Is GST refundable by the CBSA?

The short answer is: it depends!

First, a bit of background on GST as it applies to commercial vs. personal goods:

• Goods imported for commercial purposes (i.e. by a business) are taxed at the 5% rate for GST whether the importer is registered for GST/HST or not.

• Goods imported as personal use (items by an individual) are also taxed at 5% but may have provincial sales tax (PST) or harmonized sales tax (HST), which is 5% + the provincial rate. The PST/HST is assessed by CBSA at the time of import based on the address of the importer.

Now, the question of whether GST is refunded depends on a couple of factors, including whether or not the importer is registered to collect GST on behalf of the government.

Importers registered to collect GST

If a GST-registered importer corrects or adjusts the import declaration, resulting in a downward adjustment to the value, the CBSA will not refund the GST. 

Instead, the importer recovers the full value of the GST, when they file their periodic GST/HST return. 

So, you get back any extra tax paid, but not from the CBSA.

Importers not registered for GST

If an importer who isn’t registered for GST—usually a consumer, or unregistered non-resident importer—makes a claim for a refund as described above, the CBSA will refund the GST and/or HST. 

This is largely because the importer won’t be able to claim an Input Tax Credit on a GST return. In certain instances, the importer may have to file a separate rebate application to recapture the GST/HST.

It all comes out in the wash

So, while the GST is payable at the time of import, there are a number of ways that the tax ultimately washes out of the supply chain. 

Think you need to register for GST/HST? Talk to your Customs broker to chat through the benefits, drawbacks, and the process. 

We’ve been in the customs brokerage business for more than half a century. We’re ready to help.

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