Sometimes a number of carriers are involved in the supply of a freight transportation service that is part of a continuous freight movement from the premises of the shipper to those of the consignee. This process is called interlining.

Types of settlements

The nature of contractual relationships between carriers may vary. In some cases, an interline carrier works under subcontract to another carrier. In other cases, interline carriers have an implied contract with the shipper or consignee.

The resulting interline freight settlements, whether in respect of domestic or international transportation, are considered to be payments for the freight transportation services supplied between carriers and are therefore zero-rated. Only the carrier that bills the freight transportation service to the shipper or consignee is required to charge and collect GST and QST.