June 22, 2023
The ETA and the QTA do not provide for the correction in the current reporting period of an amount of GST/QST collectible in a previous reporting period. In addition, certain GST/QST adjustments are required to be made within a reporting period specified in the Act.
There are 3 examples of specific retroactive corrections in the table to my right.
Examples of specific retroactive GST/QST adjustments
- GST/QST not collected in a previous reporting period
For example, if you forget to collect GST and QST on taxable income invoiced in March that should have been remitted on the March GST/QST return, you cannot remit it on the December GST/QST return.
- GST/QST adjustment for a credit note issued in a reporting period.
GST/QST credits must be claimed in the reporting period in which the credit note is issued.
- GST/QST overpayments on income in a previous reporting
An application for a refund of tax paid or remitted in error under section 261 of the ETA may be made within 2 years after the amount was paid.
There are various options available to make the necessary corrections to minimize interest and penalties and comply with the Act.
For the first 2 examples, you can file amended GST/QST returns for the reporting period in question.
In some situations, it may be advantageous to use the voluntary disclosure program to avoid penalties and limit interest.