Large businesses are subject to penalties for late reporting of recaptured input tax credits even if claims for the related ITCs also are deferred

Large businesses in, for example, Ontario are subject to the "recapture" (i.e., reversal through an add-back adjustment) of their provincial input tax credits for acquisitions of specified supplies or services, such as electricity.  Businesses generally are entitled to defer claiming ITCs for quite a number of months by reporting them in a subsequent reporting period, so that it makes intuitive sense that they also should be able to defer reporting their recaptured ITCs to the same extent.

Not so!  The large business generally is required to report the RITC by the month following the month in which the ITC was first claimable, so that a penalty of 10% of the unreported RITC amount will be payable if the ITC and the related RITC are reported only in the monthly return which is filed, say, a year later.

A large business also generally will be subject to penalties if it does not report the correct province to which an RITC relates, even if the correct net amount (ITC minus RITC) is reported.

Neal Armstrong   Summaries of National Commodity Tax, Customs and Trade Section – 2014 GST/HST Questions for Revenue Canada, Q. 22 and 2014 GST/HST Questions for Revenue Canada, Q. 21 under Electronic Filing and Provision of Information (GST/HST) Regulations, s. 7.