The Canadian Trucking Alliance (CTA) has received information from a number of companies that have run into difficulty over the payment of GST on equipment (primarily trailers) temporarily imported from the U.S. for domestic use in Canada.
GST would not have to be paid if equipment is used exclusively in international service. The current rules state that GST must be paid on the full value of the equipment, and that procedures established by the Registrar of Imported Vehicles must be followed. Input Tax Credits are available for GST paid.
Discussions between CTA and Canada Customs and Revenue Agency (CCRA) indicated that all other modes of transportation have special provisions in place to reduce the amount of GST paid on temporary imports, which lessens the cash flow burden on carriers. For example, GST on temporarily imported buses is 1/60 of GST owing for each month the bus is used domestically. However, for this GST reduction to apply, the carrier must be able to demonstrate that suitable equipment is not available in Canada.
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