4 January 2002 GST/HST Ruling 38568 - GST Transitional Credit

Dear XXXXX:

Thank you for your letter of July 19, 2001. Your letter was addressed to XXXXX XXXXX and it has been forwarded to us for our response. Your letter concerns the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the GST transitional credit.

Copies of the following documents were attached to the letter:

1. A Statement of Arrears dated XXXXX, XXXXX[.]

2. Page 3 of a Statement of Adjustments dated XXXXX, to XXXXX XXXXX[.]

3. A letter dated XXXXX, to XXXXX XXXXX disallowing the claim for an amount of $XXXXX claimed on Line 111 (Rebates) of XXXXX GST return for the period from February 1, 1991 to April 30, 1991.

4. A letter (in response to your letter of XXXXX dated XXXXX, from the XXXXX explaining that, although the claim for the transitional credit was made in the correct GST return, it could not be paid because that return was not received until August 1993.

5. A letter (Reference Number XXXXX) dated October 13, 1995, to XXXXX from the XXXXX explaining that the claim for the transitional credit could not be paid because the claim was not filed until 1993.

Statement of Facts

1. The GST transitional credit was claimed by XXXXX in the tax return for the reporting period from February 1, 1991 to April 30, 1991. Our records indicate this return was received by the CCRA (formerly Revenue Canada) on August XXXXX, 1993.

2. In XXXXX, XXXXX was audited by the XXXXX and the claim for the transitional credit was denied on the grounds that XXXXX had not filed its return before the due date under subsection 346(1) of the Excise Tax Act.

3. Since that time, the XXXXX has written to you on XXXXX, and on XXXXX, explaining that XXXXX does not qualify for the credit because the GST return for the reporting period ending April 30, 1991, was not received until August 1993.

Ruling Requested

You are requesting the CCRA to allow XXXXX claim for the GST transitional credit.

Ruling Given

Based on the facts set out above, we rule that XXXXX does not qualify for the GST transitional credit and the CCRA cannot allow the claim.

This ruling is subject to the general limitations and qualifications outlined in section 1.4 of Chapter 1 of the GST/HST Memoranda Series. We are bound by this ruling provided that none of the above issues is currently under audit, objection, or appeal; that there are no relevant changes in the future to the Excise Tax Act, or to our interpretative policy; and that you have fully described all necessary facts and transaction(s) for which you requested a ruling.

Explanation

Registrants who were eligible to claim the transitional credit and who filed their GST returns on a monthly or quarterly basis were required to claim the credit in a GST return for any reporting period ending in 1991. In addition, the GST return in which the credit was claimed was required to be filed before 1993.

Although XXXXX claimed the transitional credit in a return for a reporting period ending in 1991, that return was not filed until August XXXXX, 1993. As a result, XXXXX does not qualify for the transitional credit.

We appreciate your concern with the time limit for claiming the credit. This time limit, however, is imposed by law and the CCRA has no authority to pay a claim that was filed after the legislated time limit has expired.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-0419.

Yours truly,

Anne Kratz
General Operations Unit
General Operations and Border Issues Division
Excise and GST/HST Rulings Directorate