WHY DID I RECEIVE A GST/HST NOTICE FROM THE CRA?

Receiving a letter or notice from the Canada Revenue Agency (CRA) about GST/HST can be stressful — especially if you don’t know why it was issued. These notices range from simple reminders to formal assessments or audit requests. Whether you operate in Quebec, Ontario, or elsewhere in Canada, CRA monitors GST/HST compliance closely and sends notices whenever something in your tax account requires clarification or correction. This guide explains the most common reasons businesses receive GST/HST notices and what to do next.

Understanding the purpose of the notice helps prevent unnecessary penalties and ensures quick resolution.

LEGAL AND REGULATORY FRAMEWORK

GST/HST notices are issued under the authority of the Excise Tax Act, which governs:

• GST (5%) across Canada
• HST (13–15%) in participating provinces
• registration requirements
• reporting periods
• audits and assessments
• corrections and adjustments

CRA sends notices when it detects discrepancies or when a business fails to meet its GST/HST obligations.

KEY COURT DECISIONS

Courts consistently affirm that:

• taxpayers are responsible for reading and acting on CRA notices
• failure to respond can lead to full assessments
• interest and penalties apply even if the taxpayer did not receive or understand the notice
• CRA may issue estimated assessments when businesses fail to file
• taxpayers must maintain documentation to support GST/HST filings

These decisions reinforce that ignoring a GST/HST notice is not an option.

WHY DID YOU RECEIVE A GST/HST NOTICE FROM THE CRA?

Here are the most common reasons.

1. Missing GST/HST Return

If CRA does not receive your return by the deadline, it automatically issues:

• a reminder notice
• a late-filing warning
• or an estimated assessment

Even nil returns must be filed.

2. Discrepancy Between Filings and CRA Records

CRA compares your GST/HST returns with:

• your income tax filings
• T4A/contractor slips
• payroll information
• bank deposits
• POS reports (in some cases)

If totals do not align, CRA sends a notice for clarification.

3. Under-Remitted GST/HST

If the CRA believes you collected GST/HST but did not remit the full amount, it will issue a notice requesting payment or explanation.

4. Overclaimed ITCs (Input Tax Credits)

If your ITC claims appear high or unusual, CRA may:

• request documentation
• reduce the refund
• reassess the filing

This is common for startups, contractors, and IT service providers.

5. Incorrect Tax Rate Applied

If you charged GST instead of HST (or vice versa) to customers in certain provinces, CRA may question your filings.

6. Registration Issues

You may receive a notice if:

• CRA believes you should be registered but are not
• your registration is incomplete
• you registered late
• you exceeded the $30,000 threshold

7. Refund Review

If you filed a GST/HST return with a refund:

• CRA may hold the refund
• request supporting documents
• verify ITCs
• send a notice asking for invoices, receipts, or contracts

8. Audit Selection

Not all notices mean an audit but some notices inform you that:

• you have been selected for a GST/HST audit
• CRA requires documentation for a specific period
• CRA will conduct a desk audit or field audit

Audit notices must be responded to immediately.

9. Incorrect Filing Period

If you filed a return for the wrong period, CRA issues a notice. This often happens with:

• newly registered businesses
• annual filers
• seasonal businesses
• businesses behind on bookkeeping

10. Voluntary Disclosure Processing

If you submitted a voluntary disclosure to correct GST/HST mistakes, CRA issues notices confirming:

• acceptance
• rejection
• conditions
• assessments

11. GST/HST Installment or Payment Issues

A notice is issued when:

• a payment was not received
• a payment was NSF
• a payment was misapplied to the wrong period

WHAT TO DO AFTER RECEIVING A CRA GST/HST NOTICE

Step 1 — Read the notice carefully

Identify:

• type of notice
• tax period involved
• what CRA is asking for
• any amounts owing
• response deadlines

Step 2 — Do not ignore it

Deadlines are strict. Failing to respond leads to assessments or collections.

Step 3 — Gather supporting documents

CRA may request:

• invoices
• receipts
• contracts
• bank statements
• POS reports
• GST/HST worksheets

Step 4 — Correct any filing errors

If CRA is right about the discrepancy, correct the error through:

• adjustments
• amended returns
• voluntary disclosure

Step 5 — Pay or arrange payment

If the notice shows an amount owing, pay immediately to stop interest.

Step 6 — Contact CRA or your CPA

If unclear, get clarification or allow your CPA to respond on your behalf.

MACKISEN STRATEGY

Mackisen CPA helps businesses understand and resolve CRA GST/HST notices. We:

• review the notice
• identify the reason
• gather documentation
• prepare responses
• correct past filings
• negotiate with CRA
• prevent future notices through system improvements

Our proactive approach protects your business from penalties and provides peace of mind.

REAL CLIENT EXPERIENCE

A consultant received a GST notice after exceeding the $30,000 threshold. Mackisen corrected compliance and filed back returns.

A retail business under-remitted HST to Ontario customers. Mackisen recalculated tax and resolved the assessment.

A tech startup had a refund held due to ITC review. Mackisen assembled documentation and secured approval.

COMMON QUESTIONS

Is a CRA GST/HST notice the same as an audit?
Not always. Many notices are minor, but some require full documentation.

What if I disagree with the notice?
You can dispute it. A CPA can help prepare a formal request.

Does the CRA notify Revenue Québec?
For Quebec-based businesses, yes — tax authorities share data.

Will my refund be delayed?
If CRA is reviewing ITCs, expect a delay.

WHY MACKISEN

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps businesses respond to CRA GST/HST notices quickly and confidently. Our structured process prevents escalations, protects refunds, and ensures full compliance.