CBAO National Commodity Tax, Customs and Trade Section – 2013 GST/HST Questions for Revenue Canada, Q. 26.

An Ontario purchaser ("Ontario Co") remitted HST to a Quebec supplier ("Quebec Co," a GST registrant) on the basis of its view that the place of supply of a purchase of goods was in Ontario, but Quebec Co (which now is insolvent) did not remit the provincial component of the HST on the basis of a view that the place of supply was in Quebec. Ontario Co claimed an ITC.

CRA stated that "Ontario Co is not entitled to claim an ITC for any amount paid in error… ."

An Ontario purchaser ("Ontario Co") remitted HST to a Quebec supplier ("Quebec Co") on the basis of its view that the place of supply of a purchase of goods was in Ontario, but Quebec Co (which now is insolvent) did not remit the provincial component of the HST on the basis of a view that the place of supply was in Quebec. In noting that Quebec Co is required to remit the HST, CRA noted that s. 222(1) deemed amounts (other than certain amounts in the case of bankruptcy) collected on behalf of HST to be held in trust for the Crown until withdrawn under s. 222(2); and that all amounts collected by Quebec Co on account of HST are required by s. 225(1) to be included in its net tax.

An Ontario purchaser ("Ontario Co") remitted HST to a Quebec supplier ("Quebec Co") on the basis of its view that the place of supply of a purchase of goods was in Ontario, but Quebec Co (which now is insolvent) did not remit the provincial component of the HST on the basis of a view that the place of supply was in Quebec. In noting that Quebec Co is required to remit the HST, CRA noted that s. 222(1) deemed amounts (other than certain amounts in the case of bankruptcy) collected on behalf of HST to be held in trust for the Crown until withdrawn under s. 222(2); and that all amounts collected by Quebec Co on account of HST are required by s. 225(1) to be included in its net tax.