Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.
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TO:
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XXXXX
XXXXX
XXXXX
XXXXX
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FROM:
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Corinne Campbell-Rosser
Corporate Reorganizations Unit
Excise and GST/HST Rulings Directorate
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DATE:
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May 30, 2007
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CASE NUMBER:
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82754
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SUBJECT:
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Retroactive Adjustments to Input Tax Credit (ITC) Allocation Methods
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This concerns XXXXX retroactive adjustments to input tax credit (ITC) allocation methods. All legislative references are to the Excise Tax Act (ETA) and the regulations thereunder, unless otherwise specified.
Facts
Our understanding of the facts in this case is as follows:
1. XXXXX.
Issue
Can a registrant that is using an allocation ratio for calculating ITCs that it claims on its GST/HST returns amend that allocation ratio retroactively to claim an additional ITC amount for a period for which the registrant has already made a claim? In particular, does subsection 141.01(5) or subsection 225(3) prevent such a retroactive amendment?
Our comments
It is a question of fact as to whether a particular allocation method meets the conditions in subsection 141.01(5) for any particular year. XXXXX.
Where an allocation method does meet these conditions and is used to calculate an ITC in accordance with the formula in subsection 169(1), subsection 225(3) would not permit a retroactive revision of that method unless it is intended either to correct an error, or to include amounts that could not previously be taken into account in arriving at the allocation rate because the registrant had not previously been able to meet the documentary requirements of subsection 169(4). Consequently, subsection 225(3) prevents any retroactive amendment to an ITC allocation method where the previous method met the conditions of subsections 141.01(5) and 169(4) and was not in error.
Please note, we have not included a discussion of proposed section 141.02 because it does not apply to the time period being considered for purposes of this response.
If you require any further information concerning this issue, please contact me at 613-957-8226.
2007/06/07 — RITS 84779 — Municipal Designation
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