3 February 2004 GST/HST Interpretation 50370 - Subsection 232(1) of the ETA - New Housing Rebates - Excess Tax Has Not Been Charged to the Purchasers

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.

Hi Daryl,

This e-mail is further to my e-mail message XXXXX. Since that time, I have had the opportunity to review the XXXXX involving XXXXX.

XXXXX.

Paragraph 194(a) of the ETA deems tax payable to be the amount determined by the formula (A/B) x C. As such, it does not seem conceivable that this deeming provision could result in excess tax being charged to the purchaser. There seems to be consensus that the purchasers did not receive the maximum NHR to which they were entitled. However, this does not mean that excess tax has been charged/collected.

Subsection 232(1) of the ETA provides that where a particular person has charged to, or collected from, another person an amount as or on account of tax under Division II in excess of the tax that was collectible by the particular person from the other person, the particular person may, within two years after the day the amount was so charged or collected:

(a) where the excess amount was charged but not collected, adjust the amount of tax charged; and

(b) where the excess amount was collected, refund or credit the excess amount to that other person.

Since the builder did not charge or collect an excess amount of tax from the purchaser, but rather under-calculated the amount of the NHR, I would conclude that subsection 232(1) of the ETA does not apply.

Should you have any further questions, please feel free to contact me at 954-9699.

Douglas Wood, CGA
Rulings Officer
General Operations Unit
Excise and GST/HST Rulings Directorate
http://7.28.66.49/pl/organization/gst/division/GOBI/geneop-e.htm