3 May 1999 GST/HST Interpretation HQR0001666 - Due Diligence by a Supplier

Thank you for XXXXX letter of February 19, 1999 with her attached draft reply concerning the query of December 2, 1998 from XXXXX XXXXX with respect to subsections 221(2) and 228(4) of the Excise Tax Act (the Act).

Interpretation Requested

The question is whether the Department would ever assess a supplier on a taxable sale of property for the failure of the recipient, a registrant for purposes of the Act, to report and remit the Goods and Services Tax (GST), where the supplier has obtained from the recipient a "Statutory Declaration" or a "Certificate and Acknowledgment" to the effect that the recipient is a GST registrant and the supply is not a supply of a residential complex.

Interpretation Given

Due diligence by a supplier should normally include obtaining a confirmation of the registration number from the nearest Tax Services Office. As you are aware, we only confirm the validity or non-validity of a number provided to us together with a registrant name, and we do not provide a recipient's registration number to the supplier.

We generally agree with your draft reply that each situation is reviewed on a case-by-case basis and we reserve the right to assess the supplier, based on the facts. However, where the requirements of subsection 221(2) of the Act are met, no assessment can be raised against the supplier. Accordingly, you may wish to ask XXXXX[.] Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-9587.

Yours truly,

B. Tran
Real Property Unit
Financial Institutions and Real Property Division
GST/HST Rulings and Interpretations Directorate