Enterprise Rent-A-Car – Ontario Court of Appeal finds that amounts labelled on invoices as “HST” should be treated as having been collected as HST, not RST

Although both the taxpayer (Enterprise) and the Ontario Minister of Finance agreed that Enterprise (which had been collecting amounts labelled on its invoices for sales of its insurance products as “HST” and remitting those amounts to CRA) should have been collecting RST and not HST on those sales, they also was agreed that the Minister’s assessments of Enterprise could only be sustained under s. 18 of the RSTA, which permits assessments of the “tax collected”. The Court concluded, principally on the basis of the above labelling:

The “tax collected” by Enterprise was not RST but HST. The Minister therefore had no basis to assess the “tax collected” by Enterprise.

Before so concluding, the Court stated:

Enterprise’s practices are consistent with CRA policy in its GST/HST Policy Statement P-131R that: “Generally, a person will be considered to have collected an amount as or on account of tax where the person issues an invoice for the supply to the customer indicating the amount of GST/HST payable and subsequently collects the amount.”

Neal Armstrong. Summary of Enterprise Rent-A-Car Canada Company v. Ontario (Finance), 2022 ONCA 327 under ETA s. 225(1) – A(a).