How to Issue Correct Receipts Showing GST/QST to Customers

Introduction
Every business owner in Quebec who sells taxable goods or services must issue receipts that correctly display GST (Goods and Services Tax) and QST (Quebec Sales Tax). A simple receipt mistake missing tax details, incorrect registration numbers, or miscalculated totals can lead to serious problems, from customer disputes to Revenu Québec or CRA (Canada Revenue Agency) audits.

Proper invoicing is more than good bookkeeping it’s a legal requirement under Canadian and Quebec tax law. At Mackisen CPA Montreal, we help businesses create receipts and invoices that meet every legal requirement, protect their clients’ trust, and provide bulletproof documentation in case of an audit.

This comprehensive guide will show you step-by-step how to issue correct receipts showing GST and QST, the laws that govern them, and the essential details your invoices must contain to be compliant and audit-proof.

Legal and Regulatory Framework
Businesses are legally required to issue receipts that include full GST/QST information under the following laws:

• Excise Tax Act (Canada) s.169(4) — states that a business must provide specific details, including the GST registration number, for the purchaser to claim Input Tax Credits (ITCs).

• Taxation Act (Quebec) s.257 and s.407 — requires receipts to include the supplier’s valid QST number to allow customers to claim Input Tax Refunds (ITRs).

• Tax Administration Act (Quebec) s.34 — mandates businesses to maintain and preserve accurate sales documentation for at least six years.

Failing to issue compliant receipts can cause your customers to lose their tax credits and trigger audits for both parties.

Step-by-Step: How to Issue Correct Receipts Showing GST/QST

1. Include Complete Business Information
   Every receipt or invoice must include:

   • Your legal business name and operating name (if applicable).

   • Complete business address.

   • Invoice or receipt number (unique sequential reference).

   • Date of issue and, if applicable, date of supply/service.

2. Add Customer Information (for B2B transactions)
   For sales to other registered businesses, include the customer’s name and address. This helps them claim their Input Tax Credits (ITCs) and ensures Revenu Québec compliance.

3. Show Detailed Transaction Descriptions

   • Description of goods or services provided.

   • Quantity and unit price before tax.

   • Subtotal before GST and QST.

4. Display GST and QST Separately

   • Show GST (5%) and QST (9.975%) as separate lines.

   • Do not combine them into a single “sales tax” line.

   • Example:

     • Subtotal: $1,000.00

     • GST (5%): $50.00

     • QST (9.975%): $99.75

     • Total: $1,149.75

5. Provide Your GST and QST Registration Numbers

   • GST number format: 9 digits + RT0001 (e.g., 123456789RT0001).

   • QST number format: TQ + 10 digits (e.g., TQ1234567890).

   • These numbers must be active and valid with CRA and Revenu Québec.

6. State the Total Amount Payable
   Always include the final total, with all taxes applied. Round correctly and ensure the total matches the payment amount received.

7. Indicate Payment Method
   Note whether payment was made in cash, credit card, or e-transfer. This helps reconcile sales and provides traceability during audits.

8. Issue Receipts Digitally or in Print

   • Digital receipts (email, PDF, POS-generated) are legally valid if they include all required information.

   • Always retain copies for your records for at least six years.

Jurisprudence and Legal Insight
Courts have repeatedly ruled that tax compliance depends on the accuracy and completeness of documentation:

• Hickman Motors Ltd. v. Canada (SCC 1997) — CRA assessments are presumed correct; only full documentation can disprove them.

• Canderel Ltd. v. Canada (SCC 1998) — Financial records must reflect commercial reality and proper tax calculations.

• Vancouver Art Metal Works Ltd. v. Canada (FCA 2015) — Input Tax Credits were denied due to missing GST numbers on supplier receipts, even though the transactions were legitimate.

These rulings prove that an incomplete receipt is legally equivalent to no receipt at all in the eyes of Revenu Québec and CRA.

Documentation: Recordkeeping and Verification
To stay compliant and audit-ready:

• Store copies of all receipts issued—digitally or physically—for at least six years.

• Archive daily sales summaries from your POS or accounting system.

• Reconcile your total sales with GST/QST collected each month.

• Retain proof of CRA and Revenu Québec registration for both your business and your suppliers.

Mackisen CPA configures automated invoice and receipt templates for clients that meet all CRA and Revenu Québec standards—ensuring every sale is documented properly, without manual errors.

How CRA and Revenu Québec Verify Receipts During Audits
Auditors routinely inspect issued receipts to verify:

• GST and QST registration numbers are valid and active.

• Taxes were calculated and charged correctly.

• Totals reconcile with your filed GST/QST returns.

• No sales were omitted or misclassified as tax-exempt.

Revenu Québec also uses electronic audit tools to match receipts issued by your business with supplier and client filings—detecting underreporting or missing documentation instantly.

Winning With CRA and Revenu Québec
At Mackisen CPA Montreal, we ensure your receipts and invoices meet every legal and technical requirement. Our strategy includes:

1. Audit-Proof Templates – We design CRA/ARQ-compliant invoice formats tailored to your business.

2. POS and Accounting Integration – We sync your systems so every receipt records GST/QST automatically.

3. Verification and Training – We train your staff to issue receipts correctly and avoid rounding or tax calculation mistakes.

4. Compliance Monitoring – We perform quarterly audits to ensure your documents match your tax filings.

5. Penalty Relief and Representation – If an issue arises, our tax lawyers represent you under Tax Administration Act s.94.1 for penalty relief.

Mackisen Service Hub: Smart Receipt and Invoice Compliance
Our Mackisen Service Hub provides end-to-end invoicing and compliance management, including:

• Setup of compliant invoice and receipt templates.

• POS integration for automatic tax calculation.

• Ongoing documentation audits.

• Representation during CRA and Revenu Québec reviews.

Each Mackisen professional CPA, tax lawyer, or compliance advisor is trained in both federal and Quebec sales tax law, ensuring your documentation is legally flawless.

Real Client Example
A Montreal design studio faced a QST audit after Revenu Québec denied $26,000 in Input Tax Refunds due to incomplete receipts. Mackisen CPA reconstructed the invoices, validated supplier tax numbers, and reissued compliant receipts. The reassessment was overturned, and the client’s refund was restored in full.

Why Mackisen
With over 35 years of combined CPA and legal experience, Mackisen CPA Montreal ensures that every receipt and invoice you issue stands up to legal scrutiny. We don’t just make your documents look professional we make them legally unbreakable.

When you partner with Mackisen, every receipt tells the full story: accuracy, compliance, and professionalism that protects your business from CRA and Revenu Québec risk—today and for years to come.