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Originally Posted by PaperBagger'14
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A few years ago I had a client receive an invoice from a vendor for about $50,000 + GST. They paid the invoice and I claimed the ITCs on the invoice on my client's GST return. During a normal GST audit the CRA asked for back up and I sent in the invoice. CRA came back to me saying that the vendor was not registered for GST, so I was unable to claim the ITCs. I asked why they didn't go back to the vendor, since the vendor collected the GST, and once you reach $30,000 in annual sales you must charge GST. CRA said the vendor wasn't selected for an audit, so there was nothing I could do. This eventually got resolved, but CRA is asinine at the best of times.
Another client had registered for GST before I started with them. They also had a GST audit. CRA stated the GST registration date was September 1, not January 1, so all GST from January 1-August 31 was denied. I asked why was September 1 the first day of GST and CRA said we requested that date when we called in to them in early January. They said we must have requested forward dating the GST period to September. The company was pre-revenue, so we didn't have any invoices we could back date the GST start date. The only reason they registered for GST was to claim the ITCs, so there was no way we wanted to forward date. My guess was it was called in on 1/9, and CRA took that to mean the 1st of September, rather than January 9th. After several appeals they simply said no. There was a creative way to get the ITCs, but it took way more time and effort than it should have.