CRA GST/HST Catering, Food Truck & Mobile Food Services Audit — Montreal CPA Firm Near You: Defending Taxable Meals, Mixed Supplies, Staff Tips & ITCs

A CRA GST/HST Catering & Mobile Food Services Audit targets businesses offering:

• catering (corporate & private)
• wedding catering packages
• mobile food trucks
• street vendors
• mobile cafés & coffee trucks
• event food booths
• pop-up kitchens
• private chef services
• bartending & bar service packages
• pre-packaged meals/meal boxes

This industry faces very high audit risk because it deals with mixed taxable supplies, zero-rated grocery items, tips, cash payments, mobile operations, and subcontracted kitchen staff.

Mackisen CPA Montreal specializes in defending catering & food-truck audits by mapping food-service tax classification, reconstructing ITCs, correcting POS logic, and producing CRA-ready audit binders.

Legal Foundation

Excise Tax Act

• s.165 — meals prepared for consumption are fully taxable

• Schedule VI (Zero-Rated Food Rules) — applies ONLY to basic groceries

• s.221 — obligation to collect GST/HST

• s.169 — ITC documentation rules

• s.123(1) — “prepared food”, “catering”, “supply”

• Schedule IX — place-of-supply rules for mobile operations

• s.286 — recordkeeping rules

Case Law & CRA Policy

• Prepared meals = taxable

• Catering = taxable

• Hot food = taxable

• Street food = taxable

• Grocery ingredients may be zero-rated ONLY if sold unprepared

• Royal Bank v. Canada — strict ITC documentation

• Shoppers Drug Mart Case — promotions must follow tax treatment rules

Learning insight: Almost ALL catering and food-truck sales are fully taxable — accountants must separate meals, groceries, and beverage categories properly.

Why CRA Audits Caterers & Food Trucks

CRA targets this sector when it detects:

Revenue Risks

• GST/HST missing on prepared foods
• catering packages mixing taxable (meals) + exempt (none)
• event packages without proper tax logic
• staff gratuities mishandled
• e-transfer/cash sales underreported
• food-truck POS not matching deposits
• multi-province events taxed incorrectly
• deposits not reported

ITC Risks

• missing invoices for:
– ingredients & supplies
– gas/propane
– commissary kitchen fees
– equipment
– packaging & disposables
– food-truck repairs
• food ingredients claimed as ITCs for zero-rated groceries
• personal groceries claimed as business expenses
• ITCs denied due to invalid invoices
• imported equipment (ovens, fryers) missing s.218 self-assessment

Subcontractor Risks

• kitchen staff with invalid GST numbers
• part-time cooks treated as subcontractors (T4A risk)
• second-unit food trucks subcontracted improperly

Operational Risks

• event-based revenue spikes without matching GST
• pop-up locations not recorded
• commissary kitchen usage not documented
• refunds/cancellations not adjusted
• food-truck fuel receipts incomplete

High-risk operators:

• wedding caterers

• mobile food trucks

• street food vendors

• festival/event food booths

• cloud kitchens catering off-site

• private chef/catering hybrid businesses

Learning insight: CRA assumes underreported sales, invalid ITCs, subcontractor issues in food-service operations.

CRA Catering/Food-Truck Audit Process

1. CRA requests:
   – POS reports
   – catering contracts & menus
   – food-truck daily sales sheets
   – merchant statements (Square, Stripe, PayPal)
   – bank & e-transfer records
   – supplier invoices (food, gas, packaging)
   – subcontractor payroll/invoices
   – ITC spreadsheets
   – schedule of events
   – commissary kitchen rental agreements

2. CRA tests:
   • taxable vs zero-rated item classification
   • GST/HST on all prepared meals
   • tips & gratuities treatment
   • revenue completeness vs deposits
   • validity of supplier invoices
   • subcontractor GST/HST compliance
   • imported equipment/software self-assessment
   • mobile operations in ON/Atlantic provinces → correct HST

3. CRA issues Proposed Audit Adjustment.

4. Mackisen CPA prepares a complete legal + documentary audit defense.

Learning insight: CRA uses sales-to-deposit tracing, comparing POS totals to bank activity.

Mackisen CPA’s Catering & Food-Truck Audit Defense Strategy

• build a Prepared Food Tax Matrix (meals, beverages, groceries, add-ons)
• reconstruct invoices with proper GST/HST coding
• reconcile POS → deposits → GST returns
• rebuild ITC binder for ingredients, supplies, truck costs, rentals
• correct zero-rated vs taxable ingredient classification
• validate subcontractor GST registration
• fix tip/gratuity tax treatment
• correct place-of-supply for out-of-province events
• prepare CRA-ready CPA-certified audit binder
• negotiate penalty/interest relief

Learning insight: Caterers win audits with perfect food classification + strong POS reconciliation + complete ITCs.

Common CRA Findings in Catering & Food-Truck Audits

• GST/HST not charged on:
– prepared meals
– platters
– corporate lunch packages
– wedding menus
– beverages
• zero-rated grocery items misclassified
• ITCs denied due to missing invoices
• subcontractor cooks/helpers unregistered
• equipment for personal use claimed
• POS vs bank deposits mismatched
• events in ON/Atlantic misrated
• missing GST on travel/delivery fees
• incorrect treatment of tips/gratuities

Learning insight: CRA’s biggest adjustments come from tax classification errors + ITC documentation gaps.

Real-World Results

• A wedding caterer avoided a $312,000 reassessment after Mackisen CPA rebuilt ingredient classification & POS reconciliation.
• A popular food-truck reversed a $167,000 ITC denial after invoice and fuel documentation reconstruction.
• A corporate catering firm eliminated penalties by correcting GST on delivery/travel fees.
• A festival vendor cleared CRA findings via event-by-event deposit mapping.

Learning insight: CRA backs down when the business provides CPA-organized evidence.

SEO Optimization & Educational Value

Primary keywords: GST/HST catering audit, CRA food-truck audit, taxable prepared food Canada, Mackisen CPA Montreal
Secondary keywords: food service GST rules, catering ITC denial, zero-rated groceries Canada, festival vendor GST audit

Learning insight: Catering audits generate strong SEO volume due to widespread tax confusion in food-service industries.

Why Mackisen CPA Montreal

With 35+ years defending catering companies, food trucks, mobile kitchens, and festival food vendors, Mackisen CPA Montreal is Québec’s #1 authority in GST/HST audits for food-service businesses.
We understand food classification, POS reconciliation, subcontractor networks, and CRA methodology.

Learning insight: Catering audits require food-item classification + POS accuracy + ITC discipline — all strengths of Mackisen CPA.

Call to Action

If CRA is auditing your catering business, food truck, mobile kitchen, or prepared-food operation, contact Mackisen CPA Montreal immediately:

📞 514-276-0808
📧 info@mackisen.com
🌐 mackisen.com

Learning Conclusion:

A CRA GST/HST Catering & Mobile Food Services Audit tests prepared food classification, POS reconciliation, subcontractor compliance, fuel & equipment ITCs, and multi-province tax rates.
Mackisen CPA Montreal ensures full audit defense and protection from costly reassessments