Whether or not a supply is a financial service is a significant
issue for suppliers because suppliers of financial services are
unable to claim ITCs for the GST/HST they pay on their inputs.
Accordingly, financial service providers scrutinize their own
suppliers carefully to ensure they are only paying GST/HST where
appropriate.
In the recent case of The Great-West Life Assurance Company
v. The Queen (2015 TCC 225), Great-West was seeking a rebate
for tax paid in error to one of its suppliers whom Great-West
claimed was actually providing financial services. Interestingly
the supplier testified against Great-West in a case which revisits
how the exemptions to the definition of financial services apply.
Great West has filed an appeal to the Federal Court of Appeal.
