May 2019 CPA Alberta CRA Roundtable, GST Session – Q.18

Joint venture participants, who had not made a joint venture election, purchased real estate collectively through a representative who was registered for GST/HST purposes. No s. 273 election was made. The vendor did not collect GST/HST on the sale in reliance on s, 221(2), but as it emerged, one of the purchasers was not registered for GST/HST purposes. Is there any administrative relief?

CRA responded that, given that purchaser’s non-registration, s. 221(1) imposed liability on the vendor, but “That said, the minister may consider assessing the purchaser under paragraph 296(1)(b) where warranted.”

Joint venture participants, who had not made a joint venture election, purchased real estate collectively through a representative who was registered for GST/HST purposes. No s. 273 election was made. The vendor did not collect GST/HST on the sale in reliance on s, 221(2), but as it emerged, one of the purchasers was not registered for GST/HST purposes. Is there any administrative relief?

CRA responded:

[I]n situations where a registrant may have filed an election to be relieved of the requirement to charge and collect GST/HST, but failed to do so, Audit may allow a backdated election. Generally, if the conditions of the … Election … have been met, and the parties have treated their transactions as if the election had been valid (which is supported by agreements/invoices) and the parties are otherwise compliant with the CRA, Audit will allow this election to be backdated.

Joint venture participants, who had not made a joint venture election, purchased real estate collectively through a representative who was registered for GST/HST purposes. No s. 273 joint venture election was made. The vendor did not collect GST/HST on the sale in reliance on s. 221(2) but, as it emerged, one of the purchasers was not registered.

CRA responded that, given that purchaser’s non-registration, s. 221(1) imposed liability on the vendor, but “That said, the minister may consider assessing the purchaser under paragraph 296(1)(b) where warranted.” CRA did not discuss whether s. 278(2) would preclude it from collecting on any such assessment.