📦 GST/HST on Imports and Exports – What Businesses Need to Know

This guide explains how the Goods and Services Tax (GST) and Harmonized Sales Tax (HST) apply when your business imports or exports goods, services or intangible property. The rules differ depending on whether goods/services are brought into Canada, sold within Canada, or sent outside Canada.

🛃 GST/HST on Imported Goods and Services

When you bring goods into Canada, the GST or the federal part of the HST generally applies to the value of the goods (including customs duty). The importer of record is responsible for paying this tax at the border.

If you are registered for GST/HST, you may be able to claim Input Tax Credits (ITCs) to recover the GST/HST you paid on imported goods used in your commercial activities.

Some items are non-taxable imports — for example certain zero-rated goods like prescription drugs or goods valued at $20 or less in specific situations.

🌍 Exports and Zero-Rating

Goods and services that are normally taxable in Canada can be zero-rated (taxed at 0%) when exported. To qualify:

  • The purchaser exports the goods within a reasonable time after buying them.
  • The goods are not used in Canada before export.
  • The supplier keeps evidence that the export conditions have been met.

This means you generally do not charge GST/HST on exported goods and qualifying services.

🚢 Drop-Shipment Rules

Special drop-shipment rules can apply when a non-resident buyer contracts a Canadian supplier to deliver goods to a third party. Under certain conditions, tax may not apply to the sale or commercial services if drop-shipment certificates are used correctly.

These rules reduce tax burden and administrative cost in complex supply chains involving non-residents.

💼 Relief Programs

Qualified businesses that import goods for export or processing may get GST/HST relief under programs such as:

  • Export Distribution Centre Program — allows eligible exporters to import inventory and goods without paying GST/HST at the border.
  • Exporters of Processing Services Program — relief for GST/HST on goods imported for processing and then exported, reducing cash flow costs.

📌 Non-Residents & GST/HST Registration

Non-resident businesses that sell taxable supplies in Canada may need to register for GST/HST, collect the tax on taxable sales, file returns and may be eligible to claim ITCs for GST/HST paid on purchases and expenses.