Cases
Métaux Kitco Inc. v. ARQ and AG, 2016 QCCS 444
Paquette J found that CRA and ARQ could not use their statutory set-off rights, under CCAA s. 21, ETA s. 318 and LAF s. 31, to set off input tax credit and input tax refund claims generated by an insolvent company (“Kitco”) after it went into protection under the CCAA against (disputed) assessments made by them in which they denied ITCs and ITRs of $313 million that had been claimed and paid by Kitco before the CCAA proceedings. She found that to permit such set-off would give the Agencies an advantage over the unsecured creditors (by taking all of the post-CCAA credits for themselves) and therefore violate the principle that all unsecured creditors should be treated equally.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Other Legislation/Constitution - Federal - Companies' Creditors Arrangement Act - Section 21 | CRA precluded from setting off assessed amount for pre-CCAA filing periods against post CCAA ITC claims of taxpayer | 306 |
| Tax Topics - Excise Tax Act - Section 299 - Subsection 299(3) | no presumption of validity in CCAA proceedings | 121 |
| Tax Topics - Income Tax Act - Section 152 - Subsection 152(8) | no presumed validity in CCAA proceedings | 89 |
Administrative Policy
7 April 2022 CBA Roundtable, Q.4
A registered supplier files its outstanding HST returns for the last 8 years, reporting the HST that it failed to charge for those reporting periods, and claiming available ITCs. It would like to be reassessed, at the least, for the earlier of those reporting periods so that it can now charge HST on the supplies and tell its suppliers that they will benefit from the extended period under s. 225(4)(c) for claiming ITCs on the basis inter alia that it has only now been assessed for those periods.
CRA indicated that “[o]nce GST/HST returns are filed, the registrant will receive a notice of assessment if either …a refund or rebate is owed … [or] the amount owing is more than the payment made by the registrant” – but not if the amount owing on the return as filed equals the payment made on filing. Furthermore, if an offset was available to CRA under s. 318, “subsection 315(1) of the ETA does not allow collection action under section 318 unless the amount has been assessed.”
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Excise Tax Act - Section 225 - Subsection 225(4) - Paragraph 225(4)(c) | CRA will assess long-overdue returns provided there is a net tax or net refund position | 221 |
| Tax Topics - Excise Tax Act - Section 296 - Subsection 296(1) | assessment is made if a net refund or tax amount is owing | 197 |
| Tax Topics - Excise Tax Act - Section 296 - Subsection 296(2) | CRA will grant ITCs beyond the normal period for claiming them only if they are offsettable against tax owing | 201 |
| Tax Topics - Excise Tax Act - Section 281.1 - Subsection 281.1(2) | electronic filing penalties will not apply if paper returns are filed for a voluntary disclosure that is accepted | 131 |
| Tax Topics - Excise Tax Act - Section 296 - Subsection 296(4) - Paragraph 296(4)(a) | ability to carry forward or back 4 years overpayment balances within the statute-barred period for application to reporting periods with unpaid tax | 249 |
TIB B-100 "Standardized Accounting" November 2007
[S]ection 318 of the ETA allows the CRA to set off a GST/HST debt of a person against any amount payable to the person by the Receiver General. Conversely, section 224.1 of the Income Tax Act allows the CRA to set off an income tax debt of a person against any amount payable to the person by the Receiver General, such as a GST/HST refund or rebate.
13 May 1997 Interpretation HQR0000255
Generally speaking, section 318 of the ETA is an enforcement provision used by the government to recover delinquent payments of tax and other sums payable or remittable by a person under Part IX. The Department deducts these amounts from (or sets them off against) money owed by any government department to the person - which would include an FST New Housing Rebate payable under Part VIII of the ETA. The person may request the Minister to exercise the discretion provided in section 318 of the ETA, for the purpose of offsetting funds due by the Crown to the person. However, before the Minister can initiate offset action, section 315 of the ETA requires the amount of tax payable or remittable under Part IX of the ETA be assessed.
26 April 1994 Interpretation File No.11750-3
Except where a receivership and a bankruptcy coexist, the right of set-off under s. 318 of the ETA allows the Minister to apply any refunds or rebates generated during a receivership to pre-receivership liabilities if the receiver takes over all of the assets of the person.
For receivers appointed after 1992, if the receiver takes over relevant assets of the person, (i.e. some but not all of the assets of the person) the Department may only use refunds/rebates generated during a receivership to offset any pre-receivership debits that relate to those relevant assets. Because those assets are treated as if they were assets of a separate person, they are not available to satisfy any pre-receivership debt that is not attributable to the relevant assets.