Adjustment for prior return provided no increased ITCs
Amounts included on previously filed GST/HST returns may be adjusted, except where a person is attempting to increase the amount of input tax credits (ITCs) or other credit adjustments without a corresponding increase in tax liability for the same reporting period.
Discretion to allow ITCs
In certain circumstances, administrative flexibility may be exercised to make adjustments for missed ITCs without a corresponding increase in tax liability for the same reporting period. For example, where a registrant is an annual filer who would be required to wait over 12 months to claim a missed ITC, the Department may consider the registrant's request to amend the previously filed GST/HST return. The circumstances surrounding a registrant's request will be taken into account when deciding whether to adjust a previously filed return. For example, an audit of the registrant's records may be required.
Flexibility may also be exercised in situations of financial hardship where delaying a net tax refund by not making an adjustment for a missed ITC would have a severe negative impact on the registrant's business.
Sample Ruling No. 4
- The adjustment request for a previously-filed return (within the normal reassessment period) is granted where the ITCs claimed increase, but the net tax also increases.