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GST — waiver of interest

My client, a customs broker, paid GST on behalf of a customer who was importing goods. Its customer went bankrupt without reimbursing it for the GST. My client was incorrectly advised by Revenue Canada to claim an input tax credit for this amount. It did so, and some time later Revenue Canada assessed my client to recover the input tax credit, plus interest and penalty. By the time my client got to Tax Court (on its own — it lost), the interest and penalty had ballooned to a huge figure. The client succeeded in having the penalty waived, but not the interest. At this point I took over the file.

I wrote a 12-page letter appealing the decision not to waive the penalty, showing that the client had relied on Revenue Canada to its detriment, and documenting in detail why, under Revenue Canada's published administrative policies, the interest should be waived.

Revenue Canada agreed and waived almost $20,000 in interest.

(1996)