Shipping goods to the U.S. for repair is really a straightforward matter. Here, you will have two types of entries; the first being a U.S. Returned Goods Entry; and the second a Canadian B3 type entry. Any time you have goods coming back into Canada that have the Commercial Invoice and the Bill of Lading before the goods leave Canada.
By presenting the Commercial Invoice and the Bill of Lading to Customs when you return to Canada, you will be showing Customs that the goods originally left Canada and are now returning. This will avoid you paying duty and taxes on goods that have already been duty and tax paid.
One note about duty and taxes: in this scenario, if the goods are going back to the U.S. to be repaired under a warranty, then they are duty free and G.S.T. exempt when they come back into Canada. If, however, they are being repaired in the U.S. but are not under warranty, the value of the repair must be listed on the Commercial Invoice that accompanies the goods and this value is dutiable and G.S.T. applicable at the rate belonging to that commodity. Repaired under warranty or nonwarranty should be written on the Commercial Invoice.
One more note about duty and taxes – if the good is damaged beyond repair and is replaced free of charge under warranty, you will have to pay the full amount of duties and taxes for the new product. Don’t worry – you can appply for a refund of the duties you paid on the original “defective” product. Your broker can help you with your duties back in the form of a refund claim to Canada Customs.