Janice Liu

The appellant, SMP Carpentry Inc., appealed assessments for unremitted HST, disallowed input tax credits (ITCs), and penalties for two reporting periods in 2011 and 2012.

The Minister asserted the appellant provided construction services and made taxable supplies, while the appellant claimed it was merely a conduit for financing and provided no services.

The Tax Court found the appellant was engaged in commercial activity and made taxable supplies.

However, based on concessions by the Minister, the Court allowed additional ITCs of $945.89 for the 2011 period and $2,057.98 for the 2012 period, and deleted the gross negligence penalties.

The matter was referred back for reassessment.

The appellant, Amex Bank of Canada, appealed the reassessments denying input tax credits (ITCs) for GST/HST paid on expenses related to its Membership Rewards Program (MRP).

The appellant argued that the MRP expenses were incurred in the course of making taxable supplies separate from its exempt financial services.

The Tax Court of Canada dismissed the appeal, finding that the MRP elements were inextricably intertwined with the exempt supply of financial services (credit) provided to cardholders and merchants.

As the predominant element of the single composite supply was an exempt financial service, the appellant was not entitled to claim ITCs for the MRP expenses.

The Appellant holding company appealed the denial of input tax credits for legal fees incurred in respect of another corporation.

To claim the credits under subsection 186(1) of the Excise Tax Act, the Appellant had to be related to the other corporation.

The Tax Court of Canada found that the Appellant did not have de jure control and was not related to the other corporation under the Income Tax Act.

The appeals were dismissed.