Ahmad – Tax Court of Canada finds that CRA was required to determine, when assessing, whether the taxpayer had an unclaimed GST/HST rebate

CRA correctly assessed an individual (Ahmad) so as to deny the new housing HST rebate (because, due to a change in plans, the first use of the new home was its rental to a third party), and advised him that he might consider applying for the New Residential Rental Property Rebate (NRRPR). Ahmad instead appealed the denial of the new housing rebate, and did not apply for the NRRPR until the two-year deadline for doing so (under ETA s. 256.2(7)(a)) had passed – and also failed to file a Notice of Objection to the CRA assessment denying his NRRPR claim.

As one would expect, Russell J found that Ahmad could not appeal the assessment denying him the NRRPR. However, Russell J found that CRA, in assessing Ahmad for the HST that was payable given the absence of the new housing rebate, had been required under s. 296(2.1) to in fact determine whether that assessment was reduced by another allowable rebate, namely, the NRRPR. Russell J referred this assessment back to CRA for the required determination under s. 296(2.1) as to whether Ahmad was entitled to an allowable rebate for the NRRPR.

CRA would not like the notion that, when assessing GST/HST, it is required to consider whether a rebate is available to a taxpayer even before it is claimed, and presumably will not do so (see 183783). This case suggests that the taxpayer may have a remedy where there is such a failure.

Neal Armstrong. Summary of Ahmad v. The Queen, 2017 TCC 195 under s. 296(2.1).