CRA GST/HST Zero-Rated Supply Audit — Montreal CPA Firm Near You: Proving Eligibility for 0% Tax on Goods and Services

A CRA GST/HST Zero-Rated Supply Audit examines whether your business correctly applied the 0% GST/HST rate on goods or services that qualify as zero-rated under the Excise Tax Act. Zero-rated supplies are taxable at 0%, meaning you do not charge GST/HST but you can still claim ITCs (Input Tax Credits).
Because zero-rating gives your business a refund advantage, CRA frequently audits companies to verify that the goods or services truly meet the zero-rated criteria.

Mackisen CPA Montreal specializes in defending zero-rated audits by providing documentation, eligibility evidence, and legal justification for each transaction. We prepare CRA-ready audit binders to ensure your zero-rated supplies withstand scrutiny and your ITCs remain protected.

Legal Foundation

Excise Tax Act Schedule VI — lists all categories of zero-rated supplies, including exported goods, prescription drugs, basic groceries, medical devices, and specific international services.
Excise Tax Act s.165 — establishes the tax rates and defines zero-rated vs taxable vs exempt supplies.
Excise Tax Act s.169 — requires that ITCs claimed for zero-rated supplies meet strict documentation requirements.
Case law: Coastal Pacific Xpress v. Canada — CRA must evaluate zero-rating based on commercial reality and evidence of export or eligibility.

Learning insight: Zero-rating is a benefit, not a default — CRA demands proof.

Why CRA Conducts Zero-Rated Supply Audits

CRA flags zero-rated supply files when it detects:
• recurring or unusually large ITC refunds
• exports without complete shipping documents
• digital or international services incorrectly classified as zero-rated
• missing bills of lading, customs export documents, or courier tracking
• suppliers or customers lacking GST/HST registration
• inconsistencies between GST/HST returns and income-tax filings
• industries with high zero-rating risk (logistics, manufacturing, cross-border e-commerce)

Learning insight: CRA audits zero-rating when evidence is incomplete, not because the supply is invalid.

CRA Zero-Rated Audit Process

1. CRA requests contracts, invoices, export documents, courier tracking, and customer addresses.

2. CRA tests eligibility under Schedule VI categories.

3. CRA verifies whether goods left Canada (for exports) or whether services qualify for international status.

4. CRA checks that ITCs claimed relate directly to zero-rated supplies.

5. CRA issues proposed adjustments if documentation is weak, incomplete, or inconsistent.

6. Mackisen CPA prepares rebuttals based on evidence, shipping data, and legal references.

Learning insight: Zero-rating is documentation-heavy. The invoice alone is never enough.

Mackisen CPA’s Zero-Rated Audit Defense Strategy

• build full export documentation files (bills of lading, customs documents, airway bills, tracking logs)
• prepare Schedule VI eligibility maps for each zero-rated item or service
• verify customer residency, transaction flow, delivery location, and supply jurisdiction
• defend digital or international services with IP-location evidence or consumption-outside-Canada proof
• provide CPA-certified ITC binders linking expenses to zero-rated revenue
• correct errors and file amended GST/HST returns when required
• negotiate with CRA to remove penalties and interest for technical lapses

Learning insight: CRA accepts zero-rating when the paper trail is complete. We build that trail.

Common CRA Adjustments in Zero-Rated Audits

• denial of zero-rating for lack of export proof
• ITCs denied due to weak or incomplete invoices
• misclassification of exempt vs zero-rated supplies
• incorrect place-of-supply treatment
• services mischaracterized as “international” when consumed in Canada
• faulty documentation for drop-shipments or third-party fulfillment
• missing proof for digital-service zero-rating

Learning insight: Zero-rating errors are often technical, not intentional — but CRA still denies the claims.

Real-World Results

• A Montreal exporter had a $480,000 reassessment reversed after Mackisen CPA provided missing freight documents and reconstructed export proofs.
• A tech firm avoided a $220,000 ITC denial when we demonstrated that their digital services were consumed outside Canada and met Schedule VI criteria.
• A logistics company cleared a $310,000 zero-rating audit when we rebuilt third-party shipping evidence and reconciled their ITC trail.

Learning insight: CRA changes its position when the documentation becomes undeniable.

SEO Optimization and Educational Value

Primary keywords: GST zero-rated audit, CRA zero-rated audit, GST/HST export audit, Mackisen CPA Montreal, CPA firm near you
Secondary keywords: Schedule VI GST supplies, export documentation GST, zero-rated ITCs, CRA export verification, GST digital services audit

Learning insight: The same clarity that wins audits also boosts SEO — structured, authoritative content attracts trust from both CRA and potential clients.

Why Mackisen CPA Montreal

With 35+ years of GST/HST audit-defense experience, Mackisen CPA Montreal is one of Québec’s most advanced firms for zero-rated audits. Our bilingual CPAs understand Schedule VI, export rules, digital-service criteria, and CRA’s audit methodology — and we defend your file with precision.

Learning insight: Zero-rating requires technical accuracy and perfect documentation. We provide both.

Call to Action

If CRA is auditing your zero-rated supplies, has denied ITCs, or requested export documentation, act immediately.
Contact Mackisen CPA Montreal for zero-rating audit defense, documentation reconstruction, and refund recovery.
Phone: 514-276-0808 | Email: info@mackisen.com | Website: mackisen.com

Learning conclusion: A CRA Zero-Rated Supply Audit tests whether your 0% tax rate is legally justified and fully documented. Mackisen CPA Montreal ensures your documentation is complete, your eligibility is proven, and your ITCs remain protected.