Tax Court of Canada


Tax

Goods and Services Tax

Supply

RVs delivered or made outside Canada were not taxable supplies subject to GST/HST

American registrant entered into dealership sales and service agreements with Canadian dealers to allow dealers to sell recreational vehicles (RVs) and parts in Canada. Dealers could choose option of having registrant arrange to have common carrier transport RV to dealer. Registrant retained customs broker to assist in shipping parts, which would arrange for carrier to ship parts to broker’s facility in Canada. Minister of National Revenue assessed registrant for uncollected GST/HST on sales of recreational vehicles (RVs) and freight transportation service relating to parts and uncollected provincial component of HST with respect to parts shipped from US to Canadian dealers. Registrant appealed. Appeal allowed in part. Appeal was allowed with respect to supply of RVs but not in respect of supply of parts. Registrant was not required to collect and remit GST and HST on RVs because they were delivered or made available outside Canada, so they were not taxable supplies. Under Indiana laws, delivery occurred at seller’s place of business. RVs were delivered at business premises of registrant in US, so supplies were deemed to be made outside Canada pursuant to s. 142(2)(a) of Excise Tax Act. Registrant was required to collect and remit provincial component of HST on parts shipped from US to Canada because parts were delivered or made available in Canada, so they were taxable supplies. Under contractual arrangement, customs broker was acting on behalf of registrant and delivery did not occur at registrant’s business premises in US. In light of contractual arrangements, bill of lading, and conduct of registrant, Canadian dealers and broker, parts were delivered or made available in Canada. 

Jayco, Inc. v. The Queen (2018), 2018 CarswellNat 534, 2018 TCC 34, Johanne D’Auray J. (T.C.C. [General Procedure]).

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