CRA applies the single supply doctrine to trump the recapture of provincial ITCs

Large businesses in Ontario have their Ontario input tax credit claims for various specified property or services, such as for most motor vehicles or related services (other than repair services), "recaptured" (i.e., denied). However, the single supply doctrine applies here as elsewhere. Accordingly, charges to a car company for the costs of loaner cars provided to dealership customers who were having their own cars serviced under warranty were considered to be part of the consideration for a single supply of repair services provided by the dealerships to the car company – so that the ITCs claimed by it for the Ontario HST on those charges were not recaptured.

Neal Armstrong. Summary of 6 June 2014 Ruling 143085 under New Harmonized Value-Added Tax System Regulations, No.2, s. 28(1)(d).