Rebate for Taxes Remitted in Error by a Supplier
A supplier that has remitted an amount as or on account of GST/HST or QST can apply for a rebate in certain situations, for example, where
- the supplier did not collect GST/HST or QST from a recipient on an exempt or zero-rated supply but erroneously remitted an amount as tax on that supply; or
- the supplier collected an amount of GST/HST or QST from a recipient but erroneously remitted a higher amount of tax than was collected.
The supplier must apply for the rebate within two years following the date on which the amount was remitted in error. To apply, the supplier must file a General GST/HST Rebate Application (form FP-189-V) or a General Application for a Québec Sales Tax (QST) Rebate (form VD-403-V), as applicable.
Taxes billed or collected in error
The rebate for taxes remitted in error does not apply to a supplier that has erroneously charged or collected GST/HST or QST. In such a case, the supplier is required to include the excess amount of tax in calculating the net tax for the reporting period in which the tax was charged or collected.
The supplier may, however, refund, adjust or credit the excess amount of tax that was charged to or collected from the recipient within two years following the date the tax was charged or collected. The supplier may then deduct the excess amount refunded or credited in calculating the net tax for the reporting period in which a credit or debit note was issued, provided the amount was included in calculating the supplier's net tax for the same reporting period or a preceding reporting period.