Acquiring and importing goods without paying GST/HST - The Export Distribution Centre (EDC) program

The EDC Program

If you run an export-oriented business that performs limited or no processing to goods, and you do not manufacture or produce the goods, you can get relief from paying GST/HST when you acquire or import goods.

The EDC Program allows eligible businesses to import, tax free, customers' goods that they bring into Canada for processing. They can also acquire or import, tax free, inventory for resale and parts to be consumed in processing their inventory for resale or in processing customers' goods.

Qualifying for EDC

You can participate in this program if you:

• are a GST/HST registrant engaged exclusively in commercial activities;
• do not expect that at any time during the year you will manufacture or produce goods or process your inventory or your customers' goods to the point where the value added exceeds the limits specified in the legislation (10% for value added attributable to non-basic services and 20% for total value added); and
• have an export revenue percentage of 90% or more for the year.

Applying for relief from paying GST/HST

If you meet the eligibility conditions, you can apply for authorization to use an EDC certificate. Until an EDC application form is available, you should apply in writing to the Audit Section of your local CRA tax services office. In your letter, include your Business Number, your legal and trade names, and the date you would like your application to be effective. An Audit representative will contact you to review the application. Once your application has been approved, we will send you a confirmation letter that includes the EDC certificate number you will use.

When you acquire goods in Canada or import goods into Canada, quoting your EDC certificate will let your supplier or the CBSA know that you are authorized to acquire or import the goods tax free under this program.

The EDC Program lets you acquire in Canada, or import into Canada the following tax free:

• goods for resale
• your or your customers' goods for further processing;
• parts that will be incorporated into your own inventory for resale or your customers' goods.

Time limits

Your EDC authorization is valid for three years unless it is revoked earlier. You can ask us to extend your authorization.

Compliance

From time to time, we will verify your compliance with the terms of the program. We may revoke your authorization to use the EDC certificate if you no longer meet the conditions of the program. You must also determine yourself at the end of each fiscal year if you met these conditions during the year. If you did not, we deem your certificate to have been revoked immediately after that fiscal year. You may also have to make adjustments to your net tax remittable for having acquired or imported goods tax free when you no longer met the conditions, of the program.

More information

For more information or for help preparing your application, contact your CRA tax services office.