|
Attention: XXXXX
|
July 18, 1994
|
This is further to your request of May 30, 1994, to review the suggested response to XXXXX on the above issue. As we understand it, XXXXX is the recipient of taxable supplies from registrants. In isolated instances the registrants neglect to charge tax, or, in the case of an Indian band, refuse to charge and collect tax on a taxable supply. XXXXX would be entitled to an input tax credit for the tax payable on the taxable supply. The suppliers refuse to reissue invoices to account for the tax and it is clear from the agreement that the amounts on the invoices are consideration for the supply.
We would suggest that paras. 5 and 6 on page 1 be replaced with the following text:
Your obligation to pay tax to Her Majesty in right of Canada on a taxable supply will technically not be extinguished until the GST is actually paid. However, pursuant to subsection 221(1) of the Excise Tax Act (ETA), it is the obligation of the supplier as the agent of Her Majesty to charge and collect the tax on that taxable supply. There is no provision in the ETA which requires a person to self-assess the tax where the supplier fails to charge and collect.
While paragraph 296(1)(b) of the ETA does provide the Minister with the discretionary authority to assess the GST payable on a transaction, the Department's usual practice is to look to the supplier to fulfil its obligations to charge, collect and remit the tax.
The recent amendments to section 278 of the ETA clarify that only those amounts of tax payable that the supplier is not required to collect pursuant to subsection 221(2) are to be paid to the Receiver General.
Should you have any additional inquiries about this matter, please contact Alyson Trattner at (613) 952-9578.
H.L. Jones
Director
General Tax Policy
XXXXX
Email this Content