The ARQ denied input tax credits claimed by Axamit for its 2015 year regarding GST charged by its landlord, because Axamit had not provided the ARQ with any document issued by the landlord as the ARQ considered to be required by the definition in Input Tax Credit Information (GST/HST) Regulations of “supporting documentation.” However, Gagnon J accepted the testimony of Axamit’s president that it had provided the landlord’s GST registration number to its external accountants in 2013, i.e., before they prepared its 2015 return and claimed the ITC.
In allowing Axamit’s appeal, he followed the finding in CFI Funding (quoted at para. 45) that s. 169(4) “simply provides that the registrant must have obtained the prescribed information in a form that will allow the ITCs to be determined” and that “[h]ow that information is obtained does not matter.”
In indicating that this finding was not altered by s. 223(2), Gagnon J stated (at para. 54):
[S]ubsection 223(2) does not add a condition to the provisions of ETA paragraph 169(4)(a). The application of that subsection is subject to the discretion of the purchaser. This provision does not therefore apply in all circumstances. It is a means by which a recipient can induce its supplier to provide information in support of its ITC claim. Failure by the supplier to cooperate exposes it to penalties under the ETA. The recipient is not required to exercise the right under subsection 223(2).