GST/HST Registration and Remittance: Taxpayer Relief

Posted on August 19th, 2025 in Domestic Tax

Floral shop owner sitting at a table working on a computer with assistant. Lots of flowers on the table.

A December 20, 2024, Federal Court case reviewed an application for judicial review of CRA’s decision denying penalty and interest relief related to the taxpayer’s failure to register for GST/HST and file GST/HST returns for the 2020 through 2022 years. CRA notified the taxpayer on June 23, 2023, that he was required to register for GST/HST. CRA issued notices of assessment on July 31, 2023, for outstanding balances for 2020, 2021, and 2022, including failure to file penalties and arrears interest. CRA denied the taxpayer’s request for relief from the penalties and interest.

Taxpayer loses

The Court found that CRA’s decision not to provide relief was reasonable. The fact that the payer remitted GST/HST on the taxpayer’s behalf did not absolve the taxpayer of its responsibility to register for GST/HST, file the returns, and remit payments. The Court also agreed with CRA that the payer’s remittance did not provide a basis for providing the taxpayer with relief.

The Court noted that CRA was also not required to consider the taxpayer’s “prompt registration and filing” of his overdue returns (the date the taxpayer registered and filed was not provided in the ruling) in its decision, as over a month had passed after he was informed of his obligation to register and file returns. Further, whether the taxpayer “acted quickly to remedy the omission or the delay in compliance” is only considered if “circumstances beyond the taxpayer’s control” prevented them from complying with the Act. In this case, the taxpayer admitted that the issue arose due to human error. There was, therefore, no extraordinary circumstance, as CRA explained that “human error is considered within the Applicant’s control.”

Register for and file GST/HST returns promptly. Failure to do so can lead to penalties and interest.

Download

Article originally published in: Tax Tips & Traps 2025 Second Quarter – Issue 150.