Interlining

Several carriers may take part in the supply of a freight transportation service during the course of a continuous freight movement from the shipper to the consignee, but only one carrier invoices the customer. This process is called interlining.

Only the invoicing carrier who settles the freight bill directly with the customer, who may be the shipper or the consignee, is responsible for charging and collecting any applicable GST/HST. Supplies between interlining carriers are zero-rated. This is the case even if the invoicing carrier is acting as an agent for the other carriers for collecting the GST/HST.

When a person, whose business includes the supply of freight transportation services, is shipping his or her own goods and transfers possession of those goods to a carrier, that person is the shipper and the interlining rules do not apply. In this case the person is the shipper of the goods and not a carrier.

Example
Carrier A contracts with carrier B to have carrier B transport a load of pallets owned by carrier A. Carrier B’s charge for the freight transportation service does not qualify as interlining. Therefore, if it is a domestic freight transportation service, carrier B’s service is subject to GST/HST.

If an owner-operator provides a freight transportation service on behalf of a carrier and that carrier remains responsible for invoicing the customer, the services provided by the owner operator are zero-rated since the owner-operator is an interlining carrier and is not the invoicing carrier.

For more information on how interlining applies to various situations, see :

• Couriers
• Tow-truck operators
• Gravel pit owner and dump truck operators
• Chargebacks

Forms and publications

• Booklet RC4080, GST/HST Information for Freight Carriers
• GST/HST Memoranda Series Chapter 28-2, Freight Transportation Services