Received a CRA Notice of Assessment for GST? How to Respond the Right Way

A GST Notice of Assessment from the Canada Revenue Agency (CRA) can feel alarming especially if the assessed amount is higher than expected, if your input tax credits (ITCs) were denied, or if CRA claims you owe GST for past periods. But with the right approach, most assessments can be corrected, reduced, or fully reversed.

This guide explains exactly what to do when you receive a GST Notice of Assessment, how to protect your rights, and how a CPA can help you resolve the issue efficiently.

Step 1 — Read the Notice Carefully

The notice will tell you:
• which tax period is affected
• what CRA changed in your filing
• whether ITCs were denied (and why)
• how much tax, penalty, and interest CRA believes you owe
• the deadline to dispute the assessment

Understanding the reason behind the assessment is the first step to resolving it.

Step 2 — Compare the Assessment with Your Records

Before responding, compare CRA’s figures with:
• your GST return
• your bookkeeping
• invoices and receipts
• bank deposits
• sales summaries
• ITC schedules

Look for discrepancies like:
• missing documentation
• incorrect GST coding
• sales not recorded properly
• expenses claimed incorrectly
• CRA calculation errors

It’s more common than you think for assessments to include mistakes.

Step 3 — Determine the Reason for the Assessment

Typical reasons include:
• denied ITCs due to missing or invalid invoices
• CRA believes you underreported sales
• deposits exceeded reported revenue
• GST was charged but not remitted
• bookkeeping errors or missing entries
• incorrect tax rates applied
• claiming ITCs for non-business expenses

Knowing the root cause guides the response strategy.

Step 4 — Gather Documentation Immediately

You will need:
• invoices with supplier GST numbers
• proof of payment
• contracts
• bookkeeping entries
• reconciliations of deposits vs. revenue
• adjusted filings (if needed)

Supporting documents are essential to challenge an assessment.

Step 5 — Contact a CPA Before Contacting CRA

Never call CRA without preparation.
A CPA will:
• interpret the assessment
• identify CRA errors
• prepare a complete response package
• communicate on your behalf
• prevent misstatements that weaken your case

This dramatically increases your chances of success.

Step 6 — File an Adjustment or a Notice of Objection (If Necessary)

Depending on the situation, your CPA may recommend:

1. A GST Adjustment (Reassessment Request)

Used when:
• the issue is minor
• documentation fixes the discrepancy
• CRA is likely to accept corrections informally

2. A Formal Notice of Objection

Required when:
• CRA refuses to change the assessment
• the amounts are large
• legal interpretation is involved

Deadlines are strict usually 90 days from the date of assessment.

Step 7 — Prepare for Additional Questions

CRA may request:
• more invoices
• bank statements
• detailed explanations
• proof that services were zero-rated or exempt

Your CPA handles these communications to ensure accuracy and consistency.

What NOT to Do

• Don’t ignore the assessment
• Don’t pay immediately without reviewing accuracy
• Don’t contact CRA alone
• Don’t destroy or alter documents
• Don’t assume CRA is always correct

Most assessments change significantly after professional review.

Key Lessons

• CRA assessments are not final they can be challenged
• Many assessments contain errors
• ITCs are frequently denied due to missing or incomplete documentation
• A CPA-led response prevents escalation and protects your rights
• Deadlines matter responds quickly

Real Client Stories

A consultant received a $14,000 assessment for denied ITCs. Mackisen rebuilt documentation and reversed the entire amount.

A retailer was assessed for underreported GST due to POS rounding errors. Mackisen recalculated and reduced the assessment by 80%.

A contractor faced a penalty for alleged negligence. Mackisen proved the expenses were legitimate and had the penalty removed.

Common Questions

Do I have to pay immediately?
No you can dispute without paying, depending on circumstances.

Is CRA always, right?
No auditors and assessors frequently make mistakes.

Can I recover denied ITCs?
Yes if documentation is corrected and resubmitted.

Will CRA audit me after I dispute?
Not necessarily many disputes end without escalation.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps businesses challenge CRA assessments, correct filings, rebuild documentation, and defend their GST/HST filings with confidence.