Tax Court of Canada


Goods and Services Tax

Input tax credits

Person other than specified person had to claim ITCs within four years after end of reporting period

G Ltd. owned corporate taxpayer and provided funds to financially troubled taxpayer to meet financial obligations. Taxpayer used funds to pay GST to two law firms and reconciliation error, which amounted to $5,683.95 and these payments were made around 2008 and 2009. G Ltd. claimed input tax credits (ITCs) for this amount, but claim was denied by both Minister and Tax Court of Canada, because ITCs were not validly claimable by G Ltd. as amount of credit claimed was for services provided to taxpayer, not G Ltd.. Subsequently, taxpayer filed GST return and claimed subject input tax credits in 2015. Minister denied taxpayer on basis that ITCs were not claimed within four-year limitation period specified in s. 225(4)(b) of Income Tax Act (ITA). Taxpayer appealed. Appeal dismissed. Effect of s. 225(4)(b) of ITA was that person other than specified person, and it was undisputed that taxpayer was not specified person, had to claim ITCs within four years after end of reporting period in which tax was paid. Provision was drafted restrictively having in it reference to “person”, making it clear that it was person who was claiming ITC, and not any other person, including person who had previously claimed, who must abide by statutory four-year limitation. Taxpayer was well outside four-year limitation and there was no other choice but to dismiss taxpayer’s claim.

International Hi Tech Industries Inc. v. The Queen (2018), 2018 CarswellNat 2705, 2018 CarswellNat 2735, 2018 TCC 107, 2018 CCI 107, B. Russell J. (T.C.C. [Informal Procedure]).

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