Please note that the following Policy Statement, although correct at the time of issue, may not have been updated to reflect any subsequent legislative changes.

GST/HST policy statement P-149R

Date of Issue

Issued June 1, 1994
Revised September 21, 1999

Subject

Administrative policy regarding adjustments to the goods and services tax/harmonized sales tax return

Legislative Reference(s)

Section 225 of the Excise Tax Act

National Coding System File Number(s)

11695-16

Effective Date

June 1, 1994 for GST; April 1, 1997 for HST

Issue and Decision

This policy discusses the restrictions which apply to requests for adjustments to previously filed GST/HST returns.

Amounts included on previously filed GST/HST returns may be adjusted, except where a person is attempting to increase the amount of input tax credits (ITCs) or other credit adjustments without a corresponding increase in tax liability for the same reporting period.

All requests for adjustments to previously filed GST/HST returns should be made in writing, provide details of the requested adjustments, and be addressed to the registrant's local tax services office.

In certain circumstances, administrative flexibility may be exercised to make adjustments for missed ITCs without a corresponding increase in tax liability for the same reporting period. For example, where a registrant is an annual filer who would be required to wait over 12 months to claim a missed ITC, the Department may consider the registrant's request to amend the previously filed GST/HST return. The circumstances surrounding a registrant's request will be taken into account when deciding whether to adjust a previously filed return. For example, an audit of the registrant's records may be required.

Flexibility may also be exercised in situations of financial hardship where delaying a net tax refund by not making an adjustment for a missed ITC would have a severe negative impact on the registrant's business.

SAMPLE RULINGS

Sample Ruling No.1

Statement of Facts

1. A registrant has filed a GST/HST return for the first quarter of its current fiscal year.

2. The following information was provided on that return:

3. The registrant has made a request to amend the previously filed GST/HST return.

4. The request contained the following information:

Ruling Given

An adjustment to reflect the proper amount for "Sales and Other Revenue" will be made.

Sample Ruling No.2

Statement of Facts

1. A registrant has filed a GST/HST return for the third quarter of its previous fiscal year.

2. The following information was provided on that return:

3. The registrant has made a request to amend the previously filed GST/HST return.

4. The request contained the following information:

Ruling Given

An adjustment to reflect the proper amounts for "Total GST/HST and Adjustments" and "NET TAX" will be made.

Sample Ruling No.3

Statement of Facts

1. A registrant has filed a GST/HST return for the second quarter of its current fiscal year.

2. The following information was provided on that return:

3. The registrant has made a request to amend the previously filed GST/HST return.

4. The request contained the following information:

Ruling Given

An adjustment will not be made to reflect the increase in "Total ITCs and Adjustments".

Rationale

The policy states that previously filed GST/HST returns will not be adjusted to claim missed ITCs or other credit adjustments that do not offset a previously unreported tax liability for the same reporting period. As such, an additional refund will not be payable and the registrant should claim the missed ITCs or other credit adjustments in the next reporting period.
In this case, administrative flexibility has not been exercised as the registrant is a quarterly filer and the facts do not indicate that there is financial hardship.

Sample Ruling No. 4

Statement of Facts

1. A registrant has filed a GST/HST return for the fourth quarter of the previous fiscal year.

2. The following information was provided on that return:

3. The registrant has made a request to amend the previously filed GST/HST return.

4. The request contained the following information:

Ruling Given

An adjustment will be made to reflect the proper amounts for "Total GST/HST and Adjustments", "Total ITCs and Adjustments", and "NET TAX".