17 April 2000 GST/HST Interpretation 30484 - GST Joint Filing

In your email of March 14, 2000, that was originally sent to Jacques Allard and then forwarded to this Unit, you presented two scenarios that you would like interpreted.

The first scenario is as follows, in regards to the same reporting periods, in GST Joint Filing the Coordinator must file for all members, all the returns for offset. The Coordinator provides a letter of direction which says which period the offsets are for. You state in your email that you are of the understanding that the Excise Tax Act (the Act), the procedures and the GST 303 form, imply that the Joint Filing groups may only offset current (current being the reporting period being filed) debits with current credits, and as a result, any excess credit is to be refunded to the client that filed the credit return. You are unable to find anything specific to confirm this and would like us to provide an answer to back it up.

The second scenario is regarding compliance. In your procedure it says that the officers are not to DINS (release the credit) until the account is compliant. Also, for each period to be "closed" the balance must be zero. You state that you are unable to find a reference in the Act to this. You would like to revoke the application from groups that for example, have several periods of previous debit. These groups are now filing jointly. Some accounts are ignoring their previous debits, while others are attempting to pay off these debts with credits from other accounts in their joint filer group; both situations, you believe, are against the Joint Filer intention.

The interpretation is as follows:

The GST/HST Joint Filing program is administered under the provisions set out in subsection 228(7) of the Act and the regulations to subsection 228(7). According to the prescribed rules set out in the Offset of Taxes by a Refund or Rebate (GST) Regulations, the tax remittable by any member may be reduced or offset by the amount of a refund or a rebate, or a portion thereof, that any other member is entitled to under the Act in respect of any reporting period during or following that of, which the coordinator of the group has received an acknowledgement from the CCRA that the joint application has been received and before the earliest of any reporting period (a) during which a corporation ceases to be a member, (b) during which a member does not comply with the Act or these regulations, or (c) set out in a notice filed by the coordinator on behalf of the members, that the members no longer intend to offset or reduce the taxes of any member by the amount of a refund or rebate that another member is entitled to under the Act.

Based on this paragraph of the rules, if a member is not compliant with the Act they are unable to continue filing returns jointly. Non compliance can include outstanding returns, and outstanding debts. In response to the first scenario, credits can not be carried back to satisfy the debt of another member for a previous period as that debt would be considered to be non compliance and then the group would be unable to file jointly. In response to your second scenario, the joint filing provisions do not provide a mechanism to "revoke" an application but it does allow a manner in preventing the use of the joint filing program until full compliance is met by all members.