Justice John Owen of the Tax Court of Canada has rendered one of the most important and potentially far-reaching decisions in 33 years of GST. While Fiera Foods Company v. The King, 2023 TCC 140 is about some other things, the Tax Court’s keen observations about GST “Information Requirements” is its most important part: they require sufficient evidence to be obtained prior to claiming input tax credits (“ITCs”), but do not specify or require the “form” of that evidence.
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Blog posts tagged in ITCs
Another question that we are often asked is what the CRA means by the term “carousel scheme”. It is a great question, because the CRA does not define its position on that phrase anywhere, other than in private assessment documents that it sometimes provides to GST registered persons on the wrong end of the CRA’s Notices of Assessment powers.
According to the CRA, and in its simplest form:
We have recently seen many clients make improper “corrections” or “amendments” to previously-filed GST Returns, which ultimately causes even more problems, and leads to unrecoverable GST!
In fact, there is no legislative basis for filing a corrected or amended GST Return. We regularly see clients who chose to deal with errors by making “after-the-fact” changes to “GST collectible” or “GST credits claimed” in later periods – perhaps believing that if net tax was under-reported in January, it can be fixed by adding extra “net tax” to July!
While errors on GST Returns are a fact of life, the way that these mistakes are corrected can cause bigger problems (think: lost money)!