Controversy over GST/HST Tax Exemption during Holidays: Gathering at Wanjin Women's Restaurant Still Charged, CRA to Investigate
The Ontario Restaurant Hotel and Motel Association has warned that restaurants that do not comply with holiday tax breaks may be investigated by the Canada Revenue Agency (CRA).
Last Saturday, when Unionville resident Vicky Hui celebrated her birthday with friends, she was surprised to find that they were required to pay taxes while dining at a restaurant, which was the beginning of the GST and HST holidays.
Their approach surprised me, and the waiter said it was the first time she had heard of this policy, "Vicky Hui told CTV News Toronto.
The total amount on Hui's restaurant bill is $349.95 CAD, including $40.20 CAD for Coordinated Sales Tax (HST). However, according to the new policy, restaurants should not charge this tax.
My complaint was not handled professionally. The waiter was not familiar with the policy, but the manager quickly came to a conclusion and directly asked us to pay the bill, "Hui said.
CTV News did not disclose the name of the restaurant involved, as the restaurant has issued a full refund to HST and provided an apology and a gift card worth CAD 75 to Hui and her friends.
Holiday tax reduction policy
According to the policy, from the holiday period until February 15th next year, Canadian consumers are exempt from taxes when purchasing certain pre made foods, restaurant meals, some snacks, and specific alcoholic beverages.
This is a good idea, but it is confusing and frustrating for many hotel industry organizations, "said Tony Elenis, President and CEO of the Ontario Hotel and Motel Association.
Elenis pointed out that any restaurant that continues to collect taxes in the next two months may face non-compliance investigations by CRA.
If a company does not comply with policies and charges GST or HST, once discovered, they may be subject to CRA investigation for non-compliance, "Elenis said.
Clarification from CRA
A spokesperson for Restaurants Canada confirmed that the C-78 Act has received royal approval, and the CRA requires businesses not to charge GST or HST on eligible goods and services.
The CRA statement states: "During the holiday period, if a product has completed a transaction at the time of transportation to the retailer but has not been paid or invoiced during the holiday, it will not be eligible for zero tax rate." In this case, consumers or retailers who have been wrongly taxed can apply for a tax refund through the GST 189 form.
CRA emphasizes that their enforcement focus will be on "intentional and serious" violations of policies, and will not be on companies that strive to comply with temporary legislation.
The restaurant association suggests that restaurants actively participate in this tax holiday policy to avoid potential compliance risks.
Hui is satisfied with the outcome of her case, but she would like to remind other consumers that the restaurant should not charge taxes in the next two months.
They ultimately tried their best to do better and provided a compensation plan, "Hui said.
There are also complaints that some food delivery services still charge taxes on food orders. However, UberEats stated that although consumers will not be charged taxes on food and restaurant orders, delivery and service fees still need to be taxed.
Source: CTV News Toronto