When CRA Denies Your GST/HST Refund 2025 — Reclaim Your Cash Flow and Protect Your Business

A denied GST/HST refund can cripple a small business’s cash flow overnight. In 2025, CRA’s AI-powered refund review system automatically flags refund claims that appear “too high” or “unusual” for a company’s size or industry. The result? Legitimate refunds are held, questioned, or outright denied—often for reasons as minor as missing invoices, incomplete reconciliations, or a misunderstanding of Input Tax Credit (ITC) rules.

The CRA’s process is intimidating and time-sensitive, but the truth is simple: most denied refunds can be successfully appealed and recovered. At Mackisen CPA Auditors Montreal, we specialize in overturning CRA refund denials through strategic evidence presentation, financial reconciliation, and expert legal advocacy. We don’t just fix errors—we restore your business’s cash flow and peace of mind.

When the CRA blocks your refund, Mackisen unlocks it.

Legal and Regulatory Framework

Excise Tax Act (Canada)
Section 225(1): Allows registrants to claim Input Tax Credits (ITCs) and refunds on GST/HST paid for business use.
Section 296(1): Authorizes CRA to reassess or deny refunds during audit or pre-assessment review.
Section 297(1): Grants taxpayers 90 days to object to a denied refund.
Section 299(1): Outlines the taxpayer’s right to recover denied refunds through appeal.

Tax Administration Act (Quebec)
Provides Revenu Québec the same authority for QST refunds and input credits, requiring coordinated appeals for Quebec-based businesses.

Mackisen manages all federal and provincial correspondence, ensuring every submission is legally compliant and strategically presented.

Key Court Decisions

North Shore Power Group v. The Queen (2018): CRA must review supporting evidence objectively when denying refunds.
Bédard v. The Queen (2022): Businesses must maintain proper documentation for every claimed ITC but can challenge denials with additional evidence.
Silverline Group v. Canada (2020): CRA cannot deny refunds without sufficient proof of ineligibility—burden of proof must be reasonable.

These cases confirm that CRA refund denials are not final—they’re negotiable when defended correctly.

Why CRA Denies Refunds — and How It Impacts You

Refund denials often stem from technical oversights rather than tax evasion. CRA algorithms are designed to flag risk, not fairness. Common 2025 denial reasons include:

• Unverified or missing supplier invoices.

• Late or incorrect GST/HST filings.

• Claiming ITCs for personal or ineligible expenses.

• Supplier not registered for GST/HST.

• Differences between GST/HST filings and corporate income reports.

Denied refunds tie up operating cash, delay payroll, and restrict business growth—especially for startups and cash-sensitive industries.

Mackisen’s Refund Recovery and Audit Defense Strategy

1. Denial Review: Analyze CRA’s assessment letter, identifying each reason for disallowance.

2. Documentation Rebuild: Locate, validate, and reconcile all invoices, receipts, and supplier details.

3. Compliance Verification: Ensure supplier GST/HST registration and correct tax classification.

4. Formal Objection Filing: Submit a complete Notice of Objection within 90 days to pause enforcement.

5. Appeal & Negotiation: Work directly with CRA Appeals Officers to reinstate valid refunds or escalate to the Tax Court of Canada if required.

Our strategy focuses on precision, documentation, and aggressive representation to ensure CRA has no basis to withhold your funds.

Real Client Experience

A Montreal manufacturing firm was denied a $165,000 GST/HST refund due to incomplete supplier records. Mackisen reconstructed the documentation, filed an objection, and secured full reinstatement within eight weeks.
A tech startup’s $42,000 refund was denied after CRA flagged inconsistent filings. Mackisen aligned GST and income tax records, proved eligibility, and achieved a 100% reversal.

Common Questions

Can CRA deny my refund without notice? Yes, but you have full legal rights to appeal or file an objection within 90 days. Mackisen manages this entire process.
What happens if I miss the deadline? Relief or extensions may still be available—we act immediately to preserve your right to recover funds.
Can I still operate during a refund dispute? Yes, but CRA may offset refunds against other tax balances. Mackisen negotiates to keep your business liquid.
What if my supplier wasn’t registered for GST/HST? CRA may still accept your claim if good faith and proper documentation are proven.

Why Mackisen

At Mackisen CPA Auditors Montreal, we turn refund denials into recoveries. Our team of CPA auditors and tax lawyers combines financial precision with legal expertise to challenge CRA’s assumptions, rebuild your documentation, and win back your refund.

We act fast, we act professionally, and we act for you—because your cash flow is your lifeline, and protecting it is our priority.

Call Mackisen CPA Auditors Montreal today for your 2025 GST/HST Refund Recovery Consultation. The first meeting is free, and your refund starts working for you again.