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GST Refunds

GST Refund Claims

While it is hard to truly appreciate any kind of tax, the GST/HST is respected by the business community because it promotes exports and allows businesses to purchase major assets tax-free.

There are many reasons to be in a G/HST refund position. You could be building up inventory in your off-season. You could be exporting. You could be a fish processing plant, or a grocery store, or a farmer. Refunds are part of how the system, and the government knew even before GST came into being that there would be fraudsters.

The GST Refund Integrity Program

The objective of the GST Refund Integrity Program still is to prevent paying out fraudulent GST refund claims. It was originally designed to prevent the government from the embarrassment and bad press of being duped out of taxpayer money.

MIND-BLOWING FACT – some time after Revenue Canada became CRA, they stopped doing existence checks, like the one that would have prevented this embarrassing $20 million fraud. Whereas refund claims used to be assigned to the closest CRA office, now the workload is assigned nationally and no existence checks are done.

GST Refund Audit Letter?

A letter from the GST Refund Integrity department is not a full audit, just a check. The verifier gets 5 hours to analyse your tax filings, contact you, collect info, deny or adjust the refund claim, write a report, and upload it.

A lot of times, the verifier sends a form letter, which can be very intimidating.

Unnerving as it is to get a letter from CRA, Refund Integrity officers rarely do field visits. They do, however, sometimes ask for too much, or are hard to get hold of. This can mean delayed cash flow, and stress.
Please don’t ever stress about a letter from Refund Integrity. Do take it seriously, though.