ARTICLE · 20 AUGUST 2026

CRA Uses ‘Alternative Methods’ For GST/HST Audits, Including Estimating Business Revenue, Reconstructing Missing Receipts

Rotfleisch & Samulovitch P.C.

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When the Canada Revenue Agency (CRA) concludes that a GST/HST registrant’s books and records do not provide a complete or reliable picture of its taxable sales, it may reconstruct those sales using an alternative or indirect audit method.

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David Rotfleisch

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Overview: When Can the CRA Reconstruct GST/HST Sales?

When the Canada Revenue Agency (CRA) concludes that a GST/HST registrant’s books and records do not provide a complete or reliable picture of its taxable sales, it may reconstruct those sales using an alternative or indirect audit method . These methods may rely on purchase-to-sales ratios, inventory or packaging quantities, point-of-sale data, cash-sales patterns, bank deposits, or other indicators of business activity. The existence of accounting records does not necessarily prevent the CRA from using an alternative method. The records must also be sufficiently complete and reliable to allow the CRA to verify the registrant’s GST/HST obligations.

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