26 February 2015 CBA Roundtable, Q. 23

New ss. 241(1.3) to (1.5) require CRA to give 60 days’ notice before registering a person who has failed to register. How does this affect the decades-old auditing practice of simply assigning a GST/HST registration number to someone who should have been registered, and then assessing the person under that number for unremitted net tax? CRA responded:

The CRA’s new discretionary registration authority under subsection 241(1.5)…does not preclude the CRA from assessing a particular person who should have been registered for unremitted net tax. If the CRA exercises the authority under subsection 241(1.5)…to register a particular person, the CRA could still assess that person under paragraph 296(1)(a)…for unremitted net tax in respect of reporting periods prior to that person’s effective registration date.

New ss. 241(1.3) to (1.5) contemplate that CRA can register a person whom it suspects of being required to be registered for GST purposes after giving 60 days’ notice, but with the effective date of the registration to be no earlier than 60 days after giving such notice. CRA considered that these provisions do not interfere with its current practice of simply assigning a GST/HST registration number to someone who should have been registered, and then assessing the person under that number for unremitted net tax – and noted that

CRA could still assess that person under paragraph 296(1)(a) of the ETA for unremitted net tax in respect of reporting periods prior to that person’s effective registration date. [emphasis added]