When your freight forwarder charges you GST on a shipment into Canada, the natural assumption is that you can claim it back. Sometimes you can. Sometimes you cannot. And the thing that decides it is not your bookkeeping, it is how the import was structured, which trips up a lot of Amazon sellers who assume all import GST is automatically recoverable.
The document everything hinges on
When goods cross the border, the CBSA charges import GST, separate from the GST/HST on your everyday domestic purchases. Your proof that you paid it is the B3 customs entry. No B3 in your name, no input tax credit. A surprising number of sellers never even ask their forwarder for it, which means they are leaving money at the border every single shipment.
Three structures, three different answers
- You are the importer of record. This is the usual FBA setup. Your name is on the B3, the forwarder pays the import GST on your behalf and invoices you for it. You claim it as an ITC. Keep the B3, the forwarder invoice, and proof of payment.
- The forwarder is the importer of record. Some forwarders import under their own account and then sell the goods to you domestically. Here the import GST is theirs, not yours. You do not claim it directly. Instead they should charge GST/HST on their invoice to you, and you claim that. Watch closely for forwarders who bill you for the import GST they paid and add GST/HST on top. That is double-paying, and it is common.
- Drop-ship or third-party import. When someone else imports and ships straight to Amazon, it often is not clear who the importer of record even is. If the B3 is not in your name, claiming the GST is going to be a fight you usually lose.
Do not forget the service fees
Separate from import GST, your forwarder charges for brokerage, handling, and delivery. Those are domestic services with regular GST/HST on them, and that GST/HST is always claimable as an ITC if you are registered. The mistake is lumping import GST and service-fee GST together in your books. They are two different claims and need to be recorded separately.
The other thing people confuse
Customs duties are not import GST. Duties are a cost of the product and belong in your cost of goods. Import GST is recoverable. Your B3 shows both, on separate lines, so read it.
What this is worth
Import $100,000 of inventory in a year and you might be looking at $5,000 of import GST plus a few hundred more on forwarding fees, all recoverable if you are registered and have the paperwork. If you are not claiming it, that is thousands of dollars a year you are simply handing over.
We broke down each import structure, the full document checklist, and the common mistakes on our firm's site: Can You Claim GST on Freight Forwarding Charges? It Depends on Your Import Structure.
Not sure your imports are set up so you can actually claim the GST? That is exactly the kind of thing we check for sellers, and we share the plain-English version in the newsletter.