CRA To Force GST/HST Registration
New subsections 241(1.3) to (1.5) of the ETA (enacted with other 2014
budget measures in Bill C-31) empower the CRA to unilaterally register a
person who has not registered for GST/HST but, in the CRA’s view, is
required to do so. The budget states that these amendments will
strengthen GST/HST registration compliance and help the CRA to combat
the underground economy.
Generally, a business making more than $30,000 annually in taxable
supplies is required to be registered pursuant to ETA subsection 240(1).
Once a business becomes a registrant, it is required to comply with
various statutory obligations, including charging, collecting, and
remitting GST/HST in respect of any taxable supplies; filing periodic
GST/HST returns; and maintaining books and records supporting those
Under the new provisions, the CRA will first send a “notice of
intent” to a non-registrant. If that person has not applied for
registration within 60 days of the notification, the CRA is allowed to
register and assign a GST/HST registration number to the person. It is
unclear whether the CRA will issue an assessment for unpaid tax at the
same time that it sends the notice of intent, or whether it will delay
the assessment until the GST/HST registration number has been assigned.
The CRA will advise the non-registrant of the unilateral registration
and the effective date of the registration, which is not to be earlier
than 60 days after the date of the notice of intent. The registration
date is important because no ITCs can be claimed for GST/HST paid on
inputs that were incurred prior to registration. It is unclear whether
the CRA will allow the non-registrant to claim ITCs on any tax paid on
its inputs that were incurred prior to the CRA’s unilateral
When a business objects to an assessment, it can appeal to the TCC.
However, if a business objects to the CRA’s unilateral decision to
register it, no appeal right is provided. Thus, if an aggrieved person
disagrees with the CRA (perhaps on the basis that it was not legally
required to be registered at the time the CRA took steps under these
rules to effect a registration), it will have to bring a formal
application for judicial review to the FC.
The CRA’s previous difficulties in registration compliance do not
seem to be greatly reduced under the new legislation, because the new
rules do not address the main challenge—identifying non-compliant
businesses. The main strategies are still matches, leads, projects, and
pursuing previously identified non-filers.
Also, the previous law appeared to provide the CRA with all necessary
legal powers. Under ETA subsection 123(1), which has not been amended, a
“registrant” is a person that is registered or that is required to be
registered. Therefore, a non-compliant business (a business that should
be registered but is not) was and is required to comply with all the
Millar Kreklewetz LLP, Toronto