For most businesses the time frame for claiming a GST or HST refund is four years. If you file a return and missed claiming the Input Tax Credit (ITC) for a refund, you typically have four years from the filing deadline to make the claim. Missing out on GST and HST credits can be a costly mistake for businesses. Make sure you receive advice from a professional accountant if you suspect problems with your GST or HST filings.
If your activities include importing products, make sure your bookkeeper is correctly claiming the GST and HST paid when you import the products. Inexperienced bookkeepers can easily record the amounts paid at customs incorrectly, either by recording the whole amount as duties or only a small percentage of the total as sales tax. When clearing customs the GST and HST amounts paid are not assessed on the value of the duty, but rather on the value of the product. As a result, you have to look at each customs import slip and find the exact amount of sales tax charged. Otherwise you will be missing out on a significant amount of your GST or HST credits.
There are certain businesses that are only allowed two years to make a GST or HST claim. Examples include listed financial institutions and business with sales exceeding $6 million a year. Section 225, subsection 4 of the Excise Tax Act governs Limitations of ITC’s. If you suspect you’ve missed claiming your GST and HST credits and need help fixing your situation, book an appointment with one of our accountants and we’ll let you know what options are available.
Solomon Nordine is the owner and president of Complete Accounting Solutions. Mr. Nordine is a Fellow Public Business Accountant (FPBA) and a United States Accountant.