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Pretend that your Canadian customer has obtained book of from your Canadian web portal. Your drop ship supplier is in the Country of america and is registered for G.S.T. You fax your order to the American company, and they, in turn, ship in an effort to for you (complete with Customs Declaration and their G.S.T.

In Canada, exports are “zero-rated” sales for S.S.T. purposes. This means that step ship an item to someone outside Canada, you don’t charge S.S.T. Yet, you get to claim (or deduct from the G.S.T. collected by you) all the “input tax credits” (G.S.T. that you paid for business purposes) to make that move. The idea, I suppose, in order to use encourage conveying.

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