TEI comments on interest imposed on GST: December 20, 2002.

On December 20, 2002, TEI President J.A. (Drew) Glennie sent the following letter to Ed Gauthier, Deputy Assistant Commissioner, Canada Customs and Revenue Agency, concerning the interest assessed when addition Goods and Services Tax is due upon importation of goods. The letter follows up on an issue raised during TEI's liaison meeting with CCRA on December 3, 2002, and was prepared under the aegis of TEI's Canadian Commodity Tax Committee, whose chair is Martina Krummen of Air Canada.

During TEI's December 3, 2002, liaison meeting with CCRA, a question arose concerning the imposition of interest on the Goods and Services Tax when goods are imported into Canada, and the importer subsequently realizes that additional GST is payable. The issue was discussed in the two previous liaison meetings and, at CCRA's suggestion, TEI sent a letter to the Director of the Trade Incentive Programs Division recommending a solution. (A copy of TEI's February 14, 2001, letter to Candace Breakwell is attached.) [Ed. Note: The letter is reprinted in the March-April 2001 issue of The Tax Executive.]

The issue arises in the context of a voluntary disclosure of tax liability by a taxpayer. TEI believes that when a taxpayer has voluntarily disclosed an additional GST liability due upon importation of goods, the interest on that GST should be waived. This position is consistent with CCRA's internal policy that recommends administrative tolerance when items are voluntarily disclosed and with the goals outlined in the Fairness...