG at first by including the tax in ALL their prices:
NOT ALL ITEMS WERE OEVR $4.oo to permit PST of 8% to be included.
In the examples:
1st case) if you bought ONE HOT DOG- you paid 50 cents. ONLY GST applied. PST WAS BEING INCORRECTLY COLLECTED.
2nd case) If you purchased TWO HOT DOGS- you paid $1.oo. ONLY GST applied. PST WAS BEING INCORRECTLY COLLECTED.
3rd case) If you bought EIGHT HOT DOGS- you paid $4.oo. PST WAS BEING INCORRECTLY COLLECTED. As the NET price INCLUDED the GST.
4th case) If you bought TWO HOT DOGS, and SIX CINNAMON BUNS- You PAID $5.99. PST WAS BEING INCORRECTLY COLLECTED on the HOT DOGS.
AND- the BAKERY GOODS are TOTALLY EXEMPT of PST and GST regardless of where purchased.
5th case) You buy ONE SINGLE CINNAMON BUN for a $1.oo THIS ITEM was BOTH GST and PST applicable.

THEN- IKEA REMOVED ALL the taxes from their pricing.
THE PRICES DID NOT CHANGE- they just became TAX EXTRA
So NOW this is the situation-
1st case) if you bought ONE HOT DOG- you paid 50 cents. PLUS GST ONLY.
2nd case) If you purchased TWO HOT DOGS- you paid $1.oo. PLUS GST ONLY.
3rd case) If you bought EIGHT HOT DOGS- you paid $4.oo. PLUS GST ONLY & PST.
4th case) If you bought TWO HOT DOGS, and SIX CINNAMON BUNS- You PAID $5.99. YOU PAY PST & GST ON EVERYTHING- Which is not correct-
as only the TWO HOT DOGS should have PST applied to that price.
(The BAKERY GOODS are TOTALLY EXEMPT of PST and GST regardless of where purchased. And what they are purchased with)
5th case) You buy ONE SINGLE CINNAMON BUN for a $1.oo ONLY GST is collected- and the PST is incorrectly NOT collected.

IKEA is a very large company- and even they can't get the applicable taxes progammed into their registers.
McDonald's has similar problems during promotions when NON-FOOF items are being sold in their stores.
For TAX purposes- they are treated as FOOD- and tax is most often incorrectly applied to the FOOD portion of the purchase if it was under $4.oo.

Tax application on Manufacturer, and store COUPONS is the BIGGEST issue I have.
REMEMBER- if the STORE hat issues the COUPON redeems THAT coupon (not reimbursed by a third party being clearly stated on the coupon);
then the price is considered to be the LOWER PRICE for tax application- and the THE PRE DISCOUNT PRICE- HERE THAT COSTCO!
SHOPPER'S DRUG MART- which even goes so far as to say on some of their coupons (DO NOT FORWARD FOR REDEMPTION)
still insists on charging ALL taxes on the GROSS pre-discount price.

So- in my mind the only way to solve this mess- BAN COUPONS.
AND- make ALL pricing TAX INCLUSIVE.
WHAT YOU SEE IS WHAT YOU PAY.
If it works for GAS STATIONS, and LIQUOR Stores here in ONTARIO- why can't the model be scaled to encompass everything?

NOTE- RESTAURANT GST & PST INCLUSIVE PRICING IS OK- IF EVERY item on the menu is OVER $4.oo. But such is rarely the CASE.

[dipmicro]

Pierre, perhaps it was PST, I don't remember. I only remember when I was asking them few years back, I was confident they were doing it wrong because I just had read it somewhere.

Anyway.

It does not make sense. Why tax laws are so specific? This item is taxable, but bought at volume 6 or more is not taxable. Ridiculous.

Let the government make everything evenly taxable and 3/4 accountants will be out looking for more useful jobs. The savings with easier bookkeeping will more than leverage the increased taxes on prepared foods.

Just my 2c.

[pierrelebel]

"Let the government make everything evenly taxable "

First, we need to consider we have two different levels of government taxing our consumption (federal and provincial).

In 1987 and 1988 I participated in a panel organized by the Canadian Tax Foundation. The purpose was to plan the introduction of a Goods and Service Tax or Value Added Tax (similar to what they used in Europe) to replace the FST (or Manufacturer's Sales Tax) which unfairly penalized manufacturers while helping importers.

To make a long story short, it was recommended, and it made a lot of sense, to introduce a GST or VAT at the rate of 2% on all goods and services (no exception). That included baby's formula, basic groceries, prescription, rent, etc... and have the tax included (hidden) in the price as they had in Europe. The bookkeeping would be done by retailers, wholesalers, manufacturers (just as we have now). It was so simple. It would have raised the same amount of tax the FST was raising.

However, the Conservative government did not have the balls to tax everything and gave up to just about every interest group who made representations. So we ended up with a much higher tax (was 7% at the time now reduced to 5%) than would have been necessary if no exemptions had been made.

Instead, we have a great system where you pay GST if you order 5 donuts at Tim Horton but do not if you buy a dozen because the same donuts are deemed "groceries" and GST exempt! A system where if you live in Ontario and ship a parcel to Nova Scotia (for example), you pay 5% GST on the postage if you ship regular parcel but pay 13% HST if your ship by XpressPost!

Logical? Blame Mulroney and Wilson, two ball-less politicians. .