CRA GST/HST Lock Installation, Locksmith Emergency Service & Key Cutting Contractor Audit — Montreal CPA Firm Near You: Defending Taxable Services, Parts, Emergency Calls, Subcontractors & ITCs

A CRA GST/HST Locksmith & Lock Installation Audit targets:

• mobile locksmiths
• emergency lockout service providers
• door lock installation technicians
• deadbolt & smart-lock installers
• key-cutting and rekeying specialists
• security lock upgrade contractors
• automotive lockout technicians
• subcontract locksmith helpers

Locksmith work is one of CRA’s fastest-growing audit categories because it combines:

• urgent emergency calls (often cash/e-transfer)
• taxable parts (locks, cylinders, keys, smart modules)
• mobile service routes
• subcontract helpers
• vehicle-heavy ITCs
• weak documentation for late-night/emergency work

Mackisen CPA Montreal specializes in defending locksmith businesses by correcting GST/HST treatment, rebuilding invoices, validating subcontractors, and reconstructing ITCs for tools, parts, travel, and vehicle usage.

Legal Foundation

Excise Tax Act

• s.165 — ALL locksmith labour, installation, lockout service & key cutting are fully taxable

• s.221 — locksmiths must collect GST/HST on all services

• s.169 — ITCs allowed only with full documentary proof

• s.141.01 — allocation rules for mobile tools & vehicles

• Schedule IX — GST/HST based on location of the serviced property

• s.123(1) — defines “repair,” “installation,” “service,” “labour”

CRA & Case Law

• Lock installation = taxable

• Lockout/emergency service = taxable

• Key cutting = taxable

• Rekeying cylinders = taxable

• Royal Bank v. Canada — invoice defects eliminate ITCs

• CGI v. Canada — place-of-supply determined by property location

• Northwest Company Inc. — supplier invoices must meet statutory standards

Learning insight: No locksmith work is exempt — even unlocking a front door for 30 seconds requires GST/HST.

Why CRA Audits Locksmiths & Lock Installation Contractors

Revenue Risks

• GST/HST not charged on emergency lockouts
• cash/e-transfer micro-jobs not reported
• key-cutting fees not invoiced
• discounted late-night calls missing GST
• lock installation bundles not itemized
• deposits for smart-lock upgrades omitted
• automotive lockouts underreported
• QC/ON/Atlantic service-area jobs misrated

Subcontractor Risks

• locksmith helpers lacking GST registration
• cash labour with no invoices
• invalid GST/HST numbers
• misclassification (employee vs subcontractor)
• missing T4A filings for repeated subcontract work

ITC Risks

• missing receipts for:
– locks, deadbolts, cylinders
– smart-lock modules & keypads
– key-cutting blanks
– drill bits, bits, punches
– PPE & gloves
– OBD tools (vehicle lockout gear)
– fuel, tires, vehicle repairs
• imported tools not self-assessed for GST (s.218)
• personal-use tools included
• home garage/tool storage ITCs overclaimed

Operational Risks

• no job logs (lockouts rarely logged)
• WhatsApp/SMS bookings with no invoice
• emergency work not matched to deposits
• lock purchases inconsistent with revenue
• multi-site property manager clients underreported
• automotive lockouts not itemized

High-risk operators:

• 24/7 emergency locksmiths

• mobile locksmith vans

• automotive lockout specialists

• subcontract-heavy lock installation teams

Learning insight: CRA flags locksmiths whose parts purchases far exceed declared service revenue.

CRA Locksmith & Lock Installation Audit Process

1. CRA requests:
   – invoices (lockout, installation, rekeying, key cutting, parts)
   – subcontractor invoices + GST numbers
   – bank & e-transfer statements
   – supplier receipts (locks, hardware, blanks, key machines)
   – job logs / dispatch logs
   – mileage logs
   – ITC spreadsheets
   – import receipts for tools / smart-lock modules
   – T5018 summaries

2. CRA tests:
   • GST/HST applied to ALL services & parts
   • subcontractor GST/HST compliance
   • ITC documentation integrity
   • logs → invoices → deposits → GST returns match
   • imported tools self-assessed?
   • material purchases vs revenue volume
   • QC/ON border jobs taxed correctly

3. CRA issues Proposed Audit Adjustment.

4. Mackisen CPA prepares the full legal + documentary defense.

Learning insight: CRA rebuilds locksmith activity using part receipts, e-transfer logs & emergency-call patterns.

Mackisen CPA’s Locksmith Audit Defense Strategy

• create a Locksmith Tax Matrix (lockout, install, rekey, key cutting, parts, travel)
• rebuild GST/HST-compliant invoices
• validate subcontractor GST numbers
• reconstruct ITC binder (tools, locks, vehicle, PPE)
• reconcile job logs → invoices → deposits → GST filings
• defend part wastage (broken cylinders, test keys, drill-outs)
• correct GST/HST for cross-province jobs
• rebuild imported-tool self-assessment entries
• prepare a CPA-certified CRA audit binder
• negotiate removal of penalties & arrears

Learning insight: Locksmith audits are won with job-by-job logs, part reconciliation & subcontractor compliance.

Common CRA Findings in Locksmith Audits

• GST/HST not charged on emergency lockouts
• subcontractor invoices missing GST
• ITCs denied for missing receipts
• imported tools missing self-assessment
• bank deposits > reported revenue
• lock purchases inconsistent with declared jobs
• travel fees untaxed
• automotive lockouts unreported

Learning insight: CRA’s top assumption: “You bought more locks than you installed on invoices.”

Real-World Results

• A 24/7 emergency locksmith avoided a $189,000 reassessment after Mackisen CPA reconstructed call logs & parts usage.
• A mobile locksmith reversed a $121,000 ITC denial with complete tool & lock receipts.
• A smart-lock installer eliminated penalties by correcting GST/HST on parts + labour.
• An automotive lockout specialist cleared CRA findings via deposit → invoice → log reconciliation.

Learning insight: Detailed job logs immediately weaken CRA’s position.

SEO Optimization & Educational Value

Primary keywords: GST/HST locksmith audit, CRA lock installation audit, taxable lockout service Canada, Mackisen CPA Montreal
Secondary keywords: key-cutting GST, locksmith ITC denial, subcontract locksmith audit, imported lock tools GST

Learning insight: Locksmith GST compliance is a major SEO theme due to cash-based emergency work.

Why Mackisen CPA Montreal

With 35+ years defending locksmiths, security hardware installers & mobile lockout techs, Mackisen CPA Montreal is Québec’s #1 authority in GST/HST lock-service audits.
We understand emergency workflow, part usage patterns, subcontractor behaviour & CRA audit methodology deeply.

Learning insight: Locksmith audits require tight part-tracking, subcontractor validation & GST discipline — all strengths of Mackisen CPA.

Call to Action

If CRA is auditing your lock installation, emergency lockout, rekeying, or key-cutting business, contact Mackisen CPA Montreal immediately:

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

Learning Conclusion:

A CRA GST/HST Locksmith Audit tests taxable labour, parts documentation, subcontractor GST compliance, ITC proof & revenue reconciliation.
Mackisen CPA Montreal ensures full audit protection.