Government institutes penalties for failing to file and inaccuracies in GST schedule

Penalties will be applied to any financial institution that fails to file, or files with inaccuracies, the GST 111 schedule, said Cliff Lee, a senior manager at KPMG.
Lee spoke at the Insurance Institute of Toronto’s At the Forefront Breakfast about implications of the HST on the insurance industry.
The GST 111, ‘Schedule 1 – Financial Institution GST/HST Annual Information Schedule,’ was implemented in 2006. Financial institutions that are GST-registered with more than $1 million in annual revenue are required to file it within six months of the end of each fiscal year.
The document, eight pages in length, requires very specific and detailed information that “may not always be readily available,” Lee explained.
Historically, there were no penalties associated with the filing of the schedule. But the Department of Finance of Canada recently announced that wouldn’t be the case for fiscal year 2009, Lee told delegates.
“When there are no penalties associated with something, then there are always people who conveniently forget or say they weren’t aware of it or just that it wasn’t at the top of their priorities,” Lee said.
Penalties will be based on whether, and how accurately, a financial institution completes the form.
“So, if your numbers are off on those eight pages, [Canada Revenue Agency] will penalize you for each number that’s off — up to $1,000,” Lee said.
“If you look at the form, there are about 100 boxes on that form. Depending on how many boxes you are off, and how far off you are, it could result in a very big penalty.”
The problem is, “if no one has been tracking the [required] information, you’ll have great difficulty completing the form with any degree of accuracy.”