HST CANNOT BE SET OFF AGAINST DEBTS OWNING
BCAA CONFIRMS HST CANNOT BE SET OFF AGAINST SUPPLIER’S DEBTS
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Many commercial agreements include broad rights of set-off, which sophisticated businesses use to net out liabilities between parties. While that seems straightforward in commercial terms, businesses run into problems when applying this practice to GST/HST. Under the Excise Tax Act, HST collected – or collectible – by a supplier is NOT the supplier’s money to begin with. Rather, it is money held in trust for the Crown.