As we have previously written about here, the CRA has been modernizing its electronic services.  As part of these changes, the CRA has updated the GST/HST e-filing returns to require additional lines of detail.  Businesses e-filing their GST/HST returns need to understand this new change and complete their GST/HST e-filing returns properly!

As of May 13, 2024, registrants e-filing their GST/HST returns have been encountering the new forms, and the CRA reminded registrants of the change in its Excise GST/HST News – No. 117. 

Those who previously filed paper returns will immediately recognize these additional details as lines from the paper returns which have now been migrated over to the e-filing system.

The Changes

The CRA announced that the changes impact two forms, namely:

-     GST34, Goods and Services Tax/Harmonized Sales Tax (GST/HST) Return

-     RC7200, Goods and Services Tax/Harmonized Sales Tax (GST/HST) and Quebec Sales Tax (QST) Return for Selected Listed Financial Institutions

In both forms, four new lines have been added, and two previously fillable lines (105 and 108) are now calculated, as follows: 

-     Line 103 – GST/HST collected or collectible

-     Line 104 – Adjustments to be added to the net tax

-     Line 105 – Sum of 103 and 104.

-     Line 106 – GST/HST paid or payable (ITCs)

-     Line 107 – Adjustments to be deducted when determining the net tax

-     Line 108 – Sum of 106 and 107.

Additionally, form RC7200, which is used for QST reporting for Selected Listed Financial Institutions (“SLFIs”), has been updated to include parallel adjustment fields with respect to the QST and Input Tax Refunds (ITRs). 

Why do I care?

Businesses filing their GST/HST and QST returns electronically must now take care to report their adjustments to net tax on the new lines, rather than reporting those adjustments “lumped together” with the underlying GST/HST and ITCs in lines 105 and 108. 

This change ensures that adjustments to be added to, and deducted from net tax, are reported separately, which should improve CRA’s ability to monitor compliance and establish audit priorities.

Bad debts are one example of how the new details will impact GST/HST reporting.  When an amount becomes a bad debt, a portion of the GST/HST may be claimed as an adjustment reported on Line 107 as a deduction from net tax.  Similarly, where a registrant receives payment for an amount of GST/HST previously written-off as a bad debt, a portion of that payment must be claimed as an adjustment reported on Line 104 as an addition to net tax. 

Takeaways

With nearly all registrants now being required to e-file their GST/HST returns, registrants should understand the additional lines of detail CRA has added and complete them where applicable.  When in doubt, contact your tax advisors!

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