Can CRA reassess me for HST/GST separately from income tax?
Yes. HST and GST are governed by the federal Excise Tax Act, which is separate legislation from the Income Tax Act. CRA administers both, but reassessments under each act are independent. An income tax reassessment and an HST/GST reassessment can arise from the same audit, but each produces a separate notice and is subject to its own deadlines, penalties, and dispute process.
The reassessment period for HST/GST is generally four years from the original assessment date for most registrants. However, if there was fraud or misrepresentation, CRA can go back further. Penalties for HST/GST include failure-to-file penalties, late remittance penalties, and, in cases of gross negligence, a penalty equal to 25% of the understated net tax (different from the income tax gross negligence rate).
If you carry on business and collect HST from customers, you must remit it to CRA even if you have not yet paid it over. HST collected but not remitted is treated very seriously. If you receive both an income tax and an HST reassessment arising from the same audit, each must be objected to separately under its own act within the relevant deadline.
Key takeaways
- HST/GST reassessments arise under the Excise Tax Act and are separate from income tax.
- The standard reassessment window is four years for most HST registrants.
- HST penalties differ from income tax penalties — review both notices carefully.
- File separate objections for income tax and HST/GST reassessments if you dispute both.