GST/HST Input Tax Credits: What Can You Claim?

GST/HST means goods and services tax or harmonized sales tax. A receipt showing this tax does not automatically let you claim all of it back. Input tax credits, or ITCs, let eligible registered businesses recover tax paid or owed on purchases used in commercial activities, subject to the rules.

The useful review separates three questions: does the purchase qualify, how much tax is recoverable, and do the records support the claim? Answering only the third question can produce a beautifully organized file containing ineligible amounts.

Check eligibility before adding up receipts

Confirm the claimant's registration and the business purpose of the purchase. An expense being deductible for income tax does not automatically make its GST/HST recoverable. The two systems have different rules.

Commercial activities generally include selling taxable goods or services. These include zero-rated sales, where the tax rate is zero. Exempt sales are different: purchases used for exempt activities generally do not qualify for ITCs. If your business has both kinds of activity, you may need to split the purchase costs between them rather than claim all or none.

Personal use, special expense restrictions and certain capital purchases also require attention. If an invoice includes another provincial tax, do not add it to the GST/HST claim simply because both appear under “tax.” Other tax systems, including Québec's QST, require their own treatment.

When an item is uncertain, set it aside for a clear review question. Do not enter a guessed credit merely to finish the worksheet, and do not silently discard a potentially eligible amount because one document is missing.

Build a supporting-document checklist

The details you need depend on the purchase amount and circumstances. Do not assume every receipt needs the same information. Check the rules that apply and collect enough detail for the reviewer to identify:

• The supplier and the GST/HST registration number where required.
• The invoice or receipt date and the amount paid or payable.
• The nature of the goods or services and the relevant purchaser details.
• The GST/HST amount or the information needed to determine it.
• The business purpose, commercial-use share and any restriction applied.
• The transaction's relationship to the accounting record and claim period.

A credit-card statement can help prove payment, but it may not explain what was purchased or provide the supplier's tax information. A cropped photo can have the same problem. Request a complete replacement invoice where necessary and retain the correspondence resolving the gap.

Keep source documents legible and connected to their entries. A folder of files called “receipt” is much less useful than a consistent reference that can be traced from the ledger to the supporting document.

Sort an original hypothetical receipt batch

Imagine a registered consulting business reviewing the following purchases. Tax amounts are assumed amounts shown on its records, not examples of a current universal rate. The classifications apply only under the stated assumptions and after documentation review.

Hypothetical GST/HST review by purchase type

Purchase	GST/HST shown	Assumed treatment	Illustrative ITC
Software used entirely in taxable consulting work	$38	Fully eligible under the example's facts	$38
Service with documented 75% commercial use	$24	Allocate $24 × 75%	$18
Business meal subject to the usual 50% restriction	$22	Apply assumed restriction: $22 × 50%	$11
Entirely personal purchase	$9	No commercial use	$0
Invoice with no GST/HST charged	$0	No GST/HST amount to recover	$0

The illustrative total is $38 + $18 + $11 = $67. It is not the sum of all tax printed on all receipts. The 75% allocation must be supportable; it is not a default business-use percentage.

The meal example assumes the usual limit applies and no exception changes it. Some meals, entertainment costs, long-term assets and purchases used for both business and personal purposes need a different review. Have someone check your actual purchase rather than copying a category from the table.

Resolve missing documents and duplicate claims

Give each purchase a stable reference and check whether it has already been included through an expense claim, supplier bill or corporate-card import. The same receipt appearing in two places does not create two credits.

Separate a missing document from an eligibility rejection. A missing invoice may need a supplier follow-up; an entirely personal purchase is not made eligible by obtaining a clearer receipt. Record the reason and the next action so the unresolved pile remains understandable.

Watch for supplier credit notes and refunds that affect a previous purchase. They may require an adjustment rather than leaving the original tax amount untouched. Match them to the transaction they correct.

Do not invent a registration number or infer GST/HST from a round total without adequate support. If an invoice appears inconsistent, ask the supplier or reviewer to resolve it before treating the amount as established.

Retain evidence that can actually be retrieved

Records supporting GST/HST filings generally must be kept for six years from the end of the last tax year to which they relate. This is not permission to automatically delete every six-year-old file: objections, appeals and other circumstances can require longer retention.

Keep records accessible and readable, including the explanations supporting allocations and restrictions. Test whether a reviewer can retrieve the document behind a selected entry without relying on the memory or personal inbox of the person who entered it.

Claim time limits also vary with the applicable circumstances. Do not assume an old receipt can always be added to the next return. Ask the preparer to confirm the appropriate period and limit when a claim is late or previously omitted.

Give the preparer your calculations and open questions

1. Separate reviewed eligible amounts from pending and rejected items.
2. Show the allocation or restriction calculation where one is used.
3. Link each amount to its source document and accounting reference.
4. Identify credit notes, duplicate risks and unresolved supplier questions.
5. Reconcile the reviewed totals to the accounting records before filing.

Bookwits can coordinate document requests, checklists and review assignments. It does not determine ITC eligibility or file the return. The goal is a reviewable record that lets the responsible professional confirm the claim, not a software promise that every scanned receipt produces a credit.