CRA GST/HST Compliance Audit — Montreal CPA Firm Near You: ITCs, Place of Supply

A CRA GST/HST Compliance Audit reviews whether your business is correctly collecting, remitting, and claiming Goods and Services Tax (GST) and Harmonized Sales Tax (HST). CRA verifies that Input Tax Credits (ITCs) are properly supported and that correct tax rates are applied based on where goods and services are supplied.
Mackisen CPA Montreal provides full CRA audit defense — from documentation to rate validation — ensuring your returns meet every technical and procedural requirement under the Excise Tax Act.

Legal Foundation

Law: Excise Tax Act ss. 165–169 (imposition and ITC entitlement), s. 286 (record-keeping obligations), s. 289 (CRA’s power to inspect and verify).
Jurisprudence: Northwest Company Inc. v. Canada (2011 TCC) — CRA can deny ITCs even when tax is paid if invoices lack required details such as supplier name, registration number, or description of supply.

Learning insight: CRA doesn’t question your integrity — it questions your documentation. Mackisen CPA ensures your paperwork proves your compliance.

Why CRA Conducts GST/HST Compliance Audits

CRA selects businesses for audit when refund claims, tax rates, or supplier data deviate from expected norms. The most frequent audit triggers include:

• Large or repeated refund claims compared to revenue.

• Suppliers lacking valid GST/HST registration numbers.

• Incorrect application of place-of-supply rules.

• Discrepancies between income tax and GST/HST filings.

• Refund claims for partially exempt or mixed-use activities.

Learning insight: CRA algorithms detect imbalance — Mackisen CPA restores equilibrium by aligning your numbers with your documentation.

CRA Audit Process

1. Initial Contact: CRA issues an audit letter identifying reporting periods and requested records.

2. Document Review: Auditors request invoices, ledgers, and bank statements to verify GST/HST charged and claimed.

3. Field Visit (if applicable): CRA may conduct on-site verification for high-volume or high-risk accounts.

4. Reassessment Proposal: CRA provides a list of potential adjustments or disallowed ITCs.

5. Audit Resolution: Mackisen CPA responds with supporting evidence, legal citations, and appeal-ready documentation.

Learning insight: CRA’s findings are not final — they’re negotiable, if supported by the right proof.

Mackisen CPA’s GST/HST Audit Defense Strategy

1. ITC Verification: Validate supplier invoices for all legal elements required by ETA s.169(4).

2. Payment Proof: Match bank transactions and receipts to ensure every credit has evidence of payment.

3. Rate Validation: Confirm that place-of-supply rules and provincial rates were applied correctly.

4. Exempt and Zero-Rated Classification: Clarify treatment for services, exports, and financial transactions.

5. CRA Representation: Handle all auditor communications and formal responses under professional privilege.

Learning insight: A CRA audit isn’t about numbers — it’s about how well those numbers are documented. Mackisen CPA turns your records into evidence that speaks for itself.

Common CRA Findings in GST/HST Audits

• Invalid Supplier Registration: ITCs claimed from unregistered vendors.

• Incomplete Invoices: Missing tax breakdowns or supplier details.

• Improper Use of Zero-Rating: Applying 0% tax to supplies not meeting export or financial-service definitions.

• Overclaimed ITCs: Deductions on personal or mixed-use expenses.

• Duplicate Refund Claims: Filing the same ITC across periods.

Mackisen CPA identifies and corrects these issues before CRA completes the review — often preventing reassessment entirely.

Learning insight: CRA denies credits based on technical errors, not tax fraud. A CPA fixes the technicalities that protect your credits.

The Importance of Place-of-Supply Rules

CRA uses “place-of-supply” rules to determine the correct GST/HST rate for each transaction.

• Québec and Alberta: 5% (GST only).

• Ontario: 13% (HST).

• Nova Scotia, PEI, NL, NB: 15% (HST).

• Zero-Rated Exports: 0%.

Mackisen CPA ensures your invoices apply the correct rate for every province and cross-border transaction — a key factor in avoiding reassessment.

Learning insight: One incorrect postal code or province code can create a $10,000 audit adjustment. Mackisen CPA prevents that error before it happens.

SEO Optimization and Learning Value

Primary Keywords: CRA GST/HST Audit, GST/HST Compliance Canada, Mackisen CPA Montreal, CPA Firm Near You, Input Tax Credit Audit, Place-of-Supply Verification.
Secondary Keywords: CRA GST documentation, HST refund audit Canada, GST ITC disallowance, Mackisen CPA tax audit defense, Revenu Québec QST verification.

Learning insight: The same precision that wins audits also builds Google authority — Mackisen CPA’s expertise is both discoverable and defensible.

Real Client Success

• A Montréal manufacturer recovered $420,000 in denied ITCs after Mackisen CPA proved supplier registration and corrected missing invoice fields.

• A logistics firm avoided penalties when our team justified cross-border zero-rating with export and customs documentation.

• A professional-services firm had its GST/HST refund released within 14 days after we submitted a CPA-certified audit binder.

Learning insight: CRA closes files faster when you submit proof, not promises. Mackisen CPA provides proof — organized, compliant, and convincing.

Why Mackisen CPA Montreal

With 35 years of experience in indirect-tax compliance and audit defense, Mackisen CPA Montreal represents businesses of all sizes — from startups to multinational corporations. Our bilingual CPAs understand both CRA and Revenu Québec procedures, ensuring that every GST/HST or QST transaction passes regulatory standards.

Learning insight: CRA measures compliance through precision — Mackisen CPA builds precision into every number, receipt, and filing.