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In Canada, exports are “zero-rated” sales for L.S.T. purposes. This means that when you ship one product to someone outside Canada, you don’t charge K.S.T. Yet, you get to claim (or deduct out from the G.S.T. collected by you) all the “input tax credits” (G.S.T. that you paid for business purposes) to make that foreign trade. The idea, I suppose, is to encourage exporting.
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