GST/HST post-assessment review: what CRA wants and how to answer it
A letter asking you to support the input tax credits you claimed is a desk review, not an audit. What decides it is whether your receipts carry the specific information the rules require.
What a post-assessment review is
You filed a GST/HST return, it was assessed, and then a letter arrived asking you to support what you claimed. That is a post-assessment review. CRA assessed the return as filed and is now checking part of it, usually the input tax credits.
It is a desk review, handled by correspondence, and it is far narrower than an audit. Nobody is coming to your premises and CRA is not asking to see your whole business. In most cases the request is for copies of invoices supporting the credits you claimed in one reporting period.
It is also common, and being selected does not imply CRA thinks you did anything wrong.
Why yours was selected
Reviews are frequently triggered by the shape of the return rather than by suspicion. A refund claim is the most common reason, because CRA checks before paying money out. A first return after registering often gets looked at. So does a return where the input tax credits are large relative to the sales reported, or where the figures jump against your own history.
Businesses with significant startup or capital purchases see this a lot, for the simple reason that claiming a lot of tax back on little revenue is exactly the pattern the system flags.
What decides the outcome: the receipt rules
This is the part most owners do not know, and it is where reviews are usually won or lost. To claim an input tax credit you need documentation carrying specific information, and what is required scales with the amount.
| Purchase amount | Your records must show |
|---|---|
| Under $30 | The supplier or intermediary name, the date, and the amount of tax paid or payable |
| $30 to $149.99 | The above, plus the supplier’s GST/HST registration number |
| $150 or more | The above, plus the purchaser’s name, a description of the supply, and the terms of payment |
The consequence is blunt. A debit card slip for a $400 purchase that shows only a total is not sufficient support, no matter how genuinely the expense was incurred and no matter what your bank statement shows. A bank statement proves you paid someone. It does not prove how much of that payment was GST or HST, and it does not carry the supplier’s registration number.
It is also worth verifying that a supplier’s registration number is valid. If a supplier charged you tax while not registered, the credit is not available to you, and CRA maintains a registry you can check.
How to respond
Answer by the date in the letter. If you need longer, ask before the deadline rather than after; extensions are commonly granted when requested in time and rarely helpful once the file has moved on.
Send what was asked for and no more. A schedule listing the claimed credits, with each one tied to a numbered invoice copy, is far easier for a reviewer to process than an unsorted folder. Reviews resolve faster when the reviewer does not have to assemble anything.
If you find a claim you cannot support, say so and quantify it. Volunteering a correction on one item generally goes better than having the reviewer find it while wondering what else is in the return.
If credits are disallowed
CRA reassesses the period, the disallowed credits become an amount owing, and interest runs from the original due date of that return rather than from the date of the reassessment. If you disagree, the route is a Notice of Objection within ninety days of the reassessment, the same window described in our guide to the Notice of Assessment.
The lasting fix is upstream. If the credits were real but the paperwork was thin, the problem is the record, not the claim. Keeping the supporting document attached to the transaction when it happens, rather than reconstructing a year later under a deadline, is the difference between a review that takes an afternoon and one that costs you credits you were entitled to.
Common questions
What is a GST/HST post-assessment review?
A correspondence review CRA conducts after assessing your GST/HST return, usually asking you to provide documents supporting the input tax credits you claimed. It is a desk review, much narrower than an audit.
Is a post-assessment review an audit?
No. It is handled by correspondence and normally covers the input tax credits in one reporting period. An audit is an examination of your books and records. A review can lead to a reassessment, but it is not an audit.
Why was my GST/HST return selected for review?
Most often because of the shape of the return rather than suspicion. Refund claims, first returns after registering, and returns where input tax credits are large relative to reported sales are all commonly reviewed.
What documents do I need to support input tax credits?
It depends on the amount. Under thirty dollars you need the supplier name, date, and tax amount. From thirty to just under one hundred and fifty dollars you also need the supplier GST/HST registration number. At one hundred and fifty dollars or more you also need the purchaser name, a description of the supply, and the terms of payment.
Is a bank statement enough to support a credit?
No. A bank statement shows that you paid someone, but not how much of the payment was GST or HST, and it does not carry the supplier registration number. You need the invoice or receipt itself.
What happens if CRA disallows my credits?
CRA reassesses the period, the disallowed credits become an amount owing, and interest runs from the original due date of that return. You can file a Notice of Objection within ninety days of the reassessment.
Sources
Want HST filed and supported properly the first time? See tax accountant, bookkeeping services, or catch-up bookkeeping.