GST 201: BAD DEBT GST RECOVERY HAS STRICT RULES
SEVERAL CONDITIONS MUST BE MET TO RECOVER TAX PAID ON UNCOLLECTIBLE DEBT
Download a PDF copy of this Blog here.
For businesses dealing with unpaid invoices, section 231 of the Excise Tax Act (ETA) offers a vital form of relief: the ability to recover GST/HST previously remitted on debts that have become uncollectible. However, as the recent Tax Court of Canada (TCC) decision Heydary Green Professional Corporation v. The King, 2026 TCC 69 (“Heydary”) demonstrates, this relief is only available to those who strictly adhere to the ETA’s technical requirements.
In this GST 201 Series blog, we review section 231 and the statutory rules for bad debts, as well as what Heydary shows about the process that must be followed to benefit from this section.