Generally, no — subsection 296(2) of the Excise Tax Act is not a general tool for reviving an expired input tax credit (ITC) claim. It is narrower and more specific: where the Minister is actively reassessing net tax for a particular GST/HST reporting period, and a valid, previously unclaimed ITC relates to that period, subsection 296(2) can require the Minister to take it into account — even if the ordinary four-year claim period has otherwise passed. That was confirmed in Ontario Tire Stewardship v. The King, 2026 TCC 77. The relief only applies inside an active reassessment, and the Tax Court’s remedy is limited to redetermining net tax — it cannot order a refund.
The Background
Ontario Tire Stewardship (“OTS”) ran Ontario’s used-tire waste diversion program from 2009 to 2018. Uncertain whether it was carrying on a “commercial activity” and so entitled to ITCs at all, OTS held off claiming credits for years, then filed a catch-up claim in its December 2013 period once related litigation turned in its favour. CRA denied it outright. Once a related organization won its own appeal on the commercial-activity question, CRA accepted OTS’s original claim — but while preparing for the resulting verification audit, OTS discovered it had also missed a further $1,057,793.22 in ITCs from its July–December 2012 periods. CRA denied that additional amount as statute-barred.
The Legal Question — And Its Limits
The dispute turned on wording. The Excise Tax Act’s four-year carry-forward window lets a registrant claim an ITC in a later period than the one it arose in (paragraph 225(4)(b)), and everyone agreed these particular credits were otherwise valid. The Crown argued subsection 296(2) only reaches ITCs that arose in the exact period under reassessment, pointing to the “net tax” formula in subsection 225(1), which expressly covers ITCs “for the particular reporting period or a preceding reporting period,” while paragraph 296(2)(a) uses only “the particular reporting period.” Justice Visser rejected that narrow reading, applying the settled GST/HST principle that the tax is not meant to cascade through the supply chain. The Court held that subsection 296(2) extends to ITCs a registrant intended to claim, by carry-forward, in the period under reassessment — not only to ones that technically arose within it.
That result comes with real limits. The relief only operates because the relevant period was already under active reassessment; it is not a freestanding mechanism for reopening closed years generally. OTS separately argued that an “Abeyance Agreement” with CRA had extended its limitation periods — the Court rejected that too, holding that pausing an objection is not a waiver of the ETA’s statutory limitation periods, which require the formal waiver mechanism in subsection 298(7). And critically, the Tax Court’s remedy stopped at referring the matter back to the Minister for reconsideration; the Court was explicit that it has no jurisdiction to order payment of a refund, which would fall to the Federal Court if it were ever contested.
Practical Implications
For any GST/HST registrant under audit or objection, the practical lesson is to review the full reporting period CRA is reassessing for credits that were missed — not just the specific issue CRA raised. But that review only helps within an active reassessment; it does not reopen a closed period on its own, and even a successful outcome produces a redetermined assessment, not a refund cheque, which involves separate mechanics entirely.
Businesses should also review their regular GST/HST filing and reporting procedures to reduce the risk that valid ITCs are overlooked before the ordinary claim period expires.
FAQ
Can I claim a GST/HST input tax credit I missed years ago?
Generally only within the four-year window in paragraph 225(4)(b) — unless the period in question is currently under reassessment by the Minister, in which case subsection 296(2) may require the credit to be recognized, as confirmed in this case.
Does this mean CRA must recalculate my net tax whenever I find an old missed credit?
No. Subsection 296(2) only operates where the Minister is actively assessing net tax for that specific period — it does not reopen closed periods generally.
Can the Tax Court order CRA to pay me a refund for missed ITCs?
No. Its jurisdiction is limited to determining the correctness of an assessment and referring it back to the Minister; refund and collections matters generally fall to the Federal Court.
Does pausing a CRA objection extend my limitation periods?
Not automatically. An “abeyance agreement” pausing the administrative review process is not the same as the formal waiver under subsection 298(7), and does not extend ITC limitation periods on its own.
What should I do if I discover missed ITCs during a GST/HST audit?
Raise them with your advisor and, where the relevant period is under active reassessment, with CRA directly — documentation showing the credits are valid and tied to that period will matter.
Is this decision limited to organizations like Ontario Tire Stewardship?
No. The underlying legal question — how subsection 296(2) interacts with ITC carry-forwards — is of general application to GST/HST registrants, though the facts here involved a specific commercial-activity dispute.
Practical Takeaways
- Subsection 296(2) can require the Minister to recognize a valid, previously unclaimed ITC from an earlier period — but only while the period it relates to is under active reassessment, not as a general way to revive an expired claim.
- Pausing a CRA objection is not a waiver of statutory limitation periods; only the formal subsection 298(7) waiver mechanism extends them.
- The Tax Court can redetermine net tax but cannot order a refund — that is a separate remedy outside its jurisdiction, and the case itself was referred back to the Minister rather than resolved by direct payment.
Dealing with a GST/HST audit or objection?
Missed ITCs should be reviewed as part of the entire reporting period under reassessment, not in isolation. Lepore & Company assists businesses with GST/HST reviews, audits, objections, and disputed input tax credit claims.
This article discusses a single Tax Court of Canada decision and is provided for general informational purposes only. It does not constitute legal, tax, or accounting advice. Subsection 296(2) relief depends on specific statutory conditions and the procedural posture of your file. Please contact Lepore & Company or a qualified professional to discuss your specific circumstances.