Mac's Convenience Stores - Tax Court finds that an ITC entitlement for a related financial supply arises whenever there is "some connection" between the financial supply and the registrant's commercial activities

An HST/GST provision (ETA s. 185(1)) entitles a registrant (other than a financial institution) to claim input tax credits on purchases used in the making by it of financial services, provided that the purchased goods or services "relate" to a commercial activity of the registrant.  The Tax Court has found that this test was satisfied by ABM machines of Mac's Milk which were used by it to make exempt ABM services to its customers, but which also generated additional sales at its stores.  Accordingly, it was entitled to full ITCs for the HST or GST payable on its purchases of the machines.

Hogan J. rejected CRA's submission that this rule is restricted to financial services which are "incidental or ancillary to a registrant's primary business operations."

Neal Armstrong.  Summaries of Mac's Convenience Stores Inc. v. The Queen, 2012 TCC 393 under ETA - s. 185(1) and ETA - s. 123(1) - financial service.