Domestic Inbound Services
GST system
Under the GST system, a freight transportation service is zero-rated when supplied in respect of goods that are transported from a place in Canada to another place in Canada, provided the service is supplied as a consequence of the shipper's instructions and is part of a continuous freight movement from an origin outside Canada to a destination in Canada. However, the carrier that supplies this freight transportation service in Canada must hold documentary evidence that the service is part of a continuous freight movement from a place outside Canada to a destination in Canada in order for the service to be zero-rated.
QST system
Under the QST system, a freight transportation service is zero-rated when supplied in respect of property that is transported from a place in Canada to a place in Québec, provided the service is supplied as a consequence of the shipper's instructions (documentary evidence to that effect is required) and is part of a continuous freight movement from an origin outside Canada to a destination in Québec.
A freight transportation service between a place in Québec and another place in Québec is deemed to be supplied outside Québec if the service is part of a continuous freight movement from an origin in Canada (outside Québec) to a destination in Québec. A person resident in Québec that acquires such a service must collect and remit QST, unless the service is acquired for use exclusively in the person's commercial activities.
Summary: How the GST/HST and the QST apply
| Origin | Destination | GST or HST | QST |
|---|---|---|---|
| Québec | Québec | Taxable (GST) | Taxable |
| Canada (outside Québec) | Québec | Taxable (GST) | Not applicable1 |
| Outside Canada | Québec | Zero-rated | Zero-rated |
| Québec | Canada (outside Québec in a participating province) | Taxable (HST) | Not applicable |
| Québec | Canada (outside Québec in a non-participating province) | Taxable (GST) | Not applicable |
| Canada (outside Québec) | Canada (outside Québec in a participating province) | Taxable (HST) | Not applicable |
| Canada (outside Québec) | Canada (outside Québec in a non-participating province) | Taxable (GST) | Not applicable |
| Outside Canada | Canada (outside Québec) | Zero-rated | Not applicable |
| Québec | Outside Canada | Zero-rated (if ≥ $5) | Not applicable |
| Canada (outside Québec) | Outside Canada | Zero-rated (if ≥ $5) | Not applicable |
| Outside Canada | Outside Canada | Zero-rated | Not applicable |
- The service is deemed to be supplied outside Québec. However, where the service is not acquired for consumption, use or sale exclusively in the person's commercial activities, the person acquiring the service (if resident in Québec) must collect and remit QST.
The transportation of freight from a place in Canada (Québec, for QST purposes) to another place in Canada (Québec, for QST purposes) may be zero-rated if the service is part of a continuous freight movement.