Hi,
I have a client he purchased Freight trucks for $82,000 + 10660(HST) on their corporation name. He paid $20,000 down payment and rest was financed. I am currently doing their GST/HST return. I am doubtful if my client can claim whole HST $10660 as Input tax credit. He is using freight truck to deliver products within Canada and is using 100% for business purpose. Client is from Ontario province.
Help would be appreciated.
Thanks
The claim for HST is based on the invoice date.
They will almost surely call you for backup. Make sure you have the invoice so you can submit it to them…
So why wouldn’t he be able to claim the ITC on the truck? As long as the company is the user of the truck in the company’s trucking business, there shouldn’t be a problem.
Claiming HST is independent of payment arrangements. Leading is different. HST is claimed on each payment. In your case, your client will claim 100% of the HST on his next report. Client will likely call you when they receive the questions from CRA. So, you may as well get a scanned copy of the invoice now.
Make sure it is financed, not leased. If it is leased, the HST will be added on each lease payment. But you would still have to claim HST on up front payment.
Along the same lines of other comments make sure the name on the invoice for the truck matches the name of the HST registrant.
In many of these cases the purchaser will make their down payment equal to the HST on the vehicle or piece of heavy equipment (in Ontario - 13% of the purchase price), then get that same amount refunded on their next HST return. Essentially they have put nothing down on the truck. 