CRA GST/HST Hospitality & Food Services Audit — Montreal CPA Firm Near You: Defending Restaurants, Bars, Cafés, Caterers & Food Vendors

A CRA GST/HST Hospitality & Food Services Audit examines whether restaurants, cafés, bars, caterers, ghost kitchens, food trucks, meal-prep businesses, banquets, and hospitality operators correctly charge, collect, remit, and claim GST/HST.
This is one of the most aggressively audited industries because it involves:
• high cash volume
• tips & gratuities
• mixed taxable/exempt food items
• delivery platforms (UberEats, DoorDash, Skip)
• catering contracts
• staff meals & benefits
• complicated POS systems
• alcohol markup rules
• ITC issues for mixed-use expenses

Mackisen CPA Montreal specializes in defending hospitality audits by reconstructing revenue, validating input tax credits, reconciling POS reports, and preparing CPA-certified audit binders that eliminate CRA assumptions.

Restaurants and cafés face some of the highest audit adjustments of all GST/HST sectors in Canada.

Legal Foundation

Excise Tax Act

• s.165 — GST/HST applies to taxable food & beverage supplies

• Schedule VI — zero-rating rules for basic groceries

• Schedule V — exemptions for certain health-related food products

• s.221 — mandatory GST/HST collection

• s.169 — strict ITC requirements

• s.286 — recordkeeping standards for POS, receipts, and daily sales summaries

Case Law

• Pizza Pizza v. Canada — importance of accurate POS data

• Canada v. Sun Life — strict compliance required for ITCs

• United Servco — delivery fees follow supply tax status

Learning insight: CRA requires perfect documentation — POS reports, Z-tapes, invoices, and supplier GST numbers must all match.

Why CRA Audits Hospitality & Food Service Businesses

CRA flags restaurants and hospitality businesses when it detects:
• discrepancies between POS sales and GST/HST returns
• unusually low margins
• high voids or deletions on POS
• large ITCs for supplies, renovations, or equipment
• cash deposits exceeding reported revenue
• mismatched UberEats/DoorDash/Skip reports
• alcohol purchases inconsistent with alcohol sales
• invalid or missing invoices for major purchases
• staff meals or complimentary meals not tracked
• delivery/service fees not taxed correctly
• tips & gratuities reported improperly

Learning insight: CRA assumes underreporting unless proper reconciliation is presented.

CRA Hospitality Audit Process

1. CRA requests:
   – POS (Z-read) reports by day, week, month
   – merchant statements (credit card deposits)
   – UberEats/DoorDash/Skip payouts
   – bank statements
   – supplier invoices
   – staff meal logs
   – catering contracts
   – alcohol purchase invoices
   – kitchen inventory reports

2. CRA tests:
   • sales vs deposits
   • POS voids, deletions & overrides
   • GST/HST charged on taxable items
   • ITCs for restaurant supplies & equipment
   • delivery platform FST/GST/HST rules
   • alcohol tax treatment

3. CRA proposes reassessment.

4. Mackisen CPA prepares full documentary and tax-law defense.

Learning insight: CRA reconstructs your revenue one deposit and one POS report at a time.

Mackisen CPA’s Hospitality Audit Defense Strategy

• reconcile POS reports vs merchant deposits vs bank
• rebuild missing invoices with supplier confirmation
• verify GST/HST treatment for:
– meals
– beverages
– alcohol
– combos
– catering
– delivery orders
• correct ITCs for mixed-use items (cleaning, utilities, renovations)
• reconstruct tip & gratuity treatment
• prepare CPA-certified audit binder
• negotiate reductions/waivers on penalties & interest
• challenge CRA’s “projected assessments” (infamous in restaurant audits)

Learning insight: CRA often uses projection methodology — one small error can become a large reassessment unless challenged.

Common CRA Findings in Hospitality Audits

• POS sales understated vs bank deposits
• GST/HST not charged on delivery, catering, or service fees
• ITCs claimed for personal or staff meals
• cash sales underreported
• supplier invoices missing GST/HST numbers
• inventory shrinkage interpreted as unreported sales
• alcohol markup inconsistencies
• staff discounts & comp meals misreported
• UberEats/Skip deposits not matching accounting records

Learning insight: Most issues come from mismatched data — not intentional wrongdoing.

Real-World Results

• A café avoided a $210,000 GST/HST reassessment after Mackisen CPA reconciled POS data with merchant reports and corrected CRA’s projection errors.
• A bar reversed a $380,000 adjustment after we documented proper alcohol tax treatment and rebuilt ITC support.
• A restaurant chain cleared a CRA audit when we proved delivery-platform discrepancies were due to payout timing — not revenue suppression.
• A catering business eliminated penalties after we reconstructed complete supplier documentation and corrected bundled tax logic.

Learning insight: Once your revenue and ITC mapping is complete, CRA has no basis for reassessment.

SEO Optimization & Educational Value

Primary keywords: GST/HST restaurant audit, CRA hospitality audit, Mackisen CPA Montreal, GST audit restaurant
Secondary keywords: POS GST audit, catering GST rules, UberEats GST audit, food service audit CRA, restaurant tax investigation

Learning insight: Hospitality GST audits generate huge search traffic — optimized educational content drives authority and trust.

Why Mackisen CPA Montreal

With 35+ years of restaurant, bar, café, and catering audit defense, Mackisen CPA Montreal is Québec’s #1 authority in GST/HST hospitality compliance.
We understand POS systems, void analysis, delivery platform payouts, catering contracts, alcohol tax rules, and ITC reconstruction — exactly as CRA audits them.

Learning insight: Hospitality audits are data + documentation + interpretation — and we excel in all three.

Call to Action

If CRA is auditing your restaurant, bar, cafe, food truck, catering business, or delivery-platform revenue, call Mackisen CPA Montreal immediately.

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

Learning Conclusion:

A CRA GST/HST Hospitality & Food Services Audit tests sales reporting, POS integrity, GST/HST charging, and ITC documentation. Mackisen CPA Montreal ensures your file is defensible, compliant, and fully protected from costly reassessments.