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Goods shipped to Canada are prone to G.S.T. on importation. Such tax is actually usually assessed at the border. But let us say you are a Canadian registered for G.S.T., selling in order to some Canadian customer your supplier is in the foreign country?
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In Canada, exports are "zero-rated" sales for G.S.T. motivation. This means that when you ship a product to a person outside Canada, have to charge G.S.T. Yet, you get declare (or deduct using the G.S.T. collected by you) all the "input tax credits" (G.S.T. that you paid for business purposes) to make that export. The idea, I suppose, is to encourage exporting.
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