Fadali: CRA Must Apply Available Rebates to Reduce HST Late-Filing Penalty

The Tax Court held the taxpayer could not claim ITCs for construction expenses because he was not yet a registrant when they were incurred.
However, he was eligible to claim a rebate under s. 257 for the same expenses, and later did so.
The Court found that if the rebate application had been filed when CRA assessed him, the rebate would have been available then.
Under s. 296(2.1), CRA had to account for that available rebate when assessing, even before the application was actually filed.
As a result, the late-filing penalty under s. 280.1 had to be reduced.

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.