CRA GST/HST Logistics & Warehousing Audit — Montreal CPA Firm Near You: Defending Storage Fees, Fulfillment Services, Cross-Docking & Interprovincial Flows

A CRA GST/HST Logistics & Warehousing Audit targets businesses involved in storage, fulfillment, inventory management, cross-docking, kitting, pick-and-pack operations, 3PL services, cold storage, distribution centers, and integrated logistics solutions.

This sector is one of CRA’s fastest-growing audit categories because logistics companies handle:
• taxable warehousing services,
• complex interprovincial shipments,
• foreign client inventories,
• zero-rating claims for exports,
• large facility ITCs,
• imported goods requiring self-assessment,
• drop-shipping structures,
• multi-party fulfillment, and
• supply-chain activities that CRA frequently misclassifies.

Mackisen CPA Montreal specializes in defending logistics & warehousing audits with complete supply-chain tax mapping, ITC defense, and CRA-ready documentation that protects companies from six-figure reassessments.

Legal Foundation

Excise Tax Act

• s.165 — GST/HST applies to taxable warehousing & fulfillment services

• s.169 — ITC documentation rules (invoices + proof of payment)

• s.221 — requirement to charge and collect GST/HST

• s.218/218.1 — self-assessment on imported goods & digital services

• Schedule VI — zero-rating rules for export-related services

• Schedule IX — place-of-supply rules for interprovincial shipments

• s.142–143 — deeming rules for supplies performed inside/outside Canada

Case Law

• Honeywell v. Canada — strict proof required for zero-rating

• General Motors — classification of supplies must reflect economic reality

• Royal Bank v. Canada — documentation must be complete

• UPS/FedEx Cases — logistics charges follow primary supply tax status

Learning insight: CRA often misunderstands logistics operations — the defense must explain exactly what the service is and where the supply occurs.

Why CRA Audits Logistics & Warehousing Companies

CRA targets 3PLs and warehousing companies when it detects:

Revenue Risks

• storage fees not taxed correctly
• pick-pack/kitting classified incorrectly
• cross-dock fees missing GST/HST
• foreign clients treated as automatically zero-rated (often incorrect)
• fulfillment fees for e-commerce sellers not taxed properly
• intercompany location-fee structures unclear

Inventory & Shipping Risks

• in-and-out inventory flows not reconciled
• inventory shrinkage interpreted as unreported revenue
• missing proof for export shipments
• imported goods without correct self-assessment

ITC Risks

• large warehouse rent ITCs
• forklifts, conveyors, pallet systems, racks, cold-freezers
• cloud-based WMS (warehouse management software)
• utility & power bills
• invoices missing tax numbers

High-risk models:

• 3PL warehouses

• cross-dock facilities

• Amazon FBA prep centers

• cold storage facilities

• bonded warehouses

• reverse-logistics centers

• distribution hubs

• freight consolidators

Learning insight: CRA presumes rate errors + missing GST on fees + invalid ITCs.

CRA Warehousing & Logistics Audit Process

1. CRA requests:
   – storage & fulfillment contracts
   – rate sheets
   – inventory movement reports
   – pick-pack logs
   – shipping & receiving documents
   – bills of lading (BOL) & PODs
   – import (B3) & export documents
   – invoices & proof of payment
   – WMS system exports
   – ITC worksheets
   – GL & bank statements

2. CRA tests:
   • correct GST/HST on warehousing, handling & fulfillment
   • place-of-supply for shipping across provinces
   • zero-rating eligibility for foreign customers
   • validity of all ITCs
   • whether drop-ship arrangements change tax responsibility
   • whether shrinkage is properly documented
   • whether freight or fulfillment is a standalone supply or part of a bundled supply

3. CRA issues a Proposed Audit Adjustment.

4. Mackisen CPA prepares a complete documentary + legal defense.

Learning insight: CRA uses transaction sampling, then extrapolates across thousands of warehouse movements — a single error can balloon into massive assessments.

Mackisen CPA’s Logistics & Warehousing Audit Defense Strategy

• build a Supply Chain Tax Map (inbound → storage → outbound)
• classify each revenue stream:
– warehousing
– fulfillment
– picking
– kitting
– cross-dock
– reverse logistics
– labeling
• prove zero-rating for foreign clients using proper documentation
• rebuild ITC binder for warehouse rent, equipment, utilities & software
• defend or correct self-assessments for imported goods
• reconcile WMS data with GST filings
• justify shrinkage with inventory logs
• prepare CRA-ready audit binder
• negotiate penalty/interest relief

Learning insight: Logistics audits are won by explaining what each service actually is and where it takes place.

Common CRA Findings in Logistics & Warehousing Audits

• GST/HST not charged on storage or handling
• zero-rated treatment applied incorrectly for foreign clients
• ITCs denied for missing/invalid invoices
• imported goods missing self-assessment
• inventory shrinkage categorized as unreported revenue
• cross-dock services misunderstood
• bundled fulfillment packages taxed incorrectly
• intercompany transactions lacking GST/HST
• shipping documents missing (BOL/POD)

Learning insight: CRA’s biggest adjustments arise from zero-rating, ITCs, and storage-fee misclassification.

Real-World Results

• A 3PL warehouse avoided a $630,000 reassessment after Mackisen CPA rebuilt zero-rating logic and export documentation.
• A cold-storage facility reversed a $420,000 ITC denial by providing complete equipment & utility invoices.
• An FBA prep center eliminated penalties after we mapped service categories and corrected GST/HST on fulfillment fees.
• A cross-dock operator cleared CRA findings by reconciling WMS logs with outbound BOLs.

Learning insight: When logistics data is clean, documented, and CPA-certified, CRA withdraws.

SEO Optimization & Educational Value

Primary keywords: GST/HST logistics audit, CRA warehouse audit, fulfillment GST rules, Mackisen CPA Montreal
Secondary keywords: 3PL GST/HST audit, zero-rated export warehouse, warehousing GST classification, ITC denial logistics

Learning insight: Warehousing/logistics GST audits are high-volume search topics — ideal for SEO authority.

Why Mackisen CPA Montreal

With 35+ years defending 3PLs, warehouses, distributors, and logistics providers, Mackisen CPA Montreal is Québec’s #1 authority on GST/HST warehousing audits.
We understand freight flows, WMS systems, fulfillment operations, import/export rules, and CRA audit methodology better than any firm.

Learning insight: Logistics audits require operational clarity + tax law + perfect documentation — exactly what we provide.

Call to Action

If CRA is auditing your warehouse, 3PL operation, fulfillment center, or logistics services, contact Mackisen CPA Montreal immediately:

📞 514-276-0808
📧 info@mackisen.com
🌐 mackisen.com

Learning Conclusion:

A CRA GST/HST Logistics & Warehousing Audit tests storage fees, fulfillment services, place-of-supply, import/export documentation, and ITC validity.
Mackisen CPA Montreal ensures your entire supply chain is fully defended — protecting your business from high-value reassessments.