Cost Calculation for Importing Diamond from US to Canada

[Detox]

Calling all Canadians (and those who know the answer)

I am considering purchasing a diamond from a US Vendor and having the diamond shipped to Toronto, Canada.
As I understand it;

1. I am not responsible for the state tax from where the diamond was purhcased
2. I am responsible for PST and GST
3. I am responsible for 10% excise tax (luxury tax)
4. Exchange rate of USD to CAD must be taken into account.

Which Formula is correct:

1. Price(USD) x Exchange Rate x 1.25 (assuming 15% sales tax and 10% excise tax)

or

2. Price(USD) x Exchange Rate x 1.10 (10% Excise tax) x 1.15 (15% sales tax)

Basically my question is do you pay the PST and GST on top of the excise tax? (ie. tax on tax)

Many Thanks

Detox

 

[perl8429]

Yup! A friend of mine bought a ring from the states, and had to pay the excise tax, plus the GST and the exchange rate. I don''t think he had to pay PST since he did not buy the diamond in Canada.

Good Luck
perl

 

[bedubyah]

Detox,

Fellow Canadian here.

This may come as a shock to you the excise tax is only 8% now

. Its kind of a misconception that it is still at 10% - I beleive its being phased out slowly or scaled back to a lower %. Check out the following link:

http://www.cra-arc.gc.ca/E/pub/et/currate/currate-e.html

Also, I think that you only pay PST on something if you buy it within your province (i.e. I live in Saskatchewan and if I was to order a diamond online fro a dealer in BC then I wouldn''t pay PST). GST still apllies.

As to which formula - I am not sure but I don''t think you should have to pay tax on a tax??

I hear some people buy the diamond from a dealer in the US and then go on a holiday and pick it up and propose down there - if you decide to claim it as you come back is your choice

 

[Detox]

Thankyou very much for the responses.

I have finally settled on the specs of the diamond I am after, the issue now is cost and how to calculate it. Even using a worst case scenario of 10% excise tax and 15% sales tax, I still find that purchasing a diamond from a US Vendor is approximately $2000CAD cheaper.

I understand that the all of the different vendors I have talked to need to make a profit, but when I ask for GIA or AGS certed stones I am always told, "you pay a premium for that" which is reflected in the price against the non GIA AGS certed stones.

That being said, on the weekend I viewed an AGS000 stone and a similar spec''s GEMSCAN stone and they both looked stunning. The AGS stone cost signficantly more than the GEMSCAN stone though. However, if I can purchase the AGS000 stone from the US for even less than the price of the GEMSCAN stone offered in Canada I would be assured a great stone at a lesser price.

Wow I am confused.