MONTREAL CPA FIRM NEAR YOU: HOW TO RESPOND TO A CRA GST/QST INFORMATION REQUEST

Understanding CRA & Revenu Québec GST/QST Reviews

CRA and Revenu Québec frequently issue GST/HST and QST information requests to verify that businesses are collecting, remitting, and claiming credits correctly. These reviews can involve input tax credits (ITCs), input tax refunds (ITRs), taxable supplies, exempt sales, or filing discrepancies. Montreal CPAs help clients interpret these requests and prepare accurate, audit-ready responses.

Why GST/QST Returns Are Reviewed

Indirect tax filings are reviewed when:

• Claimed ITCs/ITRs appear unusually high

• Sales or purchases do not align with industry norms

• There are frequent refund claims

• Filing patterns change significantly

• Third-party data does not match reported amounts
  Montreal CPAs identify what triggered the review to guide the best response strategy.

Identifying the Items Under Review

GST/QST information requests specify which accounts or transactions require proof. Montreal CPAs help clients understand whether CRA or ARQ is asking for:

• ITC/ITR documentation

• Sales invoices

• Purchase invoices

• Proof of taxable vs. exempt revenue

• Contract agreements

• Reconciliation schedules
  This clarity ensures a targeted and complete response.

Gathering Required Supporting Documentation

Adequate proof for GST/QST claims requires detailed documentation. Montreal CPAs assist clients in assembling:

• Supplier invoices showing GST/QST numbers

• Receipts and vouchers

• Bank statements

• Sales contracts

• Export documentation

• Accounting system reports
  Proper documentation strengthens the legitimacy of claims.

Ensuring Documents Meet GST/QST Requirements

Not all invoices qualify for ITCs/ITRs. Montreal CPAs verify that documents include:

• Supplier’s legal name

• Business number and GST/QST registration number

• Invoice date

• Description of goods/services

• Tax amounts separately identified

• Proof of payment
  Only valid documentation should be submitted to avoid disallowance.

Preparing Clear Explanations for CRA/ARQ

CRA and ARQ expect logical, concise explanations. Montreal CPAs prepare letters that:

• Address every requested item

• Explain unusual transactions

• Provide clear business context

• Include reconciliations when amounts differ
  Professional explanations reassure auditors of the integrity of the claims.

Handling ITC/ITR Verification Reviews

Montreal CPAs help clients support ITCs and ITRs by:

• Matching each claim to an invoice

• Segregating personal vs. business expenses

• Excluding non-eligible items such as club fees, personal meals, or capital purchases without proper documentation

• Recalculating totals to ensure accuracy
  This avoids denials and costly reassessments.

Managing Sales Taxable vs. Exempt Revenue Issues

Some industries provide both taxable and exempt services. Montreal CPAs ensure:

• Proper categorization of revenue

• Correct application of GST/QST on taxable sales

• Correct zero-rating or exemption on eligible transactions
  Mistakes in this area often lead to penalties if not corrected immediately.

Responding to Refund Verification Requests

Large or frequent refund claims automatically trigger reviews. Montreal CPAs help clients:

• Prepare purchase summaries

• Validate export documentation

• Confirm GST/QST is correctly charged

• Provide reconciliation of refund amounts
  Strong evidence increases the likelihood of quick approval.

Avoiding Common Errors in GST/QST Reviews

Common mistakes include:

• Submitting incomplete invoices

• Claiming GST/QST on ineligible expenses

• Including personal expenses

• Missing documentation

• Failing to reconcile GST/QST paid versus collected
  Montreal CPAs help clients avoid these errors and maintain compliance.

Submitting Responses Within Deadlines

GST/QST reviews often come with short deadlines. Montreal CPAs ensure:

• Responses are timely

• Documentation is complete

• Explanations are structured and professional
  Timely submissions prevent reassessments and minimize business disruption.

What Happens if CRA or ARQ Disallows a Claim

If a claim is rejected, CRA or ARQ may:

• Reduce ITCs/ITRs

• Adjust GST/QST payable

• Charge penalties and daily compound interest
  Montreal CPAs help challenge incorrect decisions or prepare corrected filings.

Filing a Notice of Objection or Reconsideration

If amounts are incorrectly disallowed, Montreal CPAs prepare objections supported by:

• Statutory references (Excise Tax Act, QST Act)

• Detailed reconciliations

• Corrected classifications

• Evidence demonstrating eligibility
  Strong objections improve the likelihood of reversal.

Preventing Future GST/QST Issues

Montreal CPAs implement preventive systems such as:

• Better categorization in accounting software

• Maintaining proper invoice standards

• Separation of personal and business expenses

• Monthly reconciliation of GST/QST accounts
  Proactive maintenance reduces the risk of future reviews.

Leveraging Digital Tools to Organize GST/QST Documentation

Technology enhances compliance. Montreal CPAs help clients use:

• Cloud bookkeeping platforms

• Receipt-capture apps

• Automated GST/QST reconciliation reports

• CRA and ARQ online portals
  Digital accuracy supports faster review responses.

Maintaining Compliance Throughout the Process

Businesses must continue filing GST/QST returns while under review. Montreal CPAs ensure clients remain compliant with:

• GST/HST obligations

• QST obligations

• Instalments or remittances
  Maintaining good standing prevents additional enforcement actions.

Why Choose Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps businesses stay compliant while recovering the taxes they’re entitled to. Whether you’re filing your first GST/QST return or optimizing multi-year refunds, our expert team ensures precision, transparency, and protection from audit risk.