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GST

Métaux Kitco inc. (Syndic de), 2016 QCCS 444 — CRA(RQ) may not set-off disputed GST ITCs in CCAA (Quebec)

This Québec Superior Court applies some reasoning similar to the Ontario Court of Appeal in Schnier.   (See esp. para. 121.  The Court specifically refers to Schnier at para. 123, FN72.) Essentially, the Court concluded that Revenue Québec (acting for itself and for CRA) could not set-off (under ETA s. 318) a disputed ITC reassessment (for over $313 million) from the pre-CCAA period against valid ITCs (and QC ITRs) for the post-CCAA… Read More »Métaux Kitco inc. (Syndic de), 2016 QCCS 444 — CRA(RQ) may not set-off disputed GST ITCs in CCAA (Quebec)

SNF LP v The Queen, 2015 TCC (Rip J.) — If you made necessary inquiries as to whether the person had a proper GST number when you started dealing, that is sufficient to claim ITCs unless you are alerted to a suspicious change

This could be an extremely helpful decision for businesses dealing with multiple suppliers and trying to assess how much checking they must do on suppliers before safely claim input tax credits. There were cues in this case that might have alerted this large institutional scrap metal dealer that something was wrong with these 12 suppliers.   Some used the same business address. A few used… Read More »SNF LP v The Queen, 2015 TCC (Rip J.) — If you made necessary inquiries as to whether the person had a proper GST number when you started dealing, that is sufficient to claim ITCs unless you are alerted to a suspicious change

Cartier House Care Centre Ltd. v. The Queen 2015 TCC 278 (Paris) — home care services supplied to nursing homes supply under contract are exempt if some of the funds to pay for them are from government agencies

This case involved a request for rebate by BC retirement facilities for GST paid to the contractors that supply the staff that did the actual attendant care.  The Court agreed with the nursing homes that the homemaker services they had from contractors were exempt supplies under ETA Sch V, Part II, former s. 13.   Based on the reading of Paris J., the 2013 amendments… Read More »Cartier House Care Centre Ltd. v. The Queen 2015 TCC 278 (Paris) — home care services supplied to nursing homes supply under contract are exempt if some of the funds to pay for them are from government agencies

K.M. Construction et Rénovation inc. c. La Reine 2015 CCI 206 (Lamarre, ACJ) — You need your own valuation to challenge CRA’s assume property value

GST applies to non-arm’s-length transfers of property based on the fair market value of the property.  (ETA s. 155.)  This case involved a transfer of real property from a corporation to its shareholders, after construction. The appellant collected the tax based on a bank valuation given for purposes of the construction loan. CRA relied, instead, on a municipal property tax valuation. Generally, taxpayers must disprove assumptions… Read More »K.M. Construction et Rénovation inc. c. La Reine 2015 CCI 206 (Lamarre, ACJ) — You need your own valuation to challenge CRA’s assume property value

Tele-Mobile Company v. The Queen, 2015 TCC 197 (Miller J.) — calls from the US to Canada are subject to GST

In this case, Justice Miller considers whether Telus subscriber calls from the US to Canada are subject to HST. Reviewing section 142.1, he concludes that they are. [25]        I am prepared to review the facts before me addressing each of these factors, but it is important to distinguish at the outset the difference between viewing two alleged separate supplies in context versus… Read More »Tele-Mobile Company v. The Queen, 2015 TCC 197 (Miller J.) — calls from the US to Canada are subject to GST

Maxwell v. The Queen 2015 TCC 74 (D’Arcy) — Director is only liable for corporation’s tax debts up to amount shown in Federal Court certificate 

The Federal Court certificates which CRA filed against the corporate tax debtors was less than the amounts assessed against the director. So Justice D’Arcy reduced the director’s liability down to the amounts shown in the certificates.  Justice D’Arcy relied on the wording of the directors’ liability rules which he summarizes:   [10]        [ITA] Section 227.1 places certain limitations on the director’s liability. Two of these… Read More »Maxwell v. The Queen 2015 TCC 74 (D’Arcy) — Director is only liable for corporation’s tax debts up to amount shown in Federal Court certificate 

McCartie v. Canada (National Revenue), 2015 FC 222 (Zinn) – CRA can register you for GST even if you don’t agree

[22]           The CRA also submits that any issues relating to whether Mr. McCartie owes a GST debt, falls within the jurisdiction of the Tax Court of Canada and says that Mr. McCartie’s allegation that the CRA does not have the constitutional authority to register his GST account is a disguised attack on the validity of the GST debt.  The owing of GST, it… Read More »McCartie v. Canada (National Revenue), 2015 FC 222 (Zinn) – CRA can register you for GST even if you don’t agree

Al-Hossain v. The Queen, 2014 TCC 379 (Lyons) — TCC wrongly says you must go to provincial court to appeal disallowed Ontario New Housing Rebate

As many do, the new home buyer in this case added a friend’s name to the agreement of purchase and sale and to the title for the home, to help get bank mortgage financing.  The friend never intended to live in the building and never did.  So, the TCC confirmed the CRA’s decision to refuse the appellant’s claim for the rebate.   But in a… Read More »Al-Hossain v. The Queen, 2014 TCC 379 (Lyons) — TCC wrongly says you must go to provincial court to appeal disallowed Ontario New Housing Rebate

Belval c. La Reine, 2014 CCI (Jorre) — You must pursue your appeal diligently or risk having it dismissed 

This is a rare case where the Court dismisses a tax appeal for delay: “[55]       When one considers the events that I have just described, it is clear that the appellant has not acted with promptness. Not only has the appellant not complied with two orders, but more generally the appellant has a way of acting in which he does not respond or responds… Read More »Belval c. La Reine, 2014 CCI (Jorre) — You must pursue your appeal diligently or risk having it dismissed 

Kosma-Kare Canada inc. c. Canada, 2014 CAF (Gauthier) — You can’t claim ITCs for work your contractor did not do, but you don’t have to pay penalties for using employees below minimum wage

Kosma-Kare lost its appeal against disallowed ITCs.  “[5]   … the [Tax Court] judge had already concluded that the respondent [the Crown] had shown that the workers used by Kosma-Kare could not have been the employees either of 9167 nor of 9199 [the supposed empolyment agencies whose invoices Kosma-Kare had sought to use to get input tax credits], nor of subcontractors with whom these agencies… Read More »Kosma-Kare Canada inc. c. Canada, 2014 CAF (Gauthier) — You can’t claim ITCs for work your contractor did not do, but you don’t have to pay penalties for using employees below minimum wage

Garage Gilles Roy (2007) inc. c. La Reine, 2014 CCI (Favreau) — GST on warranty repairs isn’t remittable until the reporting period when the manufacturer approves the work

The appellant made warranty repairs to heavy trucks.  It sent warranty claims to the manufacturers who appraised the work and approved all, part or none of the bill.  Only on approval would the manufacturer pay the bill.  CRA claimed that GST was collectible when the claim was sent; the appellant said the amount payable was not fixed and due until the manufacturer approved it.  Justice… Read More »Garage Gilles Roy (2007) inc. c. La Reine, 2014 CCI (Favreau) — GST on warranty repairs isn’t remittable until the reporting period when the manufacturer approves the work

Berkovich v. The Queen, 2014 TCC (Lyons) — To qualify for the GST New Housing Rebate a judge must believe that you signed the agreement to purchase intending to live in the unit as your home

CRA refused to give the Appellant, a real estate agent, the new housing rebate.  She claimed she bought the condominium unit to live in with her spouse who (at the time they signed the agreement) worked 30 kilometers from the condominium.  She also claimed that they lived in the condominium unit, though her credit card statements and other facts didn’t support that.  The judge did… Read More »Berkovich v. The Queen, 2014 TCC (Lyons) — To qualify for the GST New Housing Rebate a judge must believe that you signed the agreement to purchase intending to live in the unit as your home

Kandiah v. The Queen, 2014 TCC (C Miller) — New Housing GST Rebate: You or your relative must intend to live in the building as your primary residence; “Camping” doesn’t count.

“[1]            Mr. Mahendran Kandiah appeals by way of the informal procedure the Minister of National Revenue (the “Minister”) assessment denying Mr. Kandiah the GST/HST New Housing Rebate (the “Rebate”) of $24,000 in connection with the purchase of 50 Minerva Avenue in Toronto. To qualify for this Rebate, which is an Ontario rebate, it is still necessary for Mr. Kandiah to bring himself within the requirements… Read More »Kandiah v. The Queen, 2014 TCC (C Miller) — New Housing GST Rebate: You or your relative must intend to live in the building as your primary residence; “Camping” doesn’t count.

Hedges v. The Queen, 2014 TCC (C. Miller) — illegal drugs sold for “therapeutic reasons” could be zero-rated for GST

In this case, the TCC ruled that illegal drugs sold for “treatment, mitigation or prevention of a disease, …, or its symptoms”, are still “drugs” for GST purposes.  The result would be that they’re “zero-rated” under ETA s. VI:I:2(d); i.e., no tax collectible on their sale but the supplier could claim input tax credits.   “[66]        A more generic definition is, I find, appropriate, and given the FDA is the primary regulatory regime… Read More »Hedges v. The Queen, 2014 TCC (C. Miller) — illegal drugs sold for “therapeutic reasons” could be zero-rated for GST

2253787 Ontario Inc. v. The Queen, (2014 TCC Bocock) — You can’t get HST ITCs if you buy product through agents which you couldn’t buy directly on your own

“The Appellants are two private companies incorporated for a single purpose: to commercially engage in the process of leapfrogging the staged continental releases of the iconic Apple iPhone 4 and iPhone 4s in 2010 and 2011, respectively. “Wily entrepreneurs such as Mr. Cao, the principal of the two Appellants, circumvent this regional launch management through a series of micro-managed purchases of product in the protective… Read More »2253787 Ontario Inc. v. The Queen, (2014 TCC Bocock) — You can’t get HST ITCs if you buy product through agents which you couldn’t buy directly on your own

Sarrazin c. La Reine, 2014 CCI Favreau — Don’t give gifts to or accept gifts from family members who may owe tax debts

A father gifts land worth about $64,000 to his son.   The son sells the land back to the father about a week later for $2000. At the time of the transfers, the son owed sales taxes of about $60,000. Was the father liable for the son’s tax debts ETA s. 325(2), based on the below-market non-arm’s length transfer under ?  Yes, said Justice Favreau.   One can’t tell… Read More »Sarrazin c. La Reine, 2014 CCI Favreau — Don’t give gifts to or accept gifts from family members who may owe tax debts

McDavid v. The Queen, 2014 TCC Lamarre — Independent truckers may be able to claim GST ITCs on a variety of business expenses, including advertising 

Can you buy a motorcycle for your son to race in motocross and claim GST/HST input tax credits on the purchase and other race-related expenses because the motorcycle carries advertising for your business?  The Court in this case said the appellant could.   “[24] In my view, Ms. Ryan identified a business purpose with respect to all of the claims. The respondent did little to… Read More »McDavid v. The Queen, 2014 TCC Lamarre — Independent truckers may be able to claim GST ITCs on a variety of business expenses, including advertising 

Toronto-Dominion Bank v. Comrie and Comrie, (2014 ONSC Coats) — Ontario Finance has priority over mortgagees for unpaid retail sales tax

Suppose you lend money to someone and take a mortgage as security.  Unknown to you, the debtor owes provincial retail sales tax.  Does the Crown’s Retail Sales Tax Act claim have priority over your mortgage?  Justice Coats says it does.   This view may shock some, as it suggests that a RSTA tax liability has priority over all security interests, even if the security is taken before the tax debt… Read More »Toronto-Dominion Bank v. Comrie and Comrie, (2014 ONSC Coats) — Ontario Finance has priority over mortgagees for unpaid retail sales tax

DiFlorio v. The Queen, (2014 TCC Rip CJ)–If your spouse is carrying on a business, you are not necessarily his partner

Suppose your spouse carries on a business.  Are you his partner just because you sign cheques, deposit them in a joint account, send packages by courier, and do other incidental services?  No, says Chief Justice Rip. Mr. DiFlorio carried on a business of selling illegal drugs to improve racehorse performance.  CRA assessed him and his wife for unremitted GST, treating them as partners in the… Read More »DiFlorio v. The Queen, (2014 TCC Rip CJ)–If your spouse is carrying on a business, you are not necessarily his partner

Rochefort v. The Queen, (2014 TCC C. Miller) — You can get the GST/HST New housing rebate even if a friend goes on title to help with mortgage financing

Suppose you sign an agreement of purchase and sale to buy a new home.  But the bank insists that you have a co-signor for the mortgage and put him or her on title.  Your friend agrees to co-sign, not expecting to pay anything on the mortgage or to have any real interest in the new home.  You move in.  Can you still get the GST/HST… Read More »Rochefort v. The Queen, (2014 TCC C. Miller) — You can get the GST/HST New housing rebate even if a friend goes on title to help with mortgage financing

9120-1616 Québec Inc. c. La Reine, (2014 CCI Favreau)–If your reported sales don’t match CRA’s estimates, you may have to pay extra tax, GST, penalties and interest

If you don’t report all the sales in your point of sale system and your alcohol purchases by volume exceed what you reported you sold, (as inferred from your reported sales and your average sale prices), can CRA or Revenue Quebec estimate the unreported sales and assess you for unreported GST/HST/QST?  Yes.   This was another restaurant case where Revenue Quebec estimated that the restaurant… Read More »9120-1616 Québec Inc. c. La Reine, (2014 CCI Favreau)–If your reported sales don’t match CRA’s estimates, you may have to pay extra tax, GST, penalties and interest

George v. The Queen, (2014 TCC Lamarre)–You can’t get GST input tax credits without valid receipts (or, at least, a credible story)

If you don’t have receipts showing a valid GST registration number, you can’t prove that you didn’t claim the credits in prior years, and you don’t have receipts for all your claimed credits, can you still claim input tax credits?  If the Court believes that you had valid receipts at the time you filed your returns, you might still be able to get the credits.… Read More »George v. The Queen, (2014 TCC Lamarre)–You can’t get GST input tax credits without valid receipts (or, at least, a credible story)

Global Cash Access (Canada) Inc. v. Canada, (2013 FCA Sharlow) — Financing fees aren’t subject to GST, if the fees are paid to someone for disbursing cash to your clients

Say you’re at a casino (or anywhere else) and you get a cash advance voucher from a cash kiosk and the casino gives you the cash.  You pay a fee for that service and the kiosk company pays a fee to the casino (or store, etc.).  You don’t pay GST on the financing fee.  But should the cash advance company pay GST on its fee to… Read More »Global Cash Access (Canada) Inc. v. Canada, (2013 FCA Sharlow) — Financing fees aren’t subject to GST, if the fees are paid to someone for disbursing cash to your clients

Kosma-Kare Canada Inc. c. La Reine, (2014 CCI Lamarre) — You can’t get GST Input tax credits on your payroll

Can you claim input tax credits for fake invoices?  Of course not.   Revenue Quebec has faced many ITC claims for GST/QST based on third party invoices, often, as in this case, involving payments to temporary employment agencies.  RQ finds or suspects that these third party agencies are not real businesses but shell companies that give “convenience bills” (“factures de complaisance”) to allow the registrant… Read More »Kosma-Kare Canada Inc. c. La Reine, (2014 CCI Lamarre) — You can’t get GST Input tax credits on your payroll