Is value for duty always just the commercial invoice price?

Often close to it, but not automatically identical — CBSA's Valuation for Duty Regulations can require specific additions (assists provided by the buyer, royalties, certain packing costs) that a bare invoice price wouldn't capture on its own. Confirm with your customs broker whether any adjustment applies to your specific transaction.

Does LDCT reduce GST as well as duty?

LDCT treatment doesn't eliminate GST directly, but it eliminates duty, which reduces the value for tax GST is calculated on — the same mechanical effect illustrated in the worked example above, just via a different preferential program than CPTPP.

Where can I find the correct HS code and duty rate to run this calculation?

See our HS code classification guide for how to determine the correct classification, and the relevant commodity page on this site for the specific MFN and CPTPP/LDCT rates we've sourced for that category.

Canada Import Fundamentals

Duties and GST on Imports, Explained

Duty and GST aren't calculated independently of each other — GST applies to the value for duty plus the duty itself, a two-step sequence, not two parallel calculations on the same base.

Get a Rate

Standard federal GST rate

Value for duty

The base figure duty is calculated against

Value for duty + duty

The base figure GST is calculated against

Two-step

Mandatory calculation sequence

A two-step calculation, in a specific order

Value for duty is generally the price actually paid or payable for the goods, adjusted under CBSA's Valuation for Duty Regulations for certain additions where applicable (assists, royalties, certain packing costs) — it's the base figure the applicable duty rate (standard MFN, or a preferential rate like CPTPP or LDCT where the shipment qualifies) is calculated against.

GST, at the standard 5% federal rate, is then calculated on the 'value for tax' — defined under the Excise Tax Act as the value for duty plus the duty actually payable — not on the value for duty alone. This means GST is always calculated after duty is determined, never in parallel with it, and the GST amount ends up slightly higher in dollar terms than a flat 5% of the pre-duty goods value would produce.

Where a shipment qualifies for a preferential rate — a CPTPP rate for a Vietnam, Malaysia, or Singapore-origin shipment meeting the relevant rules of origin, or LDCT treatment for Bangladesh-origin goods — the duty component of this calculation can drop to zero, which correspondingly reduces the value for tax that GST applies to, even though GST itself isn't eliminated by either program.

Calculating duty and GST, in order

The mandatory sequence CBSA's own guidance sets out.

Determine value for duty

Price paid or payable, adjusted per the Valuation for Duty Regulations where applicable.

Determine applicable rate

Standard MFN, or a preferential rate (CPTPP, LDCT) where the shipment genuinely qualifies and is properly documented.

Calculate duty

Value for duty × applicable rate.

Calculate value for tax

Value for duty + duty payable.

Calculate GST

Value for tax × 5% (plus any applicable provincial component, confirmed separately).

CBSA Calculation Sequence

GST is calculated on value for duty plus duty — never calculate the two independently against the same base figure

A quick estimate that applies 5% GST directly to the pre-duty goods value will understate the actual GST owed whenever duty is above zero. Confirm the two-step sequence with your customs broker for an accurate landed-cost estimate.

Source: Excise Tax Act (R.S.C. 1985, c. E-15); CBSA, Guide to Importing Commercial Goods into Canada, Step 3. Last verified July 2026.

Worked example

A worked example: standard MFN vs a preferential rate

Take a CAD $10,000 shipment with an 8% MFN rate, comparing the standard-rate outcome against a scenario where it instead qualifies for a CPTPP Free rate.

At standard MFN: duty = $10,000 × 8% = $800. Value for tax = $10,000 + $800 = $10,800. GST = $10,800 × 5% = $540. Total landed duty + tax = $1,340.

If the same shipment instead qualifies for a CPTPP Free rate with a valid Certificate of Origin: duty = $0. Value for tax = $10,000 + $0 = $10,000. GST = $10,000 × 5% = $500. Total landed duty + tax = $500 — a genuine $840 saving on this shipment, and a concrete illustration of why the commodity pages on this site emphasize confirming CPTPP eligibility properly rather than assuming it.

What UAL confirms before quoting a landed cost estimate

We calculate duty and GST in the correct two-step sequence against the actual applicable rate — standard MFN or a genuinely qualifying preferential rate — so a landed-cost estimate reflects what CBSA will actually assess, not a simplified approximation.

Accurate two-step duty/GST calculation at quote stage

Preferential rate eligibility confirmed before assuming a saving

Frequently asked questions

It depends on the destination province and the importer's specific registration and tax status — some provinces apply harmonized sales tax mechanics that differ from a simple federal-GST-only calculation. Confirm the applicable provincial treatment with your customs broker rather than assuming 5% is always the complete tax picture.

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Bangladesh RMG Export Shipping Guide

Cross-Border E-Commerce Air Freight Basics

Source: Excise Tax Act (R.S.C. 1985, c. E-15); CBSA, Guide to Importing Commercial Goods into Canada, Step 3; Valuation for Duty Regulations. Last verified July 2026.