25 Feb
2002
25 Feb
'02
2:09 a.m.
Lawrence Walker wrote:
Case in point. I bought some chips on Epay for
US$7.50. With shipping
Around US$11. The shipper for whatever reason placed the value as US$50.
Now usually I am not tagged by customs and it seems hit or miss.
In this case they charged me CAN$5 handling and 15% on the US
value(approx CAN$80) CAN$12 . I was very aggravated. About double the
price of the merchandise value and shipping. For UPS it's much worse since
they charge a $15 customs handling fee plus PST&GST (15%) and in my
case the closest agent is 60K away unless I want to pay an outrageous drop-
off fee.
Lawrence
Jerome Fine replies:
I AGREE!!! The fees that are collected are exorbitant! Especially UPS.
So when you buy items that are less than $ US 12.00, be sure to get an
agreement before you pay as to what the paper work will show.
Please read (b) and (c) again!
In general (unless I need an item very badly or it is actually worth more
than $ US 12.00), I will not bid on an eBay item at a price higher than
the GST collection limit. Plus, I always INSIST that a
"Commercial Invoice"
be included with the shipment which specifies ONLY the actual worth
of the merchandise inside the box - NOT INCLUDING any other
costs such as shipping, handling and insurance. If the shipper will
not provide a "Commercial Invoice", then I will not purchase.
Since the "Commercial Invoice" can be put on a blank piece of
paper with those words at the top and include just:
Vendor Name and Address
Customer Name and Address
Short description of item(s) and actual value
I have NEVER been refused.
EXCEPT, when shipping with USPS into Canada via ground - usually
the least expensive method, a GREEN CN-22 declaration form can
be used instead of the "Commercial Invoice". BUT BE SURE to
have the declared value to NOT INCLUDE shipping, handling and
insurance.
Sincerely yours,
Jerome Fine
Jerome Fine replies:
Just thought I might add a point or two.
I don't know which customs shaved your cable, but I presume it was
likely the US customs. I doubt that Canadian customs would be
interested in a package going to the US, although it might have been
opened and shaved in Canada - since very often it is more efficient
to do the inspection at a few central points of origin rather than
many points of destination. People are pre-cleared into the US
as well.
I've never heard any comments from people I've shipped to of problems
with
US Customs and I've had repeat business from many. With free trade you
wouldn't imagine any import difficulties since Sales tax is collected by state
agencies.
No comments on US customs since I have never
dealt with
them directly and have not heard any details from anyone to
whom I sent a package.
On Canadian customs:
(a) While they obviously perform some useful work, they are also
used as a welfare office. Since most shipments from the US to
Canada are now duty free, the only tax collected is the GST
(7% - Federal Goods and Services Tax - and in some provinces
like Ontario now when the shipment is to a person, also the
8% PST or Provincial Sales Tax). However, there is a vast
difference between how air and ground shipments are handled.
With air shipments, the so-called "clearing" of a shipment charge
is paid as part of the air freight. So if GST is charged - which
is the ONLY reason that the shipment needs to be cleared -
then ONLY the 7% GST is collected based on the ACTUAL
value of the hardware NOT including shipping, handling and
insurance. In the case of media - like floppy media - I have
been advised in the past that the ACTUAL value of the media
does NOT include any software which is contained on the media.
(b) For ground shipments, the so-called "clearing" of a shipment
is not included in the ground freight. In that case, the charge to
"clear" is really just a collection charge and is needed ONLY
when GST must be collected. In this case, in addition to
the 7% GST, the cost of "clearing" (especially by UPS) can
often be more than the difference between the air freight
cost and the ground freight cost. SO BEWARE - if there
is going to be a GST charged, then check to determine
if ground freight is actually less expensive overall.
Hmm. I tend to avoid Priority Post since it has been my perception that
these are tagged more often by Customs. Also packages that seem more
professionally packed like from a company.
(c) Normally, GST is NOT collected if the total
GST is less
than $ Can 1.40 - which means that the actual value of the
shipment is less than $ Can 20.00 or about $ US 12.00
at current exchange rates. I don't know if in Ontario where
PST is also collected if the $ Can 20.00 is still used when
the total collected is $ Can 3.00 (7% GST and 8% PST).
However, when neither GST nor PST is collected, then
the shipment is rated as "low value" and does not need
to be "cleared" since is put through under "courier remission"
i.e. it costs too much for the Federal Government to collect
less than $ Can 1.40
(d) Either under air freight or ground freight (the latter does
not matter much when it takes more than a couple of weeks
in the first place), when a shipment is in "courier remission",
it takes a full 24 hours LESS to pass through customs - so
shipments from the US which have a value of less than $ US 12.00
reach the customer a full one day sooner.
(e) Just as a matter of interest, all GST collected from a company
who receives a shipment from the US is refunded (always for
a company selling more than $ Can 30,000 a year - and usually
for most other small companies) when the company submits a
GST tax return. Since collecting the GST in the first place is
only weeks, on average, before the date when that same GST
is refunded, for a company, there is NO net gain for the Federal
government to collect the GST - other than having the money
a few weeks sooner. I don't know what percentage of the GST
collected from a company is refunded, but it is probably higher
than 90% - so, as I said, Canadian customs is mostly a welfare
office these days - since with interest rates so low, even collecting
$ Can 700 on a $ 10,000 shipment to a company probably results
in a net loss after the collection charges are considered since the
$ Can 700 is refunded in a few weeks in most cases.
Conclusion - if possible, keep the actual value of a shipment to
Canada at about $ Can 18.00 or less.
Does any of this happen in the reverse direction?
Lawrence
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