GST Review & Input Tax Credit Recovery

GST returns were being prepared from summary sales and purchase totals pulled off a spreadsheet. Input tax credits were claimed on an estimate of what looked reasonable rather than on actual eligible purchases, and nobody could tie a filed return back to source documents.

With imports, freight and a mix of taxable and zero-rated sales, the owner suspected the company was both missing credits and exposed on the ones it had claimed.

What the Client Needed

A line-by-line review of two years of filings, corrections filed where the numbers were wrong in either direction, and a repeatable quarterly process that produced returns from the accounting records instead of from a separate spreadsheet.

What We Did

Every purchase over the two-year period was reviewed against the supporting invoice for GST eligibility. Unclaimed credits were identified on equipment purchases, professional fees and imported goods where the GST had been paid at the border. At the same time we removed claims that would not survive review — meals and entertainment restricted to fifty percent, personal-use items and purchases from unregistered suppliers.

Adjustment returns were filed for the affected periods with a schedule supporting each change, and the bookkeeping file was reconfigured so that sales tax is tracked as transactions are entered.